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LAWRIE WILLIAMS: Top 20 Gold producing nations in 2020 and peak gold

As London-based  precious metals=focused consultancy, Metals Focus reports in its 108-page long Gold Focus 2021 report, global gold mine production  in 2020 fell for the second consecutive year, declining by 119 tonnes year on year(3%) to 3,478 tonnes. This was the biggest year-on-year fall in the consultancy’s records going back to 2010 and was primarily the result of disruption caused by the COVID-19 pandemic. Temporary mine closures, as a result of national lockdowns and localised outbreaks of the virus, led to significantly lower output in several countries such as Peru, Canada and South Africa.

The Metals Focus country-by-country assessment for 2020 and 2019 gold production is set out below.  There will be arguments about some of the production figures and resultant rankings as other consultancies come up with their own assessments – notably whether Russia or Australia is in reality the world’s second largest gold producer (see: Australia continues to increase annual gold output in 2020).

Table:  Global Top 20 gold mining nations 2019/2020 (tonnes)

Rank

Country

2019 Output

2020 Output

%  Change

1

China

383

368

-2.9%

2

Russia

329

331

+0.5%

3

Australia

325

328

+0.8%

4

USA

200

190

-5.1%

5

Canada

183

171

-6.7%

6

Ghana

142

139

-2.6%

7

Brazil

100

107

       +6.5%

8

Mexico

109

102

--6.7%

9

Uzbekistan

95

102

+7.4%

10

Indonesia

92

101

+9.3%

11

South Africa

111

99

-10.9%

12

Peru

142

98

-31.8%

13

Mali

97

94

-3.1%

14

Burkina Faso

83

93

+12.4%

15

Sudan

78

84

+7.4%

16

Kazakhstan

75

78

+5.0%

17

DR Congo

63

61

-3.2%

18

Guinea

58

57

-1.4%

19

Colombia

45

54

+17.9%

20

Papua New Guinea

71

53

-25.3%

Others

           813

769

-5.4%

Total

3,597

3,478

-3.3%

Source: Metals Focus

2019 Figures adjusted for most up-to-date data

Some of last year’s assessed production falls and rises may generate some specific comment.  Notably for many years South Africa was very comfortably the world’s largest gold producer, but it has now fallen to 11th place as grades have reduced, mines have become ever deeper and many have shut down as no longer being economic.  2020 output was also adversely affected by pandemic-related lockdowns.

Central and South America recorded the largest regional fall in gold output and were it not for decent production increases in Brazil and Colombia the figures would have been much worse.  As it was Metals Focus records a regional fall in gold production of 68 tonnes year on year, primarily down to a massive fall of 44 tonnes in Peru's gold output.  Peru had been easily the region’s largest producer, but in 2020 fell behind both Brazil and Mexico.  Regional output is assessed as falling by around 12% in 2020.  Peru’s shortfall, from which it may see a recovery this year (despite the likely confirmation of a new President in Pedro Castillo who is not thought to be favourably disposed towards the mining sector) was largely due to COVID-related temporary shutdowns of some major and ASM (Artisanal and Small Scale Mining) operations.  Argentina also saw a substantial gold production fall due primarily to COVID-related temporary closures.

Australasia also recorded  an overall output fall but this was almost all entirely due to a substantial fall in Papua New Guinea due mainly to the shutdown of the big Porgera mine in a dispute between the government and the mine owners (Barrick and Zijin Mining).  A tentative settlement of the dispute has been arrived at with PNG receiving a bigger stake in the operation and Barrick is working to reopen the mine (which at peak can produce a little under 20 tonnes of gold annually) later this year. 

North American gold production also fell in 2020 – by around 30 tonnes (Metals Focus includes Mexico, which accounted for around 7 tonnes of this shortfall, in its North American figure).  Both Canada and the U.S. saw quite big falls – the former primarily due to COVID-related temporary mine closures and the latter principally because of declining gold grades in Nevada.  Asian gold production also fell, mostly because of the continuing small percentage decline at the world’s biggest producer – China.

Europe saw a small production rise, but the biggest regional increase was in the CIS countries with production increases in Russia, Kazakhstan and Uzbekistan, partially offset by a fall in Kyrgyzstan.

For the current year, Metals Focus sees a rebound in global gold production of around 6% to a new record of 3,693 tonnes, thus reversing the declines seen in the two prior years.  The rise will largely come about due to the vast majority of mines operating at full capacity again, plus some new mines coming on stream during the year.  ASM production will also likely increase due to higher gold prices and the easing of COVID-related restrictions in some countries.  We think, though, that this may be an overoptimistic forecast.  We do see a likely rise in global gold production, but quite possibly not by as much.

Re. the elusive peak gold scenario, while a serious lack of gold exploration has led to a reduction in major gold discoveries, the gold growth baton has to be taken up by the development of medium and small sized gold projects mostly in countries like Australia, Russia, Canada etc. and perhaps in central and south America and Africa (which remains comparatively unexplored and undeveloped.  There is a distinct lack of major new gold mining operations on the development horizon, and any which may yet be found could take upwards of 10 years to finance, permit and bring into production. 

All that the industry can hope for is that these small and medium sized new mine developments prove to be sufficient to stave off global production falls from declining grades and closures of existing gold mines, but we fear this will be a losing battle despite higher gold prices, which could help see some marginal operations stay afloat.  Global gold production therefore looks to have, at best, plateaued.  Annual world production may therefore remain stable, or rise or fall by a couple of percentage points for another couple of years.  Beyond that global gold output looks likely to be in continuing decline unless there is a major increase in the price of gold – and even then it may well come too late to stimulate any kind of significant global gold production.  That is what peak gold is really about!

21 Jun 2021 | Categories: Gold, Russia, US, Mining

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