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The World Gold Council (WGC) has reported that the gold mining industry is facing challenges in maintaining production growth due to the increasing difficulty in finding new deposits of the precious metal.
Chief Market Strategist, John Reade, stated that while there was a 4% year-on-year increase in mine production in the first quarter of 2024, overall production has plateaued since 2016-2018 with no significant growth.
Data from the international trade association shows that mine production only grew by 0.5% in 2023 compared to the previous year, and the growth rates have been declining since 2020.
Reade emphasized that after a decade of rapid growth, the industry is now struggling to sustain production growth due to the scarcity of new gold deposits worldwide.
The process of large-scale gold mining is capital-intensive and involves extensive exploration and development, taking an average of 10 to 20 years before a mine becomes operational.
Additionally, the likelihood of a discovered gold deposit progressing into a functioning mine is low, with only about 10% of global discoveries containing enough metal to justify mining.
The majority of mined gold comes from China, South Africa, and Australia, with estimated excavatable reserves at around 57,000 tonnes according to the United States Geological Survey.
In addition to the challenges in finding new deposits, obtaining government permits has become increasingly difficult and time-consuming, making the overall mining process more complex.
John Reade highlighted the growing difficulty in securing licences and permits as a significant obstacle in the industry.
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