How Much is Left?

With gold having been in use since the dawn of history and new mining still occurring, it may seem strange to think of a day when there is no more gold to be extracted from the ground. Nevertheless, like any other limited natural resource, there is a finite supply of gold in the world.

At some point, the world’s supply of new gold will run out. The only question is how far away that day is.

Here are some interesting facts about the global gold supply and when we may run out.

Current Major Sources of Gold

To understand exactly how much gold is in the world and when we may run out, a good first step is to look at current sources and production of gold.

The largest single source of gold in history has been the Witwatersrand Basin of South Africa. This geologic formation is believed to be the result of an ancient meteorite and has produced over 1.5 billion troy ounces of gold since it was discovered in 1886. Witwatersrand accounts for roughly 50 percent of the gold ever mined. The formation, however, has seen declining production since the 1970s. Recently, the total gold output of South Africa, almost all of which comes from Witwatersrand, has dropped below 170 tons per year.

Other major sources of gold include the extremely deep Mponeng mine in China, the Super Pit and Newmont Boddington mines in Australia, Indonesia’s Grasberg Mine, and the mines along the Carlin Unconformity in Nevada, USA. Canada, Russia, and Peru are also major producers of gold.

Between all of the gold sources in the world, current estimates suggest that roughly 2,500 to 3,000 tons of new gold is mined each year. At present, experts believe that the total amount of above ground gold in the world stands at just over 190,000 tons.

Are There Still Untapped Sources of Gold?

Over the past two decades, new gold discoveries have slowed down considerably. Throughout the second half of the 20th century, discoveries of new veins with estimated deposits of 10 million troy ounces or more were quite common.

Though new gold veins are still being found, discoveries of large deposits are becoming increasingly rare. As a result, most gold production today is coming from older mines that have already been exploited for decades. In part, this is due to decreasing investment in discovery on the part of mining companies, though a larger factor is the fact that there may not be many large, undiscovered veins left in the world.

It’s also important to remember that the total amount of gold in the Earth’s crust and the total amount that can be feasibly mined are not the same. There are almost certainly massive gold deposits deep beneath the surface of the Earth that are too far down to be detected, let alone extracted.

Similarly, there are some known gold deposits in Antarctica that may never be economical to mine due to the continent’s extreme weather conditions and the challenges presented by thick ice layers.

There is also a considerable amount of gold that cannot be collected profitably scattered throughout the world’s oceans. Much of these underwater deposits are contained within the ocean floor and floating as tiny particles in the seawater itself.

Modeling the Decline of Gold Production

Because no absolute estimate of how much gold is left to be mined in the world exists, it’s impossible to know exactly how long current reserves will last. There are, however, some ways to estimate the timeline along which gold production could decline.

One primary concept in this effort is known as “peak gold.” Peak gold is defined as the point at which global gold production reaches its highest historical point. There are debates as to when peak gold will actually occur, but most estimates place it within the next decade. Some people think we have already surpassed this point. After peak gold is reached, the global output of gold will gradually decline until all deposits that are economical to exploit have been extracted.

Although the years immediately following peak gold likely won’t see a dramatic decrease in production, the depletion of major mine sites could cause output to drop drastically within a few decades. At present extraction rates, some analysts believe that South Africa, which is one of the largest gold producers in the world, could run out of accessible gold within 40 years.

How Long Before Gold Runs Out and What Happens Then?

Based on known reserves, estimates suggest that gold mining could reach the point of being economically unsustainable by 2050, though new vein discoveries will likely push that date back somewhat. New technologies may also make it possible to extract some known reserves that aren’t currently economical to access, but it is unlikely that large-scale gold mining will continue past 2075 without either huge mining technology advances or the discovery of currently unknown massive gold deposits.

One factor gold has going for it, compared to other non-renewable resources like oil, is that can be recycled. In other words, “running out of gold” isn’t really an adequate description of what happens when gold mines stop producing. Rather, the gold industry will transition from mining to recycling, allowing the global gold supply to be recirculated.

Thanks to the large amount of gold used in electronics that are widely viewed as disposable, efforts to recycle gold extracted from electronic waste are already well under way. Recycling will have to become considerably more efficient to meet the needs of the global gold market, as a huge amount of gold still ends up in landfills each year.

One aspect of the depletion of gold mines that is very difficult to predict is how it will affect the spot price of gold. If demand continues to rise while available supply stagnates, basic economic theory of supply and demand would suggest that prices will rise substantially in the future.

Fortunately, gold hasn’t run out yet and is widely considered a wise investment option for any investor. Buy gold today at Provident Metals while you still can.