We use cookies (including third-party cookies such as Google) to remember your site preferences and to help us understand how visitors use our sites so we can improve them. To learn more, please see our privacy policy and our cookie policy.

To agree to our use of cookies, click 'Accept' or choose 'Options' to set your preferences by cookie type.

Options Accept
BullionVault

CHARTS

  • English
  • Deutsch
  • Español
  • Français
  • Italiano
  • Polski
  • 日本語
  • 简体中文
  • 繁體中文
  • Daily audit
  • Help
  • Contact
  • Deposit
  • Login
  • Open account
  • ABOUT US
    • About BullionVault
    • In the press
    • Reviews
    BUY/SELL BULLION
    • Vaulted gold & silver
    • -Live order board
    • -Daily Price
    • Coins for delivery (UK)
    INVESTMENT GUIDE
    • Guide to gold
    • -How to buy gold
    • -Gold investment
    • -Gold investment plan
    • -Investment insurance
    • -Compare asset performance
    • Guide to silver
    • -How to buy silver
    • Guide to platinum
    • -How to buy platinum
    GOLD NEWS
    • Gold news front page
    • -Gold price news
    • -Opinion & analysis
    • -Market fundamentals
    • -Gold/Silver Investor Index
    • -Infographics
    CHARTS
    • Gold price
    • Silver price
    • Platinum price
    • Price alerts
  • Login
  • Open account
  • BUY/SELL BULLION
  • Vaulted gold & silver
    • ⤷
    • Live order board
    • Daily Price
  • Coins for delivery (UK)
  • INVESTMENT GUIDE
  • Guide to gold
    • ⤷
    • How to buy gold
    • Gold investment
    • Gold investment plan
    • Investment insurance
    • Compare asset performance
  • Guide to silver
    • ⤷
    • How to buy silver
  • Guide to platinum
    • ⤷
    • How to buy platinum
  • GOLD NEWS
  • Gold news front page
    • ⤷
    • Gold price news
    • Opinion & analysis
    • Market fundamentals
    • Gold/Silver Investor Index
    • Infographics
  • CHARTS
  • Gold price
  • Silver price
  • Platinum price
  • Price alerts
  • ABOUT US
  • About BullionVault
  • In the press
  • Reviews
  • Help
  • Contact
  • Daily audit
    • English
    • Deutsch
    • Español
    • Français
    • Italiano
    • Polski
    • 日本語
    • 简体中文
    • 繁體中文

Gold News

Live support

NEED HELP? ASK US NOW

Search form

Gold News front page

Gold Price News

Gold Prices 'Caught' Between Covid and Massive Stimulus Ahead of Chinese New Year

More...

Gold Investing In Depth

Learn about gold bullion bars

Learn about gold bullion coins (and costs)

Gold investment: Why & how?

Gold Investment Analysis

  • Latest Gold Investor Index
  • Diversification: Gold as investment insurance
  • 40-year Asset Performance Comparison Table

Gold Articles

Opinion & Analysis

Gold Price News

Investment News

Gold in History

Gold Books

Gold Investor Index

Gold Infographics

Archive

  • January 2021 (18)
  • December 2020 (24)
  • November 2020 (23)
  • October 2020 (25)
  • September 2020 (25)
More...

List of authors

$2000 Gold to Boost ASM Mining 13% in 2021

Thursday, 10/15/2020 13:46
Miner-stock investing driven by ESG, falling reserves and M&A...
 
GOLD PRICES will average a record $2000 per ounce in 2021 according to market-leading analysts, boosting new supply from informal mining in emerging economies while output from major stock-market listed producers faces declining reserves in the ground plus growing demands for tighter environmental and social standards from equity investors.
 
Specialist consultancy Metals Focus said in an industry webinar Wednesday that the gold price – now showing a record-high annual average of $1774 so far in 2020 –  will rise further next year on fresh monetary stimulus from central banks, weak global economic growth, and continued geopolitical uncertainty.
 
2021's forecast average of $2000 will spur a 13% jump in gold output from artisanal and small-scale mining (ASM), the consultancy believes, reversing the drop caused by this year's global coronavirus pandemic making it more difficult for this often illegal supply to reach buyers.
 
With temporary mine closures also hitting the formal sector due to this year's pandemic, total mined gold production is set to decrease by nearly 5% in 2020 on Metals Focus' latest forecasts, before rallying nearly 9% to set a fresh all-time record in 2021 as Covid-19 disruption eases and prices rise further.
 
Global mined gold total and outlook. Source: Metals Focus
 
Payments received by ASM gold miners have fallen from 80% of London bullion prices to just 50% in 2020, Metals Focus estimates, reflecting the extra costs hitting "middlemen" in that supply chain and offering less incentive for what is hard and often highly dangerous manual labor.
 
Only 5 gold-bar refineries on market association the LBMA's London Good Delivery list currently take in any ASM doré (the pre-processed ore usually received for refining), the Association said last October, calling on the refineries it approves to expand their use of ASM gold supplies to help both improve pay-rates and conditions at small-scale projects while also plugging the shortfall starting to develop from larger, formal gold mining projects.
 
