As I have explained in my previous post on the world gold production, the share of major gold producing countries in the world gold production decreases. But what about the production of large gold mines?
As shown in the chart below, the world gold production has decreased since 2001 (black line). Similarly the gold production of the thirteen largest gold mines in the world (orange line) has decreased since 2006. This time shift can be explained by the tender offers that major gold mines have made on many gold mines in the world. In this way they were able to increase their production temporarly but this does not change the fact that the world gold production is out of breath.
Here are some of the main takeover of major gold mines since 1999: Great Central Mining, Echo Bay (Canada), Normandy (Australia), Hommestake (oldest gold mine in the United States which survived the great depression in 1929), Placer Dome (Canada, founded in the early 19th century), Ashanti (South Africa, producing gold since 1897), Glamis Gold (Canada), Sino Gold (Australia), Lihir gold (Australia).
Despite these major takeover bids for tens of billions of dollars, the share of large gold mines in the world gold production has declined since 2008. It decreased from 47% in 2007 to 44.5% in 2010. The increase in the world gold production observed since 2008 is the result of smaller gold mine productions (gold mines producing less than 500,000 ounces of gold per year).
In summary, the growth of world gold production since 2008 arises from a mosaic of small producers. This "atomization" of the world gold production into less rational small productions requires a high gold price. Smaller producer countries and small gold mines save therefore the world gold production in the short term (1-3 years). However this is not enough to revive a global production which is still below its level of 2001 even despites 10 years of gold price increases.
The takeover of the largest gold mine in the world on a major copper producer in Zambia is symptomatic of the situation of the major gold mines. The large scale gold deposits are increasingly rare and large gold mines are forced to produce more and more copper, zinc, lead, silver, molybdenum or uranium.
Dr Thomas Chaize