Editor’s Note
This article outlines the basic methods of gold extraction and highlights how responsible mining practices can drive economic development through job creation and foreign investment.
Gold mining involves extracting gold through various methods such as sandstone and hard rock mining. The gold concentration process occurs both above and below the Earth’s surface. On the surface, alluvial gold is concentrated by the action of flowing water, typically rivers.
Transparent, well-managed, and responsible resource extraction can significantly contribute to economic growth by creating jobs and business opportunities for local communities. Furthermore, gold mining brings foreign direct investment, foreign exchange, and tax revenue to countries through direct and indirect employment. Therefore, the use of gold across various industries drives the growth of gold mining. According to the World Gold Council, India and China are the world’s two largest gold consumers, and the post-pandemic economic revival in China and India is one of the major factors for increased gold demand.
The depth and temperature of deep gold mining pose risks and hazards that require continuous commitment and adherence to safety standards and procedures. Additionally, working conditions in some underground mines can be difficult due to high temperatures and humidity levels, further reducing productivity. Moreover, mining costs are exceptionally high, hindering market growth. According to the World Gold Council, the average cost of gold mining in 2021 was USD 1,129 per ounce.
The outbreak of the COVID-19 pandemic and the subsequent central bank responses had multiple impacts on the gold mining industry. Company operations were affected by isolated outbreaks and government-mandated shutdowns. Furthermore, demand for many commodities remained low, with near-term demand being lower. The pandemic’s impact on the mining sector remains uncertain, with the crisis affecting demand for commodities, supply chains, and business models. Meanwhile, energy prices and currencies declined in some gold-mining countries, leading to increased profit margins for gold miners.
The report includes the following key findings:
• Latest developments in gold mining
• Key industry trends
• Regulatory landscape of the gold mining market
• Impact of COVID-19 on the market
By Mining Method
• Surface Mining
• Underground Mining
By Grade
• Low
• Average
• High
By Geography
• North America (U.S. and Canada)
• Europe (U.K., Germany, France, Italy, Spain, Russia, and Rest of Europe)
• Asia Pacific (China, India, Japan, Australia, Southeast Asia, and Rest of Asia Pacific)
• Latin America (Brazil, Mexico, and Rest of Latin America)
• Middle East & Africa (GCC, South Africa, and Rest of Middle East & Africa)
Based on mining method, the market has been segmented into open-pit and underground mining. Open-pit mining or open-cast mining is a surface mining technique where minerals are extracted from an open pit. Open-pit mining is the most common method for mineral extraction globally and does not require mining methods or tunnels. This surface mining technique is used when mineral resources or ore deposits are relatively close to the surface. When open-pit mines produce construction materials and dimension stone, they are sometimes referred to as “quarries.” It is commonly used to collect crushed stone, sand, rock, phosphate, aluminum, gold, and coal.
Furthermore, underground mining is another method/process in the mining industry, typically used to extract mining ores and materials located deep beneath surface mining. Primarily, expensive metals such as gold, iron ore, and limestone are extracted from underground mining. Based on these factors, the underground mining segment may grow during the forecast period.
The World Gold Council defines 0-5 grams per tonne as low-grade gold, 5-8 grams as average grade, while high-grade mines have a density of 8.0 to 10.0 g/t. Low-grade gold is typically found in open-pit mining and dominates the market. Furthermore, according to industry research, average-grade gold is expected to grow in 2023, while high-grade gold will also increase in 2023. As the average grade of ore bodies declines, mining costs continue to impact mine life.
According to the g/t standard, some of the world’s high-grade gold mines are located in the United States, Russia, and Peru. For example, the Fire Creek Mine in Battle Mountain, Nevada, reported one of the highest values at 44.1 g/t. The list also includes Canada’s Macassa Mine, Russia’s Kedrovka Mine, and Indonesia’s Toguraci Mine.
The grade of mined gold is just one of many factors affecting a mine’s profitability. In addition to the composition and depth of the ore, labor costs, technology investment, and management factors need to be considered. Furthermore, mines are subject to numerous national and political influences.
The global gold mining market has been divided into five key regions: North America, Latin America, Asia Pacific, Europe, and the Middle East & Africa.
Asia Pacific is the leading region for the gold mining market. China’s gold demand rebounded strongly in 2023 as central banks and retail consumers turned to safe havens. According to the China Gold Association, the country’s gold consumption rose by 8.78% in 2023 to 1,089.69 tonnes. Compared to the concentrated supply from the Middle East and Africa, gold resources are increasingly geographically diverse.
Furthermore, due to high prices, U.S. gold production declined significantly in 2021, and heap leaching was used to recover gold from low-grade disseminated deposits in Nevada and other states. According to the World Gold Council, in 2021, the U.S. produced 180 tonnes of gold worth approximately USD 10 billion from 12 states, a 7% decrease from its 2020 production, making it the fifth-largest gold-producing country. In contrast, Russia is becoming a key gold producer in Europe. Russia currently ranks first in the world in terms of gold reserves, with a share of about 13%, while in production, it holds the third position with a share of about 9%.
The report includes the profiles of key players such as Barrick Gold Corporation, Newmont Mining Corporation, AngloGold Ashanti Ltd, Goldcorp Inc., Kinross Gold Corporation, Newcrest Mining Ltd, Gold Fields Ltd, Polyus Gold International Ltd, Agnico Eagle Mines Ltd, Golden Star Resources, Coeur Mining, Freeport-McMoRan, Royal Gold, and Novagold Resources.
• In May 2023, the world’s largest gold miner, Newmont Mining Corporation, acquired Australian rival Newcrest Mining Ltd. for USD 19.2 billion in the industry’s largest deal. Under the terms, Newcrest shareholders will receive 0.4 Newmont shares for each Newcrest share, plus a special dividend of USD 1.10 per share, which Newcrest will pay through an Australian arrangement in the transaction.
• In January 2022, Golden Star Resources Ltd. was acquired by a company named Chifeng Jilong Gold Mining Co., Ltd and its subsidiary Chijin International (Hong Kong) Limited, along with Chijin’s assignee Kefei Investment (BVI) Limited, for USD 470 million in cash.
The global gold mining market is projected to reach USD 765.85 billion by 2034, with a CAGR of 11.19% during the 2026-2034 forecast period.