World Gold Council Reports Challenges in Locating Mine Deposits By Yolowire

The World Gold Council has reported that finding new deposits of gold is becoming increasingly challenging, and mine production is expected to decelerate in the coming years.

Currently, gold production is at a peak, with prices soaring to record levels. However, the World Gold Council indicates that mine production reached its highest point in 2018 and has not experienced significant growth since then. In fact, according to recent data, gold mine production increased by only 0.5% year-over-year in 2023, even as the price surpassed $2,400 per ounce.

After a surge in gold production during the decade from 2008 to 2018, the mining industry is now facing difficulties in maintaining output. The main issue is that new gold deposits are becoming scarce, and many existing mine sites are at the end of their operational lifespan.

Moreover, large-scale gold mining is capital-intensive and can take up to 20 years to develop a new mine. Presently, only about 10% of gold discoveries contain enough viable material to justify establishing a mining operation.

To date, approximately 187,000 metric tons of gold have been extracted, predominantly from China, South Africa, and Australia. The remaining gold reserves are estimated at around 57,000 tonnes, according to the U.S. Geological Survey.

Analysts believe this scenario could drive gold prices even higher as the available supply diminishes. As of now, the price of gold stands at $2,324.80 per ounce, following a peak of $2,450.05 earlier in May.