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Mining 101: G is for gold. Where in the world to look for the precious metal

Published 01/11/2023, 11:56
Updated 01/11/2023, 12:41
© Reuters Mining 101: G is for gold. Where in the world to look for the precious metal

Proactive Investors - This article delves into the top 10 countries dominating the global gold mining industry, providing some general observations along with the World Gold Council's estimates for annual output last year. Also, we asked AI to look at the CIA World Factbook to assess how politically stable a particular jurisdiction is. This is the sort of information would-be investors need to factor into their calculations of value.

1. China (2022 output: 375 tonnes)

China is the world's largest gold producer, operating many state-owned mines located mainly in the eastern provinces of Shandong, Henan, Fujian and Liaoning. Gold production expanded rapidly since the 1990s, leading to environmental concerns. Stricter regulations have aimed to curb pollution from mines. The China National Gold Group Corporation (SS:600916) is the largest state-run mining company.

What the CIA World Factbook says: The Chinese Communist Party's authority is enshrined in China's constitution. Political stability is maintained by authoritarian rule that concentrates power in the CCP. Protests are forcibly suppressed.

2. Russia (324.7 tonnes)

Russia also has substantial gold reserves and output is dominated by large firms including Polyus, Petropavlovsk, and Highland Gold Mining. Over 60% of production comes from just six federal subjects in the eastern part of the country. Stricter regulatory changes in 2014 aimed to increase state control over the industry. Illegal mining remains an issue.

What the CIA World Factbook says: Political decision-making is centralized and dominated by President Putin through suppression of opposition and state control over media. Elections are carefully managed.

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3. Australia (313.9 tonnes)

Australia has some of the world's largest gold reserves and has benefitted from technological advances like heap leaching to extract gold from lower-grade ores. Major deposits are located in Western Australia, Queensland and other regions. Larger mining companies dominate production but smaller miners also operate. Environmental issues have been raised regarding some mines.

What the CIA World Factbook says: Australia has a stable liberal democratic political system with strong institutions. Elections are free and fair.

4. United States (172.7 tonnes)

The US has historically been a major global gold producer but stricter regulations have limited growth since the 1990s. Nevada produces over 75% of gold mainly from large open pit mines. Other major production occurs in Alaska, Utah, and Colorado. Environmental concerns have been raised about some mines using cyanide heap leaching techniques. What the CIA World Factbook says: The US has a stable, well-established democratic system and rule of law. Elections are free and fair.

5. Canada (194.5 tonnes)

Canada's gold industry centers on the provinces of Ontario and Quebec which together account for over 75% of output. Major companies include Barrick Gold (LON:0R22), Kinross Gold (NYSE:KGC), and Agnico Eagle Mines (NYSE:AEM). Mines tend to be lower grade than elsewhere, leading to high production costs. Tighter regulations have improved the industry's environmental record in recent decades.

What the CIA World Factbook says: Canada has a free and democratic parliamentary democracy with strong civil liberties. Elections are considered free and fair.

6. Peru (125.7 tonnes)

Peru's gold production comes largely from multinational corporations like Newmont Mining (NYSE:NEM) and Barrick Gold operating large open-pit mines in the northern half of the country. Illegal and informal mining remains widespread, causing environmental damage from mercury usage. Conflicts have arisen between legal large-scale mines and local communities over water use and pollution.

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What the CIA World Factbook says: Political infighting and corruption undermine democratic governance. Social unrest continues in mining regions. Elections are sometimes disputed.

7. Ghana (127 tonnes)

Ghana's gold mining industry accounts for over 90% of its mineral production and plays a major role in the economy. Most mines are located in the southwest of the country. Regulations are often debated regarding environmental issues, illegal mining, and royalty payments to local communities. Major companies include AngloGold Ashanti (NYSE:AU), Newmont, and Gold Fields (NYSE:GFI).

What the CIA World Factbook says: Ghana has a stable democratic political system. However, corruption issues periodically arise.

8. South Africa (92.6 tonnes)

South Africa was previously the world's #1 gold producer for many years but reserves have declined dramatically amid depleting deposits. Output comes mainly as a by-product of large low-grade ore mines in the Witwatersrand Basin. High costs have led companies to close some mines in recent years. Stricter safety regulations have also impacted production.

What the CIA World Factbook says: Divisive politics, corruption, and economic inequality continue to undermine stability and social cohesion.

9. Mali (101.7 tonnes)

Mali's rapidly rising gold production may soon challenge Ghana as sub-Saharan Africa's top producer. Most industrial mining is done by multinationals like Barrick Gold and AngloGold Ashanti around established deposits like Morila, Syama, and Loulo. Artisanal mining by individuals using basic tools accounts for about a quarter of output. Mining drives much of Mali's economy.

What the CIA World Factbook says: Political instability persists due to ethnic tensions, disputed elections, military coups, and extremism. The north remains unstable.

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10. Indonesia (124.9 tonnes)

Indonesia's main gold mining operations are located on the islands of Sumatra and Papua. The Grasberg mine operated by Freeport McMoRan (NYSE:FCX) is one of the world's largest gold and copper mines. The Batu Hijau mine on Sumbawa island is another major operation. Environmentalists have raised concerns about the impacts of Indonesia's large-scale mines.

What the CIA World Factbook says: Democratic reforms are consolidating after decades of authoritarian rule, but governance issues persist. Separatist and sectarian conflict continues.

Read more on Proactive Investors UK


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