Randgold Resources boss warns gold industry faces a supply crunch
The boss of FTSE-listed miner Randgold Resources has warned that the gold industry is facing a supply crunch.
Speaking in Johannesburg, South Africa yesterday, Mark Bristow told local mediathat global gold output was likely to peak in 2019 before coming down sharply.
He attributed this to a dearth of new discoveries alongside cost cutting measures which mean miners are not replacing their reserves.
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"To keep the gold industry supplied we need to discover 90m ounces a year. We are only discovering 10m to 15m ounces a year. We either have to discover more quality ounces or reduce the life of mines," he said.
Spot gold prices have risen 25.61 per cent year-to-date due to increasing expectations for an interest rate rise by the Federal Reserve and greater economic uncertainty following Britain's decision to leave the European Union.
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Bristow noted that the industry had been delivered a windfall by the bullion price rising more than $300 over the last eight months. This has allowed gold firms to pay off their debts which have been crippling other miners.
"The only way that the industry will deliver what it has delivered in the past eight months is to have another increase in the gold price," he said.