The World Gold Council (WGC) has reported that the gold mining industry is facing challenges in maintaining production growth due to a decrease in new deposits. Despite a 4% increase in production in the first quarter of 2024, overall growth has been stagnant since 2016. In 2023, mine production only saw a modest increase of 0.5%, compared to 1.35% in 2022 and 2.7% in 2021, with a decline of 1% in 2020.
According to WGC Chief Market Strategist John Reade, the industry has been struggling following a period of rapid growth that lasted from 2008. The task of discovering new gold deposits has become increasingly challenging as many regions have already been extensively explored. Large-scale mining operations require significant investments and can take between 10 to 20 years to develop. Moreover, obtaining government permits and establishing necessary infrastructure, particularly in remote areas, present additional obstacles.
Despite a recent price rally, gold prices have stabilized at $2,294.3 per ounce. It is estimated that only around 10% of global discoveries contain enough gold to make mining economically viable, underscoring the ongoing challenges faced by the industry.
