31 January, 2023

Total supply increased 2% y-o-y in 2022 as mine supply and recycling both posted modest growth

  • Annual mine production increased 1% y-o-y although remains below the record high seen in 2018
  • 2022 saw the global hedgebook almost unchanged over the year ending at 167t
  • Full year recycled gold supply increased by 1% but remains 30% below the all-time high seen in 2012, despite a record annual average gold price in 2022.
Tonnes20212022 YoY % change
Total supply4,682.44,754.52
Mine production3,568.93,611.91
Net producer hedging-22.7-1.5--
Recycled gold1,136.21,144.11

Source: Metals Focus, World Gold Council

Total supply increased by 2% y-o-y in 2022, halting two years of successive declines. Full year mine production of 3,612t was the highest since 2018 as the mining industry remained largely free of COVID interruptions and output in China posted a full year without safety stoppages in Shandong province. Regional gains and losses in recycling – due to base effects and local currency gold price moves – largely netted out over the year: 2022 recycled gold supply was essentially flat, up less than 1% at 1,144t. The global hedgebook was also almost unchanged over the year, although it is possible that some end-of-year hedging occurred in Q4, which will only be picked up as quarterly results are released in February.

Mine production

Mine production in Q4 2022 fell 1% y-o-y to 930t, the only quarter of 2022 that experienced a y-o-y drop. Annual production totalled 3,612t, up 1% y-o-y. Now that the COVID-19 production disruptions and widespread China safety stoppages of 2021 have reversed, this lack of production growth gives further credence to claims that gold production is close to plateauing. 


Mine production grew 1% in 2022 but remained below peak*

Mine production grew 1% in 2022 but remained below peak*

Mine production grew 1% in 2022 but remained below peak*
Sources: Metals Focus, Refinitiv GFMS, World Gold Council; Disclaimer *Data to 31 December 2022.

Sources: Metals Focus, Refinitiv GFMS, World Gold Council; Disclaimer

*Data to 31 December 2022.

China production recovery offsets declines in Russia, US and South Africa. Mine production in China increased by 42t (13%) to 374t as mining in Shandong province returned to normal following widespread safety stoppages for most of 2021. This recovery offset production declines in South Africa, down 11t (10%) to 103t, due to strike action and national electrical supply issues; the US, where lower grades and operational issues saw mine production 11t (6%) lower at 175t; and in Russia, where production fell 27t (8%) to 304t mostly due to issues related to the country’s invasion of Ukraine.

Regionally, Asian production saw the largest increase in 2022, up 11t y-o-y, driven by the recovery in China’s output, while mine production fell 10t y-o-y in the CIS and by 9t y-o-y in Central and South America.

Grades and operational issues dominated in Q4. China reported a 9% increase in mine production in Q4 2022 although this will be the last time that recovery from safety stoppages will drive y-o-y improvements. We expect Chinese production to resume its trend of gentle decline over the next few years as tightening environmental enforcement closes some smaller operations. Mauritania saw Q4 output more than quadruple y-o-y after a fire halted production at the Tasiast mine in the second half of 2021. In Ghana, Q4 mine output increased by 12% y-o-y as the Obuasi mine ramped up and production restarted at Bibiani, while Mali saw an 11% y-o-y increase due to higher grades at the Fekola mine.

Fourth quarter mine production declines were reported from a number of countries. In Mexico, production fell 10% y-o-y due to lower grades at several mines, including Peñasquito and Los Filos. Lower grades at Sanbrado and Essakane in Burkina Faso, along with security-related stoppages at Taparko saw Q4 2022 mine production fall 11% y-o-y. Colombia reported a 27% y-o-y decline in the fourth quarter but this appears related to a surge in artisanal and small-scale output in Q4 2021, which was not repeated this year. In Russia, mine production fell 10% y-o-y in Q4 2022. Lower grades at Olimpiada and Blagodatnoye contributed to this decline but sanctions also played a role in lower mine production. Operators, particularly smaller companies, are reportedly struggling to source reagents, spare parts and other consumables, all of which is affecting production.1 We have also heard reports that new mine construction is being slowed by import restrictions, although we note that information flow from Russia is being hindered by the war in Ukraine.

Seven new mine start-ups, with a combined annual production capacity of about 15t per annum, have recently begun production. Although this will be supplemented by output from private and smaller mines it is almost inconsequential compared to current mine output. But more operations are likely to be commissioned and expanded in 2023, and this should be sufficient to more than offset the combined impact of an expected small decline in Chinese output and the effect of sanctions on Russia. More detail on the gold mine production outlook can be found in the Outlook section.

Gold mining costs continued to increase in Q3 2022, the latest available data. The average All-In Sustaining Cost (AISC) hit US$1,289/oz in the third quarter, another record high and up 14% y-o-y. General inflation increased mining costs in all areas with fuel, energy, labour and consumables all up y-o-y, although this was slightly offset by higher average recovered grades, which increased by 2% y-o-y. Gold producer margins remained under pressure in Q4 2022 although a late-in-the-quarter rally in the gold price returned the 90th percentile AISC producer margins to positive levels, we estimate.

