The expense of mining gold continues shooting higher. Barrick Gold Corporation says its cost of production jumped during the second quarter as the coronavirus pandemic spread across the globe. The second-largest mining company anticipates a rise of 7-9 percent in the second quarter for the industry’s benchmark of costs—the “all-in sustaining cost per ounce” of production—compared to the first quarter. Barrick’s all-in sustaining cost was $954 per ounce