Miners: We're Running Out of Gold
Source: AFP (11/25/09)
"All the gold ever produced. . .would barely fill two Olympic-size swimming pools."
In terms of production, "2009 is the outlier as far as the trend," Omar Jabara, spokesman for U.S.-based Newmont Mining, the second-largest gold producer in the world, told AFP.
Almost everywhere, mineral deposits are being exhausted and new deposits are not being found fast enough to replace them.
South Africa, which was once at the vanguard of world production, saw a 9.3% drop in production YOY in the second quarter, according to its Chamber of Mines.
Globally, "it's just that the assets are not there anymore," Tonya Todd, a spokeswoman for Goldcorp, Canada's second biggest gold mining firm.
Omar Jabara explained that it takes from 7–10 years to start production of a mine after finding an economically viable gold deposit.
And "no significant new discoveries have been found in recent years, despite the higher gold prices and despite higher exploration budgets," said Borg.
What is already happening and is likely to continue is that the grade or quality of deposits industry-wide will be "on average lower than deposits discovered in the past," opined Jabara.
The global gold mine production is forecast to rise by 3.7% in 2009 but will satisfy only two-thirds of demand, which soared this year amid the global financial crisis to 3,800 tons, according to the World Gold Council.
Historically, gold recycling or the sale of central bank stockpiles made up for supply shortages.
But during the latest financial crisis, banks have been buying up gold in large quantities to protect monetary reserves against weakness in the U.S. dollar.
"All the gold ever produced through history amounts to about 165,000 tons, which would barely fill two Olympic-size swimming pools," said Jabara.