Global gold production to grow 5.5% this year, forecasts GlobalData

Gold production is expected to increase by 5.5% to 113.9-million ounces this year, forecastsdata and analytics company GlobalData.

It further expects gold production to grow at a compound annual growth rate of 2.9% to 2024, when production will reach 124.1-million ounces.

Canada, Indonesia, Peru, and the US will be the key contributors to this growth, withcombined production in these countriesexpected to recover from an about 20.1-million ounces this year to 25.3-million ounces in 2024, says GlobalData associate project managerVinneth Bajaj.

Key projects that are expected to start operations during the forecast period to 2024include the Turquoise Ridge underground expansion project, in the US, which is currently underconstruction. The project is expected to be commissioned in late 2022 and will produce about 500 000 oz/y.

The Salares Norte project. in Chile, which is wholly owned by Gold Fields, is alsounder construction. With gold production capacity of 450 000 oz/y and a development capital expenditure of about $860-million, the project is expected to commence operations in 2023, Bajaj points out.

Meanwhile, global gold production declined by 5.2% to 108-million ounces in 2019 and was adversely affected by the Covid-19 pandemic disruptions in 2020.

The greatest impact on gold production was observed during the first half of 2020, when six of the top ten gold producers reported a collective 8.4% year-on-year decrease in their output. Barrick Gold’s output decreased by 12.3%, Newcrest’s by 15%and Agnico Eagle’s by 8.4%.

Several gold mines were forced to suspend operations temporarily owingto the pandemic. These includedBarricks Veladero, Pueblo Viejo and Porgera mines and Agnicos Nunavut, Quebec and Mexicomining operations.

The pandemic also had a significant impact on African gold operations, mainly during the second quarter of 2020. 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% in 2020.

Decreases in output arealso expected forGuyana (15.9%), Ghana (7.5%) and Mali (5.6%).

In Indonesia, production is expected to have declined by 28.9%, owing to the transition of the Grasberg openpit mine, the countrys largest producer of gold. China, after reporting an all-time high of 16.7-million ounces of gold production in 2014, has been on a downtrend ever since, as a consequence of policy changes and depleting ore reserves. The pandemic struck the countrys output hard during the first quarter of 2020and gold production is estimated to have declined by 7% to 12.4-million ounces in 2020, saysBajaj.

Major contributors offsetting the declines were Kirkland Gold (48%), owing to the acquisition of the Detour Lake project by Detour Gold in January 2020and Zijin (5.9%).

Unlike other key producers, Australian gold miners remained largely unaffected by the pandemic, as stringent measures were adopted by the government to contain the outbreak, enabling minimal disruptions to mining activities. State governments, including those of Western Australia, South Australia, Tasmania and the Northern Territory, began to close their borders from late March, with certain exceptions for essential service workers. Gold production in Australia is expected to have grown by 4.3% in 2020, reaching 12-million ounces.