Activity in the gold market over the next three decades is the focus
of a just-released 51-page report from the World Gold Council
titled Gold 2048: The Next 30 Years for Gold.
Gold production has doubled over the past 30 years, but few believe
that trend will continue, says Mark Fellows, head of mine
supply analysis for precious metals consultancy Metals Focus.
By 1987, according to Fellows, 60 percent of mine production
globally was executed by South Africa, the United States, Australia
and Canada. Today, that demographic has dropped to just 30 percent of
overall gold output.
China, in 2016, produced 464 tons of gold, 60 percent more than
second-place Australia, with third-place Russia at 274 tons.
Fellows says that, if current mining rates are maintained over the
next 30 years, by 2048 another 97,000 tons of gold will be added to
Significant capital investment will be required to bring the next
generation of gold mines into production, according to Fellows.
“At present, it is estimated that an incentive price of around
US$1,500 per ounce is required to maintain global production at
current levels,” Fellows writes
This assumes the following, he says:
• a U.S. $75 an ounce average discovery cost for gold reserves
through exploration (MinEx Consulting, 2016).
• an average capital cost (on a per ounce basis) to build a mine of
U.S. $200 an ounce produced life-of-mine.
• the 90th percentile of the gold mining industry’s all-in
sustaining costs sits at U.S. $1,150 (Metals Focus – Gold Focus 2017)
• a return on investment of 15 percent, which could be considered at
the lower end of acceptability, especially for less politically secure countries.
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