Net producer hedging

The global delta-adjusted producer hedge book was virtually unchanged (-2t) in 2022. We currently estimate that further, modest de-hedging of 5t took place during the fourth quarter, resulting in H2 net de-hedging almost balancing the net hedging seen in H1. Although it’s possible that higher local currency gold prices prompted some late-in-the-year hedging, we will only be able to confirm after the release of companies’ Q4 2022 results.

To put this into context, the global hedgebook is about 162t based on estimates of Q4 2022 activity, a far cry from its peak of more than 3,000t around the turn of the millennium. The gold mining industry’s attitude to hedging has fundamentally changed since then, with the majority of new hedging positions made either opportunistically in the short-term, and small in size, or from companies with project or debt finance requirements.

Recycled gold

A year of two halves. Recycling trends in 2022 painted a mixed picture. Following a jump in the gold price in the first half of the year recycling volumes increased by 6% y-o-y, but as gold declined in H2 2022 recycling volumes slipped 4% y-o-y. For the year as a whole, recycling volumes of 1,144t were 1% higher y-o-y.

Compared to the previous quarter, Q4 recycling supply increased 8% to 292t despite an essentially flat average gold price – US$1,725.85/oz compared to US$1,728.91/oz in Q3 2022. The main reason for the q-o-q rise was an increase in Indian recycling activities.

It is notable that full year recycled gold supply was 30% lower than the record high set in 2009, despite 2022’s record average gold price. We believe there are two major reasons for lower recycling supply last year. First, there were very few references to distress-selling of old jewellery, a sharp contrast to the situation during the Global Financial Crisis and Eurozone Crisis. Extensive fiscal support for consumers and businesses during the pandemic has protected employment while energy subsidies in Europe following the Russian invasion of Ukraine have helped insulate the public from surging energy prices. Second, we believe that the build-up of old/broken/unwanted jewellery by consumers has been limited, as it is only a decade since gold prices reached their last all-time high.


Recycling increased 1% in 2022 but is 30% below all-time highs*

Recycling increased 1% in 2022 but is 30% below all-time highs*

Recycling increased 1% in 2022 but is 30% below all-time highs*
Sources: Metals Focus, Refinitiv GFMS, World Gold Council; Disclaimer *Data to 31 December 2022.

Sources: Metals Focus, Refinitiv GFMS, World Gold Council; Disclaimer

*Data to 31 December 2022.

Declines in recycling supply from the Middle East were notable in Q4 2022. Without the fall from this region, down more than 30% y-o-y and nearly 8% q-o-q, global recycling supply would have increased much more. Two factors drove weaker Middle Eastern recycling supply: first, political and economic concerns in Iran, Turkey and Egypt, where a mixture of high inflation, currency weakness (actual or anticipated) and political unrest combined to increase the attraction of hanging onto gold. Second, higher hydrocarbon prices saw fortunes improved across much of the region, with Iraq a named standout. One theme common to countries in the region  – many of which have currencies pegged to the US dollar – is that recycling supply increased after the US dollar gold price started to recover at the beginning of November.

India was another stand-out recycling market during the quarter, with sharp increases in recycling supply. The South Asian region – where India is by far the biggest market – saw recycling supply up nearly 40% y-o-y and about 60% q-o-q. This surge in volume is explained mainly by the increase in the  average rupee-denominated gold price, which was up 3% q-o-q and ended December near the highs of the year and 10% above the Q4 low. This had two effects: first, it suppressed jewellery demand at a normally soft period of the year and second, it substantially reduced the amount of old jewellery that was exchanged for new, thus increasing the amount of outright sales of old jewellery.


Recycling demand in Q4 and 2022 saw regional variations*

Recycling demand in Q4 and 2022 saw regional variations*

Recycling demand in Q4 and 2022 saw regional variations*
Sources: Metals Focus, World Gold Council; Disclaimer *Data to 31 December 2022.

Sources: Metals Focus, World Gold Council; Disclaimer

*Data to 31 December 2022.

In other markets, recycling supply from Europe increased, largely driven by a higher euro-denominated gold price, up 8% y-o-y in Q4 2022, while North American volumes were lower y-o-y as no local currency boost was seen in the US. Finally, China saw stronger recycling volumes in Q4 2022, partly due to higher yuan-denominated gold prices but with some evidence of gold being sold to raise cash due to the economic slowdown in the country.

We do not believe 2022 recycling volumes were materially affected by lock-downs, with the possible exception of some parts of China. Now that this country is reopening quickly it will be interesting to track recycling volumes in this important gold consuming market.

Barring a sharp rise in the gold price in 2023 we believe recycling supply could decline modestly over the year. For more details, please see the Outlook section.


  1. Reagents are key chemicals used in mineral processing.

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