Last month, gold hit a record high of hit 2,000 an ounce.
Although the price hike has been driven by
gold traders, it raises questions about the supply of the precious metal and
when it will end.
Gold is in great demand as a storehouse of
wealth, a symbol of status and a key component in many electronics.
But it is also a limited resource, and
eventually, there will be a time when there is no one left to dig.
Top gold
Experts talk about the concept of peak
gold - when we can do the most mining in any one year. Some think we may have
already reached this point.
According to the World Gold Council, gold
mine production in 2019 was 3,531 tons, which is 1% less than in 2018. This is
the first annual decline in production since 2008.
"While growth in mine supply may slow
or slow in the coming years as existing reserves dwindle and new major
discoveries become increasingly scarce, this suggests that production may still
be a bit premature." World Gold Council
Even when gold peaks, experts say there is
a dramatic drop in production soon after. Instead, we may see a gradual decline
in mass production over the decades.
Ross Norman of MetalsDaily.com added:
"Mine production has a flat line and its potential is going downhill but
not dramatically."
Title: Gold Mining Production "Flat
Line"
So how much is left?
Mining companies estimate the amount of
gold that remains in the ground in two ways.
Reserves - Gold at the current price of
gold
Resources Gold that, after further
investigation or at a higher price level, will probably become more economical
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The amount of gold reserves can be
estimated’ more accurately than the resources, although it is still not an easy
task.
According to the US Geological Survey,
gold reserves are currently estimated’ at about 50,000 tons underground.
To put this into perspective, a total of
about 190,000 tons of gold has been’ mined, although estimates vary.
Due to these rough figures, mining is
still pending. But it is a moving target.
New technologies could potentially extract
some known reserves that are not yet economically accessible.
Recent innovations include big data, AI
and smart data mining that could potentially improve processes and reduce
costs.
Robotics is already being used’ on some
sites and is expected’ to quickly become the standard technology for mining.
The biggest sources
The largest single source of gold in
history is South Africa's Witwatersrand Basin. Witwatersrand has received about
30% of all gold made so far.
Other major sources of gold include the
deep among mines in China, the Super Pit and Newmont Boddington mines in
Australia, the Grasberg Mine in Indonesia and mines in Nevada, USA.
China is currently the world's largest
gold miners, while Canada, Russia, and Peru are also major producers.
In terms of companies, Bark Gold's Nevada
Gold Mines is the world's single largest gold mining complex, producing about
3.5 m 3.5 million ounces a year.
Experts say that although new gold mines
are still being discovered’ the discovery of large deposits is becoming rare.
As a result, much of the gold production
now comes from older landmines that have been in use for decades.
Difficult for me?
Large-scale mining is the ultimate
capital, having used a lot of machinery and expertise for mining in many areas
above and below the surface.
Today, about 60% of the world's mining
work is surface mines, with the rest underground.
Mr. Norman added: "Mining is getting
harder because of the large number of large, low-cost landmines and older mines
in South Africa.
"In contrast, Chinese gold mines, on
the other hand, are much smaller, and therefore more expensive."
There are relatively few unsafe areas left
for gold mining, although perhaps the most promising is in some of the more
volatile parts of the world, such as West Africa.
Record height
Although gold prices rose to record highs
in August, this does not automatically translate into an increase in gold
mining activity.
In fact, changes in gold mine production
often lead to changes in the price of gold.
Ms. Brandstaiter at the World Gold Council
added, "In the context of the operations involved, it takes time to change
mining plans in response to changes in external factors such as the price of
gold."
Also, record prices have risen during the
Covid-19 ban, as sites have been shut down or partially shut down to’ prevent
the spread of the virus.
Rising prices have been plagued’ by
epidemics as investors see gold as a safe haven in times of economic
uncertainty.
Impossible places
Although the amount of gold in the earth
can be difficult to determine, it is not the only source. There is also gold on
the moon.
However, the costs of mining and
transporting it back to land are significantly higher than the cost of gold.
"Whenever it exists, it won't make
sense economically. You'll lose a lot more money than you sell it," said
astronomer Sean O'Sullivan.
Similarly, there are some gold deposits in
Antarctica that can never be economical and difficult for me due to the extreme
weather conditions of the continent.
Gold is also scattered along the surface
of the sea but it is considered’ non-economic.
One of the factors of gold is that, unlike
other renewable sources such as oil, it can be recycled. So we will never run
out of gold, even when we can't fill it anymore.
A large amount of gold is used’ in
electronics which is widely seen as disposable mobile phones. The average phone
amounts to a few pounds of gold.
Efforts are already underway to recycle
gold extracted from electronic waste.
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