A Newmont Mining executive, Omar Jabara, recently stated, “It’s a fact that gold production from mines has been in decline since 2001 and has gone roughly from 85 million ounces to about 75 million ounces a year.” Vincent Borg, spokesman for No. 1 producer Barrick Gold added, “It sort of goes down about 1 million ounces every year and our forecast is that it will continue to decline despite the higher price” for gold nowadays.
Almost everywhere, mineral deposits are being exhausted and new deposits are not being found fast enough to replace them, these experts explain. South Africa, which was once at the vanguard of world production, saw a 9.3-percent drop in production year over year in the second quarter, according to its Chamber of Mines.Globally, “it’s just that the assets are not there anymore,” Tonya Todd, a spokeswoman for Goldcorp, Canada’s second biggest gold mining firm.
“Just because gold reached a new high today doesn’t mean we can send a message to our 26 mines saying produce as much gold as you can today because they are already,” said Borg. “It’s not like a water tap you can turn on and it comes right away.”
The bottom line is reduced supply and increased investor demand means higher prices.