Make Kitco Your Homepage

Gold supply to stabilize after peaking in 2024 as lower recycling activity will offset higher mine production

Kitco News

Editor note Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here!

(Kitco News) - In its recent report, the Department of Industry, Science, Energy and Resources of the Government of Australia (DISER) said that the global gold supply increased by 0.8% year-on-year to 1,174 tonnes in the March quarter 2023, driven by both higher mine production and recycling.

According to the report, global mine production rose by 1.5% year-on-year to a record high of 856 tonnes in the March quarter of 2023, driven by increased production from the major producers and ramp-up of new projects in Mongolia and Brazil.

Production in China, the world’s largest gold producing country, rose by 1.9% year-on-year to 85 tonnes in the March quarter 2023, with the year-on-year improvement the result of fewer weather- and COVID-related disruptions.

DISER said that in Australia, the third-largest gold producing country, output decreased by 2.6% year-on-year in the March quarter 2023, to 71 tonnes. Australian mine production decreased due to disruptions from heavy rainfall over the quarter.

Production from Indonesia, the sixth-largest gold producing country, decreased by 19% year-on-year in the March quarter 2023, due to flooding and lower grades at its large Grasberg copper-gold mine.

DISER added that gold recycling in the March quarter rose to 310 tonnes, the highest March quarter in 7 years, in response to stronger gold prices. Recycling growth was strong in India (up by 25% year-on-year), a particularly price-sensitive market.

Looking ahead, the department said that global gold supply is forecast to stabilize at around 4,800 tonnes in the period to 2025, with increasing world gold mine production offset by decreasing recycling activity.

“World gold mine production is forecast to rise by 1.0% a year on average by 2025 to 3,760 tonnes, led by increases in Canada, Chile and Brazil,” the authors of the report predict.

Gold production increases will be particularly large in Canada, with the 11 tonnes per year Côté project and the 10 tonnes per year Blackwater project commencing operations in the next two years.

However, DISER noted that continued environmental regulations and industry consolidation in China will see production fall over the medium-term.

According to the report, partially offsetting increases in mine production, gold recycling activity is forecast to decline on average by 3.8% a year by 2025, due to lower forecast gold prices.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.