The gold mining industry is experiencing challenges in sustaining production growth as deposits of the precious metal become harder to find, according to the World Gold Council. While there was a record first-quarter mine production in 2024, with a 4% year-on-year increase, overall mine production has plateaued since around 2016-2018, with minimal growth. Data from the international trade association shows that mine production grew only 0.5% in 2023 compared to the previous year, following growth rates of 1.35%, 2.7%, and a 1% decline in 2020. The rapid growth seen after 2008 has come to a halt, signaling the industry’s struggle to report sustained production growth.
The exploration process for large-scale gold mining is capital-intensive and time-consuming, taking an average of 10 to 20 years before a mine is ready for production. However, the likelihood of a discovery progressing into mine development is low, with only about 10% of global gold discoveries containing sufficient metal to warrant mining. The total amount of gold mined to date is around 187,000 metric tons, with the majority coming from countries like China, South Africa, and Australia. Estimates suggest that there are around 57,000 tonnes of gold reserves that can still be excavated, according to the United States Geological Survey.
In addition to the challenges of finding new gold deposits, securing government permits for mining operations has become increasingly difficult and time-consuming. The process of obtaining licenses and permits necessary before mining companies can begin operations can take several years, adding to the obstacles faced by the industry. Many mining projects are also located in remote areas that lack necessary infrastructure like roads, power, and water, leading to additional costs for building and financing these mines. These challenges have made it harder for companies to find, permit, finance, and operate gold mining projects.
Gold prices have reached record highs in recent months fueled by strong demand, particularly from China. Despite this, the current spot gold price is at $2,294.3 per ounce, indicating a slight breather after the recent rally. The high demand for gold, coupled with the challenges in finding, permitting, financing, and operating gold mines, highlights the complexities faced by the industry. As deposits become scarcer and production growth stalls, the future of the gold mining industry remains uncertain. Efforts to overcome these challenges, including innovative exploration techniques and streamlined permitting processes, will be crucial for the industry’s sustainability and growth in the future.
Overall, the gold mining industry is facing difficulties in sustaining production growth as deposits become harder to find. Despite record first-quarter mine production in 2024, overall growth has plateaued since 2016-2018. Large-scale gold mining is a capital-intensive and time-consuming process, taking 10 to 20 years before a mine is ready for production, with a low likelihood of discoveries progressing into mine development. Securing government permits has become more challenging, with mining projects in remote areas requiring infrastructure and added costs. Gold prices have reached record highs, driven by strong demand, but are currently taking a breather. Efforts to innovate exploration and permitting processes will be crucial for the industry’s sustainability and growth in the future.
