Gold Production on Pause as Mining Industry Reveals Gold Becomes Difficult to Find

By Thea Felicity

Jun 10, 2024 11:24 AM EDT

Gold Prices Soar Due To Uncertainty Caused By Wars
BIRMINGHAM, ENGLAND - DECEMBER 13: three 1kg gold bullion bars lay on the counter in a gold dealers in Birmingham's jewellery quarter on December 13, 2023 in Birmingham, England. Gold prices have increased since the Ukraine War but have soared to record highs since the start of the Hamas-Israel war. Other factors are the weakening US dollar and expected rate cuts from the Federal Reserve.
(Photo : Christopher Furlong/Getty Images)

As reported by CNBC, the World Gold Council has announced challenges facing the gold mining industry as deposits decline, making it harder to sustain production growth. 

Despite a slight increase in mine production in 2023, the industry has seen stagnation since 2016-2018.

John Reade, Chief Market Strategist at WGC, emphasizes the difficulty of finding, permitting, financing, and operating gold mines. Only a small fraction of global gold discoveries lead to viable mining operations, so the industry faces significant hurdles.

Remote project locations will also necessitate substantial infrastructure development, increasing costs. As gold prices pause following a surge in demand, currently trading at $2,294.3 per ounce, the industry finds it hard to maintain production levels.

READ MORE: Mini Gold Bars Are Causing a Frenzy in South Korea as Buyers Rush to Get Them in Convenience Stores, Vending Machines

Finding Gold

To make matters worse, finding gold is also becoming increasingly challenging due to a combination of factors as gold prices surge. 

Finding new gold deposits is currently a struggle since many potential areas have already been extensively explored and mined. 

Even if new deposits are discovered, exploration requires substantial investment, and the success rate is low, with only about 10% of discoveries being economically feasible for mining. Not to mention that obtaining the necessary permits and licenses for mining operations has become more cumbersome, with regulatory processes becoming lengthier and more complex over time. 

Large-scale gold mining also demands billions of capital investment and long development periods, typically spanning 10 to 20 years before a mine is operational. 

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