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23 Sep, 2020 15:11

World may be running out of gold with mine production in decline

World may be running out of gold with mine production in decline

While uncertainty created by the global pandemic has sparked a surge in gold buying, analysts are raising concerns over how much of the precious metal is left to mine.

According to the World Gold Council, gold mine production totaled 3,531 tonnes in 2019, which is one percent lower than in the previous year. That is the first annual decline in production since 2008.

Statistics showed that around 190,000 tonnes of gold has been mined in total. Estimates do vary but based on those rough figures, there is about 20 percent still left to be mined. Some experts say we have mined the most we ever can in any one year, others believe we may have already reached that point.

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"While the growth in mine supply may slow or decline slightly in the coming years, as existing reserves are exhausted, and new major discoveries become increasingly rare, suggesting that production has peaked may still be a little premature," said Hannah Brandstaetter, a spokesman for the World Gold Council.

She was echoed by Ross Norman of MetalsDaily.com, who told Yahoo Finance that "Mine production has flat-lined, and is likely on a downward trajectory, but not dramatically so."

Experts say that while new gold mines are still being found, discoveries of large deposits are becoming increasingly rare. In fact, most gold production currently comes from older mines that have been in use for decades, they add.

Around 60 percent of the world's mining operations are currently surface mines, while the remainder are underground ones.

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"Mining is getting harder in the sense that many of the large, low-cost mines, and older ones such as in South Africa, are nearing exhaustion," said Norman. "Chinese gold mines, on the other hand, are much smaller, and therefore have higher costs."

China is currently the world's biggest miner of gold while other major producers are Canada, Russia, and Peru. Experts note that there are relatively few unexplored regions left for mining, and possibly the most promising are in some of the more unstable parts of the world, such as in West Africa. 

The good news, however, is that unlike other non-renewable resources like oil, gold can be recycled. That means the world will never run out of gold, even when we can no longer mine it.

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