Gold has been used as a medium of exchange for thousands of years and has held its value throughout that time. That is what makes gold so desirable. Gold has always represented undiluted value and a financial hedge against bad economic times.
The fact is, however, that the supply of gold may be diminishing. Old, profitable mines have been depleted, and finding new mines is becoming more difficult.
With the COVID pandemic throwing global economies into chaos, the current gold price has been hovering around $1,900 per ounce these last few weeks.
At this time, there is no new major gold mining operation that is able to increase the known supply of gold. We are using more gold than we are producing.
In 2019, global gold mining production amounted to 3,463 tons. This was one percent less than in 2018. South Africa, once the world’s leading gold producer, has seen its mining production decrease steadily since 1970, as have many other gold-producing countries.
China produced 383.2 tons of gold in 2019. The country’s production has been declining for three years. One of the causes of diminishing production is stricter environmental policies.
Russia produced 329.5 tons of gold in 2019, exceeding its 2018 production by 50 tons. The country produces 83 percent of Europe’s gold and is the world’s number two gold producers. The Russian government itself is the largest purchaser of its own gold.
Australia produced 325.1 tons of gold in 2019. It has been steadily increasing its gold production for the past seven years. The precious metal industry makes up more than 50 percent of Australian exports and comprises 8 percent of its GDP.
4. United States
The United States produced 200.2 tons of gold in 2019. Gold production is spread throughout 12 of the 50 states, and those productions amount to 6.1 percent of the world’s gold mining, or $8.9 billion worth of the metal.
Nevada is responsible for approximately 78 percent, or 173.6 tons, of the US’ gold mining in 2019.
Canada produced 182.9 tons of gold in 2019. It is the world’s fifth-largest gold producer, although 2019 showed a decrease.
There are new mining projects in Nunavut, and Quebec, which are contributing to Canada’s continued strong gold output. The country’s gold mining is expected to increase by 2.7 percent through 2023 and is expected to reach 7.6 million ounces.
Peru produced 143.3 tons of gold in 2019. This is down for the fourth year in a row. The reason for the decrease is that Peru is closing illegal mines in the La Pampa area and the lower grade gold available in the existing, open mines.
Ghana produced 142.4 tons of gold in 2019 and is Africa’s number one producer of gold. High-level gold mining companies such as AngloGold Ashanti and Gold Fields are shifting their attention away from South Africa and toward Ghana, where mining is less expensive. Ghana has 1,000 tons of reserve gold to be mined.
8. South Africa
The former major global gold producer has seen a slowdown in production for over a decade, with tonnage produced only up for 2013. South Africa produced 118.2 tons in 2019. The cost of maintaining and running its gold mines has become excessive, forcing mines to close. However, it still has the deepest gold mine in the world, the Mponeng mine, which extends two and a half miles below ground.
Mexico produced 111.4 tons of gold in 2019. Gold output increased by 50.8 tons in 2008 and 130 tons in 2017. The cost of mining in Mexico is low and attractive.
Brazil produced 106.9 tons of gold in 2019, which is 10 tons more than in 2018. The industry has encountered some illegal gold mining, but Brazilian President Jair Bolsonaro is encouraging the development and exploration of Amazon’s minerals.