he gold industry will need to bring on line eight-million ounces in the next five years to maintain 2019 levels of production, consultancy firm Wood Mackenzie (Woodmac) said on Wednesday, warning that the gold supply summit was in sight.
This equated to about 44 projects and based on the average project capital intensity of $4 610/oz, it would require an investment of about $37-billion in greenfield and restart projects by 2025.
Prior to the coronavirus outbreak, peak gold supply was becoming a real possibility. Now, with exploration programmes paused or cancelled and project disruptions hampering production, the summit is in sight, Woodmac noted.
“If all our probable projects were to come on line before 2025, this would almost meet the requirement to maintain 2019 production levels.
The likelihood, however, is that we see some degree of slippage among a number of these assets due to permitting delays, prioritisation of other capital projects and changes in scope,” Woodmac head of gold research, Rory Townsend, said in a statement.
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