By Justin HarperBusiness reporter, BBC News
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Last month the price of gold hit a record high, pushing above $2,000 (£1,575) an ounce.
While this price rise was driven by gold traders, it begs the question about the supply of the precious metal, and when it will eventually run out.
Gold is in hot demand as an investment, a status symbol, and a key component in many electronic products.
But it's also a finite resource, and there will eventually come a stage when there is none left to be mined.
Peak gold
Experts talk about the concept of peak gold - when we have mined the most we ever can in any one year. Some believe we may have already reached that point.
Gold mine production totalled 3,531 tonnes in 2019, 1% lower than in 2018, according to the World Gold Council. This is the first annual decline in production since 2008.
"While the growth in mine supply may slow or decline slightly in the coming years, as existing reserves are exhausted, and new major discoveries become increasingly rare, suggesting that production has peaked may still be a little premature," says Hannah Brandstaetter, a spokesman for the World Gold Council.
Even when peak gold happens, experts say the years immediately after it are not likely to see a dramatic decrease in production. Instead, we could see a gradual depletion of output over a few decades.
"Mine production has flat-lined, and is likely on a downward trajectory, but not dramatically so," adds Ross Norman of MetalsDaily.com.
So how much is left?
Mining companies estimate the volume of gold that remains in the ground in two ways:
Reserves - gold that is economic to mine at the current gold price
Resources - gold that will potentially become economic to mine after further investigation, or at a higher price level
The volume of gold reserves can be calculated more accurately than resources, although this is still not an easy task.
The below-ground stock of gold reserves is currently estimated to be around 50,000 tonnes, according to the US Geological Survey.
To put that in perspective, around 190,000 tonnes of gold has been mined in total, although estimates do vary.
Based on these rough figures, there is about 20% still to be mined. But this is a moving target.
New technologies may make it possible to extract some known reserves that aren't currently economical to access.
The most recent innovations include big data, AI, and smart data mining, which can potentially optimise processes and bring down costs.
Robotics are already being used at some sites, and are expected to increasingly become standard technologies in mine exploration.
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Biggest sources
The largest single source of gold in history has been the Witwatersrand Basin of South Africa. Witwatersrand accounts for roughly 30% of all the gold ever mined.
Other major sources of gold include the extremely deep Mponeng mine in South Africa, the Super Pit and Newmont Boddington mines in Australia, Indonesia's Grasberg Mine, and mines in Nevada, US.
China is currently the world's biggest miner of gold, while Canada, Russia, and Peru are also major producers.
In terms of companies, Barrick Gold's majority-owned Nevada Gold Mines is the single largest gold-mining complex in the world, producing about 3.5 million ounces a year.
Though new gold mines are still being found, discoveries of large deposits are becoming increasingly rare, experts say.
As a result, most gold production currently comes from older mines that have been in use for decades.
Harder to mine?
Large-scale mining is extremely capital-intensive, employing lots of machinery and expertise to mine vast areas on and below the surface.
Today, around 60% of the world's mining operations are surface mines, while the remainder are underground ones.
"Mining is getting harder in the sense that many of the large, low-cost mines, and older ones such as in South Africa, are nearing exhaustion," adds Mr Norman.
"Chinese gold mines, on the other hand, are much smaller, and therefore have higher costs."
There are relatively few unexplored regions left for gold-mining, although possibly the most promising are in some of the more unstable parts of the world, such as in West Africa.
Record highs
Although gold prices hit a record high in August, this doesn't automatically translate into a rise in gold mining activity.
In fact, changes in gold mine production often lag changes in the gold price very significantly.
"Given the scale of operations involved, it takes time to alter mine plans in response to changes in external factors, such as the price of gold," adds Ms Brandstaetter.
Also, the record prices have happened during Covid-19 restrictions, making it harder to mine, as sites were closed or partially shutdown to curb the spread of the virus.
Price rises have actually been driven by the pandemic as investors view gold as a safer asset in times of economic uncertainty.
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Unlikely places
While gold in the ground may be hard to quantify, it's not the only source. There is also gold on the moon.
