U.S. Becoming World’s Largest Gold Producer Jewelry, Industry, Investment Uses Keeping Interest In Metal Strong
The U.S., second-largest gold producer in the world after South Africa, may emerge as the world’s biggest within 15 years, industry officials said.
“Based on current projections, the U.S. could be the biggest producer of gold in the world before 2010 if the mine permitting process is speeded up,” said John Lutley, president of the Washington-based Gold Institute.
Gold’s centuries-old attraction reflects the precious metal’s reputation as a safe haven investment during times of economic and social upheaval, its enduring decorative value in everything from bracelets to rings and its increasing industrial uses.
As much as 69 percent of the gold produced in the U.S. is used domestically in jewelry or sold to jewelers and investors in countries such as Italy, China and India.
Industrially, gold is used as a component of connectors on computer keyboards like the one this story is being written on, as well as in semiconductor chips.
Industrial users absorb up to 25 percent of gold produced annually, and the remainder is used in coinage. About 76 metric tons of gold were used in industrial applications in the U.S. in 1995, up 46 percent from the 52.1 tons consumed in 1986.
“U.S. production is rising while South Africa’s is declining,” said Ted Kempf, a senior research analyst with CPM Group in New York.
South African gold output is expected to fall to 16.4 million ounces this year from 19.9 million ounces in 1988, while 1996 U.S. output is forecast at 11.1 million ounces, up from 6.5 million ounces in 1988.
South African production has been declining for the past decade because of ore depletion and the emergence of new mines in countries where production costs are lower.
South Africa’s share of Western world production - which excludes China, Russia and former Eastern bloc countries where reporting methods are deemed inadequate by Western standards - fell to 31 percent in 1994 from 75 percent in 1970, according to an annual study by Brook Hunt, a U.K. mining and metal consultant.
Canadian mining companies, among the world’s largest bullion producers, are rushing to explore in the U.S.
“We view the component of our gold production in the U.S. as being critical to our overall production,” said Vince Borg, vice president of public affairs with Barrick Gold Corp. Toronto-based Barrick, the third-largest gold producer in the world after Anglo American Corp. of South Africa and Gold Fields of South Africa Ltd., owns the Goldstrike property in Carlin Trend, Nevada, containing the largest reserve base on one property in North America.
Acquired by Barrick in 1987, Goldstrike contains reserves of almost 30 million ounces.
The property contains the Betze-Post Mine, the largest single gold mine in the Americas.