Last month, the price of gold reached its record, exceeding US $ 2,000 an ounce (31.1 grams), about R $ 11 thousand.
Although this price increase has been driven by market operators, the peak in price brings back the question of the availability of the precious metal – and how close we are to depleting its mineral reserves on Earth.
Gold demand is on the rise as an investment, a status symbol and a key component in many electronic products. But it is also a finite resource and eventually a stage will come when there will be nothing left to explore.
Some believe that perhaps we have already reached the peak of gold production, which is when the maximum level of extraction of a possible mineral resource is reached in one year.
Gold mine production totaled 3,531 tonnes in 2019, 1% less than in 2018, according to the World Gold Council. This is the first annual reduction in production since 2008.
“Although supply growth may slow down or slightly decrease in the coming years, as existing reserves are depleted and new discoveries become increasingly rare, suggesting that production has peaked may be a little premature,” says Hannah Brandstaetter , spokesman for the World Gold Council.
When the peak is reached, experts say that production does not usually decline dramatically in the years immediately following.
Instead, we could see a gradual depletion of production that would last for several decades.
“Production has stabilized and is likely to follow a downward path, but not drastically downward,” adds Ross Norman of MetalsDaily.com.
How much gold is left?
Miners estimate the volume of gold that remains in the soil in two ways. Mineral reserves, which are the economically viable gold to be extracted at the listed price; and mineral resources, which are gold that will become economically viable after further research or at a higher price.
The volume of gold mineral reserves can be calculated more accurately than resources, although it is still not an easy task.
The underground stockpile of gold reserves in the world is currently estimated at around 50,000 tonnes, according to the United States Geological Survey.
To put this in perspective, some 190,000 tonnes of gold have already been mined in total, although estimates vary.
But these numbers are constantly changing.
The advancement of new technologies may make it possible to take advantage of some reserves that have already been discovered but which are not economically viable today.
The most recent innovations include the use of big data (large databases) and artificial intelligence, which can optimize processes and reduce costs.
Robotics is already being used in some locations and is expected to become more and more a common technology in mine exploration.
Largest mines in the world
The largest source of gold in history was the Witwatersrand basin in South Africa, which accounts for approximately 30% of all gold already mined in the world.
Other important sources of gold include the extremely deep Mponeng mine in South Africa; the Super Pit and Newmont Boddington mines in Australia; the Grasberg mine in Indonesia and the mines in the state of Nevada in the USA.
The quantity produced is a good indicator of the size of countries’ mineral reserves. Currently, China is the country with the largest gold production in the world and accounts for 11% of the global total, according to 2019 data from the World Gold Council and Metals Focus.
- China: 383.2 tons
- Russia: 329.5 tons
- Australia: 325.1 tonnes
- USA: 200.2 tons
- Canada: 182.9 tons
- Peru: 143.3 tons
- Earn: 142.4 tons
- South Africa: 118.2 tonnes
- Mexico: 111.4 tons
- Brazil: 106.9 tons
In terms of companies, Nevada Gold Mines, owned by Canadian Barrick Gold, is the largest gold mining complex in the world, producing about 3.5 million ounces of metal per year.
Although new gold mines are still being found, experts note that discoveries of large deposits are increasingly rare.
As a result, most of the gold production today comes from older mines that have been in business for decades.
Leading mine in Latin America
The Pueblo Viejo mine, in the Dominican Republic, is the one that produces the most in all of Latin America.
It was the fourth mine that produced the most gold in 2018, with a total of 30.1 tons.
But its production rate was slowing down due to the lower concentration of gold in the extracted mineral, explains the magazine oroinformación.com.
Its owner, Canadian Barrick Gold, embarked on an expansion process “that will allow the leading mine (in the region) to extend its useful life until the 2030s or even later,” says the publication.
Harder to extract?
Large-scale mining is resource intensive, as it employs many expensive machines and systems to extract vast areas on and below the surface.
Today, about 60% of world operations involve open pit mines, while the rest are underground.
“Mining is becoming more difficult in the sense that many of the big low-cost mines and the oldest ones, like those in South Africa, are on the verge of exhaustion,” adds Norman.
“Chinese gold mines, on the other hand, are much smaller and therefore have higher costs.”
Relatively few unexplored regions remain for gold mining, although possibly the most promising are in some of the most unstable parts of the world, such as West Africa.
Larger of all time
Although gold prices reached record levels in August, this does not automatically translate into an increase in gold mining activity.
In fact, changes in the production of gold mines tend to respond belatedly to what happens with the price of gold in international markets.
“Given the scale of the operations involved, it takes time to modify a mine’s plans in response to changes in external factors, such as the price of gold,” adds Brandstaetter.
In addition, it should be borne in mind that the maximum prices have been recorded recently due to the covid-19 pandemic.
The health crisis made it difficult to extract from the mines, as the sites were totally or partially closed to slow the spread of the virus.
Price increases were actually driven by the pandemic, as investors see gold as a safer asset in times of economic uncertainty.
Although underground gold can be difficult to quantify, it is not the only source.
There is also gold on the Moon. However, the costs associated with mining and transporting back to Earth are significantly higher than the value of the gold itself.
“Although it exists, it would never be economically significant to extract it,” says space expert Sinead O’Sullivan.
“An infinitely larger amount of money would be spent extracting gold than could be done by selling the metal.”
Something similar occurs in certain deposits in Antarctica, where there are some reserves that may never be profitable due to the continent’s extreme climatic conditions.
Gold is also scattered on the ocean floor – and it is also considered financially unviable for extraction.
However, one advantage of this metal is that, unlike other non-renewable resources – such as oil, gold can be recycled.
Therefore, we will never run out of gold, even if we can no longer extract it or all reserves have been exhausted.
Much of the gold is used in electronic products considered to be disposable, such as cell phones. The amount of gold in an ordinary phone is worth a few dollars, for example. And plans to recycle gold extracted from e-waste are already underway.