The New Era of Mining 2024 Edition

One year ago, when the inaugural edition of The New Era of Mining was published, the price of gold was just below $2,000 per ounce—a historic high. Twelve months later, the precious metal has appreciated by approximately 35 percent, rising to over $2,600 at the time of writing.

Gold purchases by central banks in developing countries have remained the primary force driving prices, but the magnitude of their stockpiling suggests intentions beyond merely hedging against geopolitical risk. China, as the primary suspect, has purchased over 2,800 tons of gold from overseas in the last two years—more than all the metal backing gold ETFs globally. As a number of industry leaders recognize, a frenzy of such scale is the marker of a seismic shift. In simple terms, the BRICS countries, led by Beijing, are attempting to de-dollarize their economies. As the CEO of Alamos Gold, John McCluskey, explains: “This trend suggests a growing reliance on gold to underpin a parallel economic trade bloc, driven by mutual distrust among these nations.”

Part of Beijing’s motivation is to acquire immunity against potential future sanctions like those the West imposed on Russia. “When the U.S. froze Russian assets, central banks took notice, and now countries like China are diversifying to ensure their assets cannot be frozen in future disputes,” Martino De Ciccio, the CEO of Montage Gold says. Although it is difficult to predict when the gold-purchasing spree will end, De Ciccio, whose company has recently obtained all the permits for its mine in Côte d'Ivoire, is confident that we are witnessing only the beginning of a persistent trend. Indeed, China’s gold reserves, in relative terms, are still the lowest of any major economy, indicating that Beijing’s aggressive purchasing strategy is set to continue in the long term. With this in mind, many gold producers are confidently expanding their operations around the world. The Canadian B2Gold, for example, is investing heavily in further exploration and development, planning to produce about 600,000 ounces of additional gold per annum soon.

Written by: Konstantin Tumanov