Video: Gold mining faces the abyss after 2025, as a CRU analyst predicts

“This will be the most gold we have ever mined in one year,” Blagden said.

The decline represents a turning point for an industry facing dwindling reserves, geopolitical risks, and few new projects. Despite the high profitability resulting from strong gold prices, experts warn that without new investments, production could decline sharply, tightening supply and reshaping markets.

But even if all planned projects are commissioned, production could decline by up to 17% by 2030.

Blagden highlighted the challenges of maintaining production levels, especially in regions such as China and Russia. China is the world’s largest gold producer, according to the CRU. It contributes about 11% of global output but faces modest reserves relative to its production rate, indicating a potential supply bottleneck. Likewise, geopolitical pressures and declining crude quality have curtailed Russia’s production expansion.

Resource nationalism

Judicial risks add to the challenges, the analyst told a room of industry executives and investors. Blagden pointed to the growing resource nationalism in West Africa. Countries such as Mali and Burkina Faso have nationalized their operations, deterring foreign investment.

“We are seeing the impact of geopolitical instability in these regions, which adds another layer of complexity for miners,” he said.

Conversely, Blagden pointed to bright spots. These are mining-friendly reforms in Argentina and potential shifts in US policy. They can simplify permits and encourage new developments. However, he warned that North America, despite its political stability, remains the most expensive region for gold mining in the world.

Deficit in Greenfield

Despite these challenges, the gold mining industry remains very profitable. Blagden said 97% of gold producers operate on positive profit margins, assuming a gold price of $2,235 per ounce.

Average all-in sustaining cost (AISC) margins are 47%, reflecting the industry’s strong financial position. “I had a wonderful two years working in a gold mine,” he noted.

However, Blagden warned that earnings masked a worrying shortfall in new projects. High prices did not stimulate enough investment in exploration. It is difficult to find high-quality, well-located deposits.

Decisive action

Blagden pointed to gold’s unique position among commodities. Unlike metals such as copper or lithium, gold is not consumed but rather accumulated.

“If we stopped all gold mining today, aboveground reserves could meet manufacturing demand for 75 years,” he said.

In 2023, central banks recorded record buying levels. They continue to support prices, which now stand at $2,626.20 an ounce.

Blagden called on miners to act decisively during this highly profitable period. “Without new projects, mines will close, production will decline, and profits will shrink,” he said.

He urged miners to invest in strategic acquisitions, field expansions and exploration to extend the life of the mine and ensure future supplies. “The industry must seize this window of opportunity to maintain its long-term viability.”

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