The Coming Collapse Of The Global Gold Mining Industry

gold

In its recent presentation on the future of gold prices, miner Barrick Gold (ABX) bullishly noted the coming, permanent decline in annual gold production.

It’s a topic that’s been getting A TON of attention lately, as gold soars.

It’s also a relatively new (and controversial) idea, piggybacking on years of thought and analysis related to peak oil.

Over at The Oil Drum, Jean Laherrére has been attempting to model global gold production to show that indeed, the amount we pull out of the earth annually is set to decline permanently.

His first endeavour (which we wrote about here) focused on production within each major gold producing country.

The second part focuses on the macro, global measures of mining which further bolster the case for peak gold. We’ve picked out some of our favourite, most-telling charts from the presentation.

Now see the evidence >>
This content originally appeared on The Oil Drum and is licensed under a Creative Commons Attribution-Share Alike 3.0 United States licence

World cumulative (throughout history) gold production looks to peak sometime in 2050. An interesting phenomenon is that so far, it's tracked the rise in human population.

Here's gold production going all the way back through history. You can see the amazing 'hockey stick' that kicked in in the 1800s.

Annualized world gold production peaked in the year 2000, and it hasn't rebounded despite the amazing spike in price.

While some countries are producing more than they used to, the trend is clearly down.

Clearly the average grade is going down. This is huge, because lower quality grades require more energy for refinement.

Despite the slowdown in production, exploration budgets have actually soared.

There were several huge discoveries in the 80s and 90s, but they've petered out, despite the surge in production budgets

Again, gold discoveries are getting rarer.

As for the demand side, there was a slowdown through 2008. But 2009 has seen a surge, and China and India will explode going forward.

Mines aren't the only source of gold, but they're the biggest, and again, they're in decline.

Finally, the model for both gold and oil production. Both have peaked and are heading for near-zero in the next century

The waves of history: The Dow priced in gold

While gold and oil move closely, the non-mined, agricultural commodity wheat acts totally differently.

Now check out

Now go back and check out Part I of this series, which explored production declines across various gold-producing countries.

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