Gold Output To Hit Record High In 2019: S&P Global Market Intelligence
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During 2018, world output increased for the 10th consecutive year to 107.3 million ounces. The year-on-year rise was just under 1%, the smallest in the last decade, but output has risen by 40% since 2008, the firm said.
"We believe the forecast growth of 2.3 million ounces in 2019 will be the strongest growth in the past three years, debunking commentary calling for peak gold,” said Christopher Galbraith, research analyst at S&P Global Market Intelligence. “More than half of the increase is projected to come from new mines that are expected to come on stream this year or have recently commissioned.
"Looking at the current project pipeline, we expect output to stay steady until 2022 due to advancements at developing projects.”
However, starting then, gold production is expected to fall by over 3 million ounces in 2023 and up to 5 million in 2024, Galbraith said.
The report showed that the weighted-average gold grade increased by 4.5% from 2014 to 2018, in part because producers minimized output from low-grade areas during a time of weaker prices as companies tried to remain profitable.
“Save for a subtle drop in 2018, the increase in grade is projected to continue through 2020 and maintain higher-than-current levels in the subsequent years,” Galbraith said. “In 2021 we expect ore throughput to remain steady but grade to fall by 2% year-over-year.
“These two factors are expected to account for around 1.6 million ounces in reduced production. By 2024, around 241 million tonnes less ore is expected to be fed at gold mills compared to 2019, while the gold grade will be almost 2% higher. Owing to that drop in throughput, the related drop in production from primary gold mines will be almost 9 million ounces.”
As gold production falls, a larger share of output will come from mining of the yellow metal from base-metals mines, S&P added.
Canadian Gold Output To Rise In Future Years
While global output will start contracting in future years, Canada will be the only major gold-producing country to increase output, the study said. Meanwhile, Australian production is expected to fall the most of any major producing nation, S&P Global Market Intelligence reported.
Several Canadian mines -- including Agnico Eagle Mines Ltd.'s Meliadine and New Gold Inc.'s Rainy River -- are driving growth in national output that is expected to last for a few years, the firm said. S&P Global Market Intelligence projected that Canada will surpass the U.S. in gold production in 2019 to become the world's fourth-largest producer. Few Canadian gold mines face depletion, and the country's output is expected to increase by four times the second-largest increase, by Ecuador, over the next five years, S&P said.
Ecuador's projected increases come from a handful of new projects, including Lundin Gold Inc.'s Fruta del Norte and INV Metals Inc.'s Loma Larga.
Meanwhile, S&P Global Market Intelligence forecast that Australian gold production to slip to fourth place globally in 2024 due to depletion of several long-lived assets, including St. Ives, Paddington, Telfer, Edna May, Southern Cross and Agnew/Lawlers. Peru's production is also seen trending downward over the next five years, with Orcopampa, La Zanja and Tambomayo facing depletion before 2024. With closure only a few years further out, Lagunas Norte and Yanacocha will also be producing far less gold in 2024 than they have historically, S&P added.
Of the 99 countries with gold production in 2018 or that will have production in 2024, S&P said 49 are expected to produce less, 27 to produce more and 23 are expected to maintain production.