In August 2020, the price of gold hit a record high when it pushed over $2,000 an ounce. This was driven by gold traders and the demand for it. Gold continues to be a top investment, a key component in electronic products, and a globally renowned status symbol. Gold is also a limited resource and there will be a time when there is none left to mine.
As the Covid-19 pandemic sparked panic, there was a surge in gold buying, and now analysts are becoming concerned over how much of the precious metal there is left to mine. In 2019, for the first time since 2008, there was a decline in the annual production of gold. According to Hannah Bardstaetter from the World Gold Council and Ross Norman from Metals Daily, mine production is on a downward trajectory. Does this mean we are running out of gold?
Some experts believe we have reached a peak in mining as we’re excavating more gold than we ever could in a single year. With this level of activity, mining is becoming more and more challenging as major new discoveries are becoming increasingly rare, and existing reserves are slowly but surely being depleted. According to statistics, a total of approximately 190,000 tons of gold has already been mined and there is around 20% still left to mine.
Previously known as a prime gold mining country, South African mines are now nearing exhaustion. These are typically large, low-cost mines. Smaller Chinese minds have higher costs and yet, China is the largest gold mining company in the world at the moment. They are followed by other major gold producers like Canada, Peru and Russia.
Russia is not only one of the major gold production regions in the world; they are also stockpiling their gold supplies, which is raising forex reserves to unprecedented highs. Besides the mining superpowers, there are very few regions left to explore for gold deposits, and the most promising are in politically and economically unstable parts of the world, like West Africa.
There are also gold deposits in Antarctica, in places along the ocean floor, and on the moon. As you can imagine, none of these regions are economically viable to mine. Antarctica’s extreme weather conditions make it impossible, and the cost of mining gold under the ocean and transporting it to the surface is almost as exorbitant as mining gold on the moon, and getting it back to earth.
Despite the concerns around the mining industry, there is one major difference between gold and other non-renewable resources like gas and oil; gold can be recycled. Efforts to do this are already underway with gold extracted from electronic waste. Electronic products that are seen as disposable, like mobile phones, contain gold. With initiatives to extract this gold and recycle it, it means that even if we can no longer mine gold, the world will never run out of it.