Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

World Gold Council: Gold is becoming harder to find

Published 11/06/2024, 12:53 pm
© Reuters

Investing.com - The gold mining sector is grappling to maintain production growth as discovering new gold deposits is becoming increasingly challenging, according to the World Gold Council.

John Reade, Chief Market Strategist at the World Gold Council, stated that while the first quarter of 2024 saw a record 4% year-on-year increase in mine production, the bigger picture reveals a plateau in growth since 2018. Data from the international trade association supports this, indicating that mine production in 2023 only saw a slight 0.5% increase compared to the previous year.

Reade commented on the difficulties faced by the industry, saying, "It’s getting harder to find gold, permit it, finance it, and operate it."

The mining industry, after experiencing a decade of rapid growth starting in 2008, is now struggling to report sustained growth in production. Reade elaborated that new gold deposits are becoming harder to find worldwide as many potential areas have already been explored.

Large-scale gold mining is a capital-intensive process, requiring significant exploration and development. On average, it takes 10 to 20 years before a mine is ready for production. Even during the exploration process, the chance of a discovery turning into a developing mine is low, with only 10% of global gold discoveries containing enough metal to justify mining.

To date, approximately 187,000 metric tons of gold have been mined, with the majority coming from China, South Africa, and Australia. The United States Geological Survey estimates that about 57,000 tonnes of gold reserves can still be excavated.

⚠️Monitor your favourite gold stocks with InvestingPro! CLICK HERE to unlock access to AI-powered ProPicks, ProTips, and more! for 10% off use coupon code: "INVPRODEAL"⚠️

The process of securing government permits has become more difficult and time-consuming, adding to the challenges faced by the mining industry. Many mining projects are planned for remote areas, requiring infrastructure like roads, power, and water, leading to additional costs for building mines and financing operations.

Despite recent record highs for gold prices, driven by strong demand from China, the precious metal is currently trading at $2,294.3 per ounce.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.