Australia’s production was 320 metric tons, representing 10% of the global share, while Russia ranks third at 9.4% or 300 metric tons. The three countries cumulatively represent 31% of all the gold mine production in 2020. In total, 3,200 metric tons of gold were produced last year globally. Furthermore, Australia ranks top as the country with the highest gold reserves at an estimated 10,000 metric tons, followed by Russia at 7,500 metric tons. The United States ranks a distant third at 3,000 metric tons in gold reserves. The amount of the remaining gold reserves varies as it might reduce due to increased mining or rise as more mining ores are discovered. The numbers are based on the data provided by the United States Geological Survey (USGS).
The pandemic hampers 2020 gold mining operations
The 2020 global gold mine production faced unprecedented challenges caused by the coronavirus pandemic. Most gold mining operations were suspended after securities imposed wide-scale lockdowns. However, once lockdown measures were eased towards the third quarter, production resumed in most countries. China’s margin with second-placed Australia is not big, but the Asian country tops the list potentially due to its pandemic’s handling. The country successfully managed to control the health crisis giving the green light to the resumption of economic activities, including gold mining. The production was also motivated by the country’s high demand for gold through by-products like jewelry and ornaments. The high production comes in the backdrop of the Chinese gold mining industry receiving increased foreign and domestic investment. Worth noting is that China managed to remain in the pole position despite the heavy and tighter environmental policies imposed by the national government. Political factors are also a driver of 2020 gold production. For China, the country appears to have put aside the trade tension with the United States to rank top since most of the precious metal is consumed locally. Elsewhere, Russia’s share is also highly fuelled by the increasing possibility of more sanctions from the U.S. The sanctions mean that state banks are at risk of being frozen out of dealing in U.S. dollar-denominated assets. Despite the pandemic, financial market events partly inspired production after gold as an asset hit a new all-time high by trading above $2,000 in August. The record price offered a window for increased profits for production companies fuelling mining activity. There was also interest in gold as investors were looking for an alternative source of wealth following the 2020 Q1 stock market crash.
Questions on sustainability of gold reserves
Elsewhere, estimations indicate that countries like Australia and Russia potentially have significant gold reserves but the figure might drastically change. There is a possibility of the reserves reducing further due to increased mining. At the same time, the reserves will potentially rise as more mining ores are discovered. Despite the expected variations, industry players are still concerned on what will happen in the event current reserves are fully exhausted. Although the possibility of mining all gold in the near future is rare, the precious metals’ production will likely keep decreasing. Featured Image via Newmont Mining Corporation