While "inherently difficult to quantify", ASM output – some 60% of which comes from Africa, with a further 27% from Central and South America – totalled 597 tonnes in 2019 on Metals Focus' data, built by cross-referencing government statistics, trade flows, NGO and aid-charity estimates plus on-the-ground research.
 
ASM accounted for 17% of total world output last year, up from 15% in 2018, a "huge number [that is] probably the minimum" says former refining executive Grant Angwin, also speaking on Wednesday's webinar.
 
ASM gold mining output, annual global total. Source: Metals Focus
 
 
2020 aside, ASM output – mined in poorer regions of the world, and booming over the last decade thanks to higher gold prices, local population growth, a lack of economic alternatives, the spread of mining expertise, and mobile telecoms – is "far more responsive" to market prices than larger, formal projects, says Metals Focus' director of mine supply Adam Webb, which take at least 2 years to build and can take 5-10 years for underground mines.
 
The delays and expense that involves means the large cashflows now being enjoyed by stockmarket-listed mining companies are more likely to find their way into mergers and acquisitions than developing new projects, Webb said on Wednesday's webinar.
 
"M&A offers a simple way to grow and get immediate exposure to the gold price."
 
Combined gold output after 2018's mega-mergers fell nearly 10% year-on-year at Newmomt-GoldCorp (NYSE: NEM) and Barrick Gold Corp (NYSE: GOLD).
 
Those two giant groups now stand "head and shoulders above the rest" of the world's listed gold miners in terms of cashflow and resources, says Metals Focus' senior consultant Mike Bedford, adding that the major producers "are [slowly] running out of gold" and now have the opportunity to buy lower-rated companies using their more highly-rated shares.
 
Barrick CEO Mark Bristow – formerly chief at Randgold Resources, which merged with the Canada-based giant 2 years ago – last week called for further consolidation among Africa's listed gold miners, hailing the merger of Australia's Northern Star (ASX: NST) and Saracen (ASX: SAR) as a "great example" while warning of a "serious reserve crisis" for the wider industry as it fails to discover and exploit new resources.
 
More pressing still is the sharpening focus among equity investors on environmental, social and governance issues (ESG), "now vital and unavoidable elements in determining how investments are chosen, managed, and measured," writes John Mulligan at the mining industry's World Gold Council.
 
ESG analysis is driving $40 trillion of asset management decisions, noted Matthew Keen of Emergent Technology and managing director, Responsible Gold Trading DMCC, also speaking on Wednesday's Metals Focus webinar. That's twice the value of 4 years ago, a study from research firm Opimas reported earlier this year.
 
Presenting data from Metals Focus' new Gold ESG Peer Group report on Wednesday, Bedford identified 7 criteria the consultancy is now tracking, from greenhouse gas emissions to water use, waste production, health and safety, and female representation both at board and total workforce levels.
 
Among those rankings, Barrick's merger with central and west-Africa miner Randgold saw its carbon footprint surge in 2019, with South Africa-based Sibanye (JSE: SSW) showing the heaviest greenhouse gas emissions in total and Harmony (JSE: HAR) the heaviest per ounce of gold mined, all thanks to the region's reliance on coal-fuelled power plants for electricity.
 
Average margins across the world's top mining stocks more than doubled year-on-year in the second quarter of 2020, reaching $739 per ounce on Metals Focus' analysis.
  • Reddit logo
  • Facebook logo
  • Twitter logo
  • Google logo
  • Yahoo logo
  • LinkedIn logo
  • Digg logo
  • StumbleUpon logo
  • Technorati logo

See all articles by Gold Bug here.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn

 

Mobile apps

 - live trading 24/7

 - buy & sell instantly

 - up-to-the-second charts

 

 

 

Daily news email
Go to 'communications settings' 

Get the latest daily gold price news free by email

Latest gold news by email

 

 

 

Gold Investor Index
5 January 2020

Gold Investor Index

Gold investing +58% in NY21

 

 

 

LBMA webinar
21 January 2021

LBMA

London gold trading

 

 

 

International
Investment

16 December 2020

Gold 2021

Gold in 2021

 

 

 

LBMA Alchemist
1 December 2020

Newton

True Gold/Silver Ratio

 

 

 

  •  Email us

Market Fundamentals

  • 'Cut Bullion Duty to Cut Smuggling': India's Gold Industry
  • Platinum Price Hits 4-Year High Even as Electric Beats Diesel Cars in Europe
  • Record Investing Pushes 'Industrial' Silver and Platinum into Deep Deficits
More...
  • Cost calculator
  • Cookies
  • Terms & conditions

©BullionVault Ltd 2005-

  • Twitter
  • Facebook
  • LinkedIn
  • YouTube

Save your cookie preferences

We use cookies to remember your site preferences, record your referrer and improve the performance of our site. For more information, see our cookie policy.

Please select an option below and 'Save' your preferences.

Save

You can update your cookie preferences at any time from the 'Cookies' link in the footer.

Secure auto-logout warning

You have not been active for some time.

For your security you will be logged out in   minutes unless you take action.