Gold Mining and Supply: How New Gold Enters the Market

Every ounce of gold that exists was either pulled from the earth by miners or recycled from existing products. Unlike oil, which is consumed when burned, gold is virtually indestructible — nearly all the gold ever mined still exists in some form today. Understanding where gold comes from and how the supply chain works gives investors important context for evaluating the factors that drive gold prices.

How Much Gold Exists?

The World Gold Council estimates that approximately 212,582 tonnes of gold have been mined throughout human history (as of the end of 2023). To put that in perspective, if you melted all of that gold into a single cube, it would measure roughly 22 meters (72 feet) on each side — fitting comfortably inside a tennis court.

This gold is distributed approximately as follows:

• Jewelry: ~46% (about 96,000 tonnes) — the single largest category
• Private investment: ~22% (bars, coins, ETFs — about 47,000 tonnes)
• Central bank reserves: ~17% (about 36,000 tonnes)
• Technology/industrial: ~15% (about 33,000 tonnes, though much of this is recycled)

It's estimated that there are roughly 59,000 tonnes of gold still underground in known reserves that are economically mineable at current prices. Beyond that, there are vast quantities of gold in the Earth's crust, oceans, and deeper geological formations that are not currently feasible to extract.

Annual Gold Mining Production

Global gold mine production has been approximately 3,600-3,800 tonnes per year in recent years. This represents only about 1.7% of total above-ground stocks — a remarkably low annual growth rate that contributes to gold's scarcity value.

Production has been relatively flat since 2018, as the easy-to-find, high-grade deposits have largely been discovered. New mines are increasingly expensive to develop, located in remote or politically challenging regions, and subject to tighter environmental regulations.

Top Gold-Producing Countries (2023)

1. China: ~370 tonnes — the world's largest producer since 2007, though production has been gradually declining due to environmental restrictions.
2. Australia: ~310 tonnes — home to some of the world's largest mining operations, including the "Super Pit" in Kalgoorlie.
3. Russia: ~310 tonnes — vast Siberian deposits make Russia a top producer, though Western sanctions have complicated exports.
4. Canada: ~200 tonnes — Ontario, Quebec, and British Columbia are key mining regions.
5. United States: ~170 tonnes — Nevada alone produces about 75% of US gold, particularly from the Carlin Trend.
6. Ghana: ~130 tonnes — Africa's largest producer, known for Ashanti Gold Belt operations.
7. Mexico: ~120 tonnes
8. Indonesia: ~110 tonnes — home to Grasberg, one of the world's largest gold and copper mines.
9. Uzbekistan: ~100 tonnes — the Muruntau mine is one of the world's largest open-pit gold mines.
10. Peru: ~95 tonnes

Top Gold Mining Companies

The gold mining industry is dominated by large multinational corporations:

• Newmont Corporation (USA) — The world's largest gold miner, producing about 5.5 million ounces annually after acquiring Newcrest Mining.
• Barrick Gold (Canada) — Operating major mines in Nevada, the Dominican Republic, Tanzania, and Papua New Guinea.
• Agnico Eagle Mines (Canada) — Major operations in Canada, Australia, Finland, and Mexico.
• AngloGold Ashanti (South Africa) — Operations spanning Africa, the Americas, and Australia.
• Gold Fields (South Africa) — Mines in South Africa, Ghana, Australia, and Peru.

The Mining Process

Gold mining is a complex, capital-intensive process that takes years from exploration to production:

Exploration (2-10 years)

Geologists use satellite imagery, geochemical sampling, and drilling to identify potential deposits. For every 1,000 prospects explored, roughly 100 are drilled, 10 lead to feasibility studies, and only 1 becomes a working mine. The process is expensive and uncertain.

Development (2-5 years)

Once a deposit is confirmed as economically viable, the mine must be designed, permits obtained, infrastructure built, and financing secured. A major gold mine costs $1-5 billion to develop.

Production (10-30+ years)

Gold is extracted through two primary methods:

• Open-pit mining: Used for deposits near the surface. Massive amounts of rock are excavated, crushed, and processed. The largest open-pit gold mine (Grasberg, Indonesia) is over 1.6 km wide and 600 meters deep.
• Underground mining: Used for deeper deposits. Shafts and tunnels are dug to access gold-bearing rock. South Africa's Mponeng mine extends over 4 kilometers below the surface — the deepest mine on Earth.

Processing

Raw ore contains very small concentrations of gold — typically 1-8 grams per tonne (anything above 5 g/t is considered high-grade). The ore is crushed, then treated with cyanide solution or other chemicals to dissolve the gold, which is then recovered through carbon adsorption, electrolysis, or smelting. The result is doré bars (semi-pure gold) that are sent to refineries for final purification to 999.9 fineness.

Gold Recycling: The Second Source

In addition to mining, approximately 1,100-1,200 tonnes of gold per year enters the market through recycling. This comes from:

• Scrap jewelry: The largest source of recycled gold. When gold prices rise, more people sell old jewelry, increasing recycled supply.
• Electronic waste: Circuit boards, connectors, and other electronic components contain small amounts of gold. Urban mining of e-waste is a growing industry.
• Industrial scrap: Recovered from dental work, laboratory equipment, and other industrial applications.

Recycled gold is price-sensitive — when gold prices rise sharply, more people sell their old jewelry and scrap, increasing supply and partially moderating price increases. This creates a natural self-regulating mechanism in the gold market.

The All-In Sustaining Cost (AISC)

One of the most important metrics for understanding gold supply is the All-In Sustaining Cost (AISC) — the total cost per ounce for a mining company to produce gold, including mining, processing, administration, exploration, and sustaining capital expenditure.

The global average AISC has risen significantly in recent years, reaching approximately $1,300-$1,400 per ounce by 2024. This sets a de facto floor for gold prices — if the gold price drops below the industry's average AISC for an extended period, mines shut down, supply decreases, and prices eventually recover.

Rising AISCs are driven by declining ore grades (mines are processing more rock for less gold), higher energy costs, increased labor and equipment expenses, stricter environmental regulations, and the exhaustion of the most accessible deposits.

How Supply Affects Gold Prices

Unlike most commodities, gold supply changes have a relatively muted impact on prices because:

• Above-ground stocks dwarf annual production: The 212,582 tonnes of existing gold dwarfs the ~3,700 tonnes mined annually. Gold is primarily a financial asset priced by demand, not a consumable commodity priced by supply flows.
• Supply is inelastic: Even if gold prices double, mines can't instantly double production. New mines take 5-10 years to develop. This supply inelasticity means demand surges translate directly into price increases.
• Peak gold concerns: Some analysts argue that gold production has peaked or will peak soon, as new discoveries have declined and existing mines are depleting. If true, this would be structurally bullish for prices over the long term.

For gold investors, the supply picture is broadly supportive: production is flat, costs are rising, and new discoveries are scarce. These dynamics provide a fundamental underpinning for gold's long-term value. Track the live gold price on our real-time dashboard.