Video: Gold production faces a cliff after record output next year, CRU analyst predicts

Global gold production will peak at about 3,250 tonnes (about 105 million ounces) next year, marking a historic high before entering a prolonged decline, a London event heard this month.

From 2025 onward, global gold production is forecast to fall. Reserves will deplete, ore grades will decline and aging mines will close, CRU Consulting gold and base metals asset analyst Oliver Blagden told The Northern Miner’s International Metals Symposium in London on Dec. 2.

“This will be the most gold we’ve ever mined in a single year, ever,” Blagden said.

The decline marks a turning point for an industry facing dwindling reserves, geopolitical risks, and few new projects. Despite high profitability from strong gold prices, experts warn that without fresh investments, production could drop sharply, tightening supply and reshaping markets.

But, even if all planned projects come online, production could drop by as much as 17% by 2030, he noted.

Blagden highlighted the challenges of maintaining output levels, particularly in regions like China and Russia. China is the world’s largest gold producer, according to CRU. It contributes 11% of global output but faces modest reserves relative to its production rate, indicating a potential supply bottleneck. Similarly, geopolitical pressures and diminishing ore quality tempered Russia’s production expansion.

Resource nationalism

Jurisdictional risks add to the challenges, the analyst told a room of industry execs and investors. Blagden noted a rise in resource nationalism in West Africa. Countries like Mali and Burkina Faso have nationalized operations, deterring foreign investment.

“We’re seeing the impact of geopolitical instability in these regions, which adds another layer of complexity for miners,” he said.

Conversely, Blagden noted bright spots. These are Argentina’s mining-friendly reforms and potential shifts in United States policy. They could streamline permits and encourage new developments. However, he cautioned that North America, while politically stable, remains the highest-cost region for gold mining globally.

Greenfield deficit

Despite these challenges, the gold mining industry remains highly profitable. Blagden said 97% of gold producers are operating with positive margins, assuming a gold price of US$2,235 per ounce.

Average all-in sustaining cost (AISC) margins stand at 47%, reflecting the industry’s strong financial footing. “It’s been a great couple of years to be a gold miner,” he noted.

Yet, Blagden warned that profits hide a troubling deficit in new greenfield projects. High prices have not spurred enough investment in exploration. High-grade, well-located deposits are harder to find.

Decisive action

Blagden noted gold’s unique position among commodities. Unlike metals such as copper or lithium, gold is not consumed but accumulated.

“If we stopped all gold mining today, above-ground stockpiles could satisfy fabrication demand for 75 years,” he said.

In 2023, central banks set record purchase levels. They continue to support prices, now at US$2,626.20 per ounce.

Blagden called for miners to act decisively during this period of high profitability. “Without new projects, mines will close, production will fall, and profits will shrink,” he said.

He urged miners to invest in strategic acquisitions, brownfield expansions and exploration to extend mine life and ensure future supply. “The industry must seize this window of opportunity to sustain long-term viability.”

Watch the full presentation below: