Total supply was virtually flat at 1,150t (-0.3% y-o-y). Modest growth in mine production (1%) and recycling (5%) was supported by a second consecutive quarter of net hedging (10t).
In Q1, mine production grew marginally to 852.4t (+1% y-o-y), the highest level of Q1 output on record. Given the seasonality in gold production – where output in the first quarter is typically the weakest – this represents a strong start to the year.
The continued ramp-up of significant projects in key gold mining jurisdictions supported growth in Q1. In Canada, the fifth-largest producing nation in 2018, the continued ramp-up in production at Brucejack, Rainy River and Moose River, as well Meliadine coming online, boosted output by 9% y-o-y. Russia production grew by 4% y-o-y in Q1, primarily due to the ramp-up of the Natalka open-pit mine. This was also supported by growth at several other projects, particularly in the far east of the country. Australian output rose by 3% y-o-y, thanks to the ramp-up of Mount Morgans and Cadia Valley. Kazakhstan mine production grew by 26% y-o-y, driven mostly by the ramp-up at the Kyzyl project. Aggregate Q1 production in Papua New Guinea gained 11% y-o-y, with output from Lihir, Porgera and Hidden Valley rising.
But some producing nations saw notable declines. In China, the impact of stringent environmental regulations was more muted: national gold production fell 2% y-o-y in Q1, compared with y-o-y declines of up to 8% since 2016.1 Most of the major mining companies within the country are now compliant with the regulations after a tough adjustment period. Argentinian gold output fell by 7% y-o-y, due to a combination of lower production at Veladero and the shutdown of Alumbrera.2 The largest Q1 y-o-y decline was in Indonesia, where production slumped 45%. This was primarily due to the exhaustion of higher-grade ore from the final phase of the Grasberg open pit, and not entirely unexpected as Grasberg transitions to underground operations.
Artisanal and small-scale mining (ASM) has become a larger part of annual mine production.3 Given the nature of ASM activity, reliable data are extremely difficult to come by. There are several estimates regarding the scale of ASM, with most suggesting now accounts for somewhere between 15% and 20% of global annual gold mine production. This growth has been prompted by a few key factors: higher gold prices, population growth, the lack of economic opportunity and the spread of mining expertise have boosted ASM output, most prominently in Africa.
This lack of reliable data not only increases the chances that estimates can be inaccurate, but also heightens the need to constantly review the quality of the data we do have. Following an extensive reassessment of the scale of ASM, during which new information came to light, Metals Focus – our primary gold demand and supply data provider – concluded that previous estimates significantly understated ASM output. Global mine production data have been revised upwards as a result, which has impacted our mine production data series back to 2010.