Global gold demand showing positive growth based on increased consumer demand in China

The report contains an overview of the global gold mining industry together with the key growth factors and restraints affecting the industry.

Amidst economic meltdowns, especially the drop in commodity prices and lower revenues, gold, silver and copper are some of the most watched metals in the mining sector. In 2013, the global gold mine production was 2804 metric tons which had increased 4% from 2012. The major contributing regions were China, US, Australia, South Africa, Russia, Indonesia, Kazakhstan, Papua New Guinea, Uzbekistan, Mali, Colombia, Argentina, Brazil, Ghana, Canada, and Chile. Together these countries produced approximately a little over 70% of the world’s annual gold mine production.

This report, Global Gold Mining to 2020 contains an overview of the global gold mining industry together with the key growth factors and restraints affecting it. Further, it provides information about reserves, production, prices, competitive landscape and major active, exploration and development projects.

Market trends and how gold grade affects market growth

Gold deposits all over the world are mostly dependent on two major factors- size and grade. Without a sizeable ore, the mining operation fails to acquire the scale that will be able to bring down the cost of production. Similarly, the project without grade lacks the margin for each ton of ore processed to justify production. There is significant implication on future gold production, especially when gold prices are at a three-year low. Unless major discoveries of ore are made, gold production must decrease, or the market price may rise to make the projects more economical. Currently, there are only 8.8% projects globally that are more than 5 million oz and have an average grade of higher than 3 g/t Au. Of these, there are only 21, which are yet to venture into production. Keeping all these factors in mind, the gold mining market is gearing up for challenging times ahead.

China officially crowned as the largest consumer market

China overtook India’s position as the world’s largest consumer market, reaching 1066 tons at 32% in 2013. This is most gold ever demanded annually by any country’s consumers in bars, jewelry and coins. China had displaced South Africa as the world’s largest producer in 2007, mining about 437 tons in 2013. China also imported 1108 metric tons of gold in 2013, 33% more than 2012. With the expansion in the number businesses selling gold, both at investments and jewelry level, wholesalers and fabricators in manufacturing zones are particularly interesting. If over-the-counter flows are included, the Chinese gold consumer market has circulated close to 1400 tons of gold, far exceeding official estimates of 1066 tons.

Furthermore, with the grade of current producing gold mines being 32.6% higher than undeveloped deposits, it makes the supply scenario even clearer. The current yearly mine supply may be difficult to sustain, but the future mines will meet with challenges especially by grade and margins, to be economical at today’s prices.

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