Gold exploration has slowed in recent times despite a rally in the price to new highs, raising questions about the long-term sustainability of global supply and the future of the industry in SA.
According to S&P Global Commodity Insights’ most recent annual analysis, 353 major gold deposits were identified worldwide between 1990 and 2024, amounting to about 2.97-billion ounces of reserves, resources and past production.
That’s just 3% more than last year’s estimate of 2.89-billion ounces, and almost all the newly added assets were discovered decades ago and have only recently met the criterion of containing at least 2-million ounces of gold in reserves, resources and past production, S&P Global said.
Since 2020, just six major finds have been recorded globally, together contributing 27-million ounces of resources and reserves, a drop in the ocean when rising global demand and surging prices are taken into account.
Gold has more than doubled in price since 2022, breaching $3,000/oz earlier this year as geopolitical tension, conflicts in Europe and the Middle East, and trade friction drove investors towards safe-haven assets.
• Despite gold prices hitting record highs, global and South African gold exploration is slowing, raising alarms about future supply.
Spending on exploration has failed to keep pace with the price boom. According to S&P Global Commodity Insights, exploration budgets declined 15% in 2023 and a further 7% in 2024, largely because junior miners struggled to secure funding in an environment of high interest rates.
Meanwhile, grassroots exploration, which accounted for half of global budgets in the mid-1990s, dropped to just 19% of total spending in 2024 as the industry increasingly steers away from high-risk ventures.
For SA, which is home to some of the world’s richest deposits but is grappling with steadily declining output, the report highlights a set of growing challenges. Production has been in structural decline for decades, driven by falling ore grades and ever-deeper, more expensive mining operations.
“Without significant new discoveries or a renewed commitment to early-stage exploration, the country’s gold industry faces the risk of further contraction,” S&P Global said.
The implications extend well beyond mining since the metal remains a pillar of SA’s economy, contributing to export earnings, foreign exchange reserves and employment.
“With prices at record highs, the lack of exploration investment raises concern over missed opportunities to revitalise one of the nation’s most iconic sectors.”
The report cautioned that in the absence of fresh discoveries or technological breakthroughs to boost recovery from lower-grade deposits, SA, like many legacy producers, may struggle to fully capitalise on the price boom. “That could weaken the sector’s ability to offset broader economic pressures, including sluggish growth, rising debt and investor unease over policy direction.”
Until about 2007, SA was the world’s largest gold producer, but it now languishes in joint 10th position.
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