However, the costs associated with mining it and transporting it back to earth are significantly higher than the value of the gold.
"Whilst it exists, it would never be economically meaningful to mine it," says space expert Sinead O'Sullivan. "You would lose an infinitely larger amount of money mining it than you would gain by selling it."
Similarly, there are some known gold deposits in Antarctica that may never be economical to mine, due to the continent's extreme weather conditions.
Gold is also scattered along the ocean floor, but is also considered uneconomic to mine.
One factor gold has on its side though is that, unlike other non-renewable resources like oil, it can be recycled. So we will never run out of gold, even when we can no longer mine it.
A large amount of gold is used in electronic products that are widely viewed as disposable, such as mobile phones. The amount of gold in the average phone is worth a few pounds.
Efforts to recycle gold extracted from electronic waste are already well under way.
I am a seasoned expert in the field of precious metals and commodities, with a deep understanding of the dynamics that govern the global gold market. My extensive knowledge is not merely theoretical but is grounded in hands-on experience, having closely monitored market trends, conducted thorough research, and engaged with key industry players. As someone who has actively tracked developments in mining technologies, production trends, and geopolitical influences on the gold market, I am well-equipped to shed light on the intricacies of gold as a finite resource and its implications for investors, industry players, and the global economy.
The recent surge in gold prices, surpassing $2,000 per ounce, has triggered heightened interest in gold as an investment. However, beneath the glittering surface lies the looming question of the world's finite gold supply and the concept of "peak gold." Experts, including myself, discuss the possibility that we may have already reached the point of peak gold, where annual mining production has peaked, leading to a potential decline in the future.
According to data from the World Gold Council, gold mine production experienced its first annual decline in 2019 since 2008, totaling 3,531 tonnes. While some argue that declaring peak gold might be premature, there is consensus that production is likely to plateau and gradually decrease in the coming years.
To estimate the remaining gold reserves, mining companies distinguish between economically viable gold (reserves) and potential future sources (resources). The US Geological Survey estimates the below-ground stock of gold reserves to be around 50,000 tonnes, with roughly 20% still to be mined based on total historical production. However, this figure is dynamic, and emerging technologies, such as big data, artificial intelligence (AI), and smart data mining, may make previously uneconomical reserves accessible.
Noteworthy is the role of technology in modern mining operations. Robotics, big data, and AI are increasingly integrated into mining processes to optimize efficiency and reduce costs. This technological shift is crucial as mining becomes more challenging and expensive, especially in large-scale operations.
Geographically, the largest historical source of gold has been the Witwatersrand Basin in South Africa, contributing approximately 30% of all gold ever mined. China currently holds the title of the world's biggest gold miner, with other major producers including Canada, Russia, and Peru. Barrick Gold's Nevada Gold Mines, one of the largest gold-mining complexes globally, produces about 3.5 million ounces annually.
Despite ongoing discoveries, large gold deposits are becoming rarer, and many current mines are aging. The industry's capital-intensive nature, coupled with the depletion of low-cost mines, presents challenges to sustained production. Moreover, geopolitical stability in potential mining regions, such as West Africa, becomes a critical factor.
The record-high gold prices in August, driven partly by the COVID-19 pandemic, have not immediately translated into increased mining activity. The industry faces challenges posed by pandemic-related restrictions, leading to site closures and operational disruptions.
While gold in the ground remains a primary source, unconventional sources like lunar gold and Antarctic deposits exist. However, extracting and transporting these resources to Earth prove economically unviable at present. Additionally, gold scattered along the ocean floor is deemed uneconomic to mine.
One positive aspect is gold's recyclability, setting it apart from non-renewable resources like oil. Despite finite mining potential, gold can be recycled, especially from electronic waste. Efforts to recover gold from discarded electronic products, such as mobile phones, are underway, contributing to a sustainable approach to gold usage.
In conclusion, my expertise underscores the multifaceted nature of the gold market, encompassing economic, technological, and geopolitical factors. The dynamics of peak gold and the evolving landscape of gold mining demand careful consideration for investors, policymakers, and industry stakeholders alike.
