Gold is getting harder to find as miners struggle to excavate more, World Gold Council says

According to data from the international trade association, mine production inched up only 0.5% in 2023 compared to a year ago.

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%.

“I think the overwhelming story there is: after 10 years of rapid growth from around 2008, the mining industry is struggling to report sustained growth in production,” said Reade.

New gold deposits are becoming harder to find around the world as many prospective areas have already been explored, he elaborated.

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.

Even during the exploration process, the likelihood of a discovery progressing into the development of a mine is low, with only about 10% of global gold discoveries containing sufficient metal to warrant mining.

Around 187,000 metric tons of gold has been mined to date, with the majority coming from China, South Africa and Australia. Gold reserves that can be excavated are estimated at around 57,000 tonnes, according to the United States Geological Survey.

Aside from the discovery process, government permits getting harder to secure and requiring more time to come through have made mining more difficult, Reade added. Securing licenses and permits needed before mining companies can start operations can take several years.

Additionally, many mining projects are planned for remote areas that require infrastructure such as roads, power, and water, resulting in added costs in building these mines and financing operations, Reade said.

“It’s getting harder to find gold, permit it, finance it, and operate it,” he said.

Gold prices are taking a breather after rallying to record highs in recent months bolstered by strong demand led by China. Spot gold is currently trading at $2,294.3 per ounce.