Gold production increased for the 10th consecutive year to total 107.3 million ounces (Moz) in 2018 and is expected to reach a new record high of 109.6 Moz in 2019, according to recent metals and mining research by S&P Global Market Intelligence.
According to Christopher Galbraith, Research Analyst at S&P Global Market Intelligence, the forecast growth of 2.3 Moz in 2019 will be the strongest growth in the past three years, debunking commentary calling for peak gold.
More than half of the increase is expected to come from new mines that are anticipated to come on stream this year or have recently been commissioned. Examples of those include the Gruyere JV in Western Australia (50 per cent Gold Fields Ltd; 50 per cent Gold Road Resources Ltd.) and the restarted operations at Obuasi in Ghana (AngloGold Ashanti Ltd.).
“Looking at the current project pipeline, we expect output to stay steady until 2022 due to advancements at developing projects. From there on, gold production is expected to fall by over 3 Moz in 2023 and up to 5 Moz in 2024,” Mr Galbraith said.
Although global production is expected to start decreasing, the research indicates that not all jurisdictions will have shrinking production. By 2024, Canada will be the only major gold-producing country to increase output. Several Canadian mines, including Agnico Eagle Mines Ltd.’s Meliadine and New Gold Inc.’s Rainy River, are driving growth in national output and it is expected to last for a few years.
S&P Global Market Intelligence forecasts that the increase will push Canada past the U.S. in gold production in 2019, to become the world’s fourth-largest gold producer. Very few Canadian gold mines face depletion, and the country’s output is expected to increase by four times the second-largest increase, by Ecuador, over the next five years.
Ecuador’s projected increases come from a handful of new projects, including Lundin Gold Inc.’s Fruta del Norte and INV Metals Inc.’s Loma Larga.
Turkey and Mauritania’s expected increase in production comes from projects owned by or involving major producer partners.
In Turkey, new production is expected from Oksut in 2020, Agi Dagi, Kirazli and Yenipazar in 2021, Hod Maden in 2022, and Gediktepe in 2023.
Meanwhile, Mauritania’s increase comes exclusively at the projected commissioning of the Phase 2 expansion at Tasiast, 2020-21.
Among the countries with lower projected production, Australia’s output is projected to fall the most. Australia is forecast to slip to fourth place globally in 2024 due to depletion of several long-lived assets like St. Ives, Paddington, Telfer, Edna May, Southern Cross and Agnew/Lawlers. The expected commissioning of Mt Todd and reactivation of Union Reefs Operations Centre are forecast to partly mitigate the loss from those aforementioned closures.
Aside from Australia, Peru’s production is also expected to trend downwards over the next five years, with Orcopampa, La Zanja and Tambomayo facing depletion before 2024. With closure only a few years further out, Lagunas Norte and Yanacocha will also be producing far less gold in 2024, than they have historically.