According to the World Gold Council, Miners Face Increasing Difficulties in Extracting Gold: Market Prices Expected to Rise

 According to the World Gold Council, miners are finding it increasingly difficult to extract gold

Key Point

● According to the World Gold Council, as gold reserves become harder to uncover,

the mining industry is finding it difficult to maintain production growth.

● Mine production increased by just 0.5% in 2023 over the previous year, according to

figures from the International Trade Association.

● Gold mining is becoming more difficult to locate, approve, fund, and manage,

according to WGC's John Reade.

The World Gold Council claims that as gold reserves

become tougher to uncover, the mining industry is finding

it difficult to maintain production growth.

“We’ve seen record first quarter mine production in 2024 up 4% year on year. But thebigger picture, I think about mine production is that, effectively, it plateaued around 2016,2018 and we’ve seen no growth since then,” WGC Chief Market Strategist John Reade said.

“In 2022, the growth was 1.35% year on year, the year before it was 2.7%, while in 2020,

global gold production logged the first decline in a decade, sliding 1%.

He went on to explain that because so many potential locations have already been

investigated, it is getting more difficult to identify new gold deposits worldwide.

Large-scale gold mining is capital-intensive, and requires significant exploration and

development, taking an average of 10 to 20 years before a mine is ready for production,

according to WGC.

The chances of a discovery moving forward into the building of a mine are slim even during

the exploration stage; only 10% of all gold discoveries worldwide contain enough metal tobe worth extracting.

Up till now, almost 187,000 metric tons of gold have been extracted, most of it from

Australia, South Africa, and China. The United States Geological Survey estimates that thereare around 57,000 tonnes of gold reserves that can be extracted.

Reade stated that developing these mines and funding operations would cost more

because many mining projects are slated for distant locations that lack infrastructure like

power, water, and roads.

He declared, "It's becoming harder to find gold, permit it, finance it, and run it.”

Following a surge to all-time highs in recent months, driven primarily by Chinese demand, gold prices are again taking a rest. At the moment, spot gold is going for $2,294.3 an ounce.