After declining in 2019, global gold production was adversely affected by the COVID-19 pandemic in 2020, while the suspension of expansion works and contractions from mines nearing closure also added to the decline. Overall, output is estimated to have decreased by 5.2 per cent to 108 million ounces (moz), according to GlobalData.
Global gold production is forecast to increase by 5.5 per cent in 2021 to 113.9moz and rise to 124.1moz by 2024 – a 2.9 per cent compound annual growth rate (CAGR).
Canada, Indonesia, Peru, and the US are expected to be the key contributors to this growth. Combined production in these countries is expected to recover from an estimated 20.1moz in 2021 to 25.3moz in 2024.
Global gold production (million ounces), 2014-2024. Image credit: GlobalData, Mining Intelligence Center.
Associate Project Manager at GlobalData, Vinneth Bajaj, said key projects expected to commence operations during the forecast period include the Turquoise Ridge underground expansion project in the US, which is currently undergoing construction.
“With an annual gold production capacity of 500koz, the project is expected to be commissioned in late-2022,” Bajaj said.
“The Salares Norte project in Chile, which is wholly owned by Gold Fields, is currently under construction. With an annual gold production capacity of 450koz and a development capital expenditure of about US$860 million, the project is expected to commence operations in 2023.”
The greatest impact of COVID-19 on gold production was observed during the first half of 2020, when six of the top 10 gold producers reported a collective 8.4 per cent year-on-year (YOY) fall in their output.
Major declines were from Barrick (12.3 per cent), Newcrest (15 per cent), and Agnico Eagle (8.4 per cent). While major contributors offsetting the declines were Kirkland Gold (48 per cent), due to the acquisition of the Detour Lake project by Detour Gold in January 2020, and Zijin (5.9 per cent).
Several gold mines were forced to suspend operations temporarily due to the pandemic, including Barrick’s Veladero, Pueblo Viejo and Porgera mines and Agnico’s Nunavut, Quebec and Mexican mining operations.
China, after reporting an all-time high of 16.7moz of gold production in 2014, has been on a downtrend ever since, due to policy changes and depleting ore reserves.
Adding to these factors, the pandemic struck the country’s output hard during the first quarter of 2020. Therefore, China’s gold production is estimated to have declined by 7 per cent to 12.4moz in 2020, according to GlobalData.
The pandemic also had a significant impact on the African operations mainly during the second quarter of 2020, where production is gradually shifting its base towards the Western African countries.
Gold mines that were temporarily suspended in Africa include Mponeng, Kalgold and Zondereinde in South Africa, Obuasi in Ghana, Hounde in Burkina Faso and Fekola in Mali.
Overall, gold production from South Africa is expected to have declined by 10.9 per cent in 2020, with declines also in Guyana (15.9 per cent), Ghana (7.5 per cent) and Mali (5.6 per cent).
In Indonesia, production is expected to have declined by 28.9 per cent, owing to the transition of the Grasberg open-pit mine, the country’s largest producer of gold.
Unlike other key producers, Bajaj said Australian gold miners remained largely unaffected by the outbreak, as stringent measures were adopted by the government to contain the outbreak enabling minimal disruptions to mining activities.
“State governments, including Western Australia, South Australia, Tasmania and the Northern Territory, began to close their borders from late March, with certain exceptions for essential service workers. Overall, gold production in Australia is expected to have grown by 4.3 per cent in 2020, reaching 12moz,” he said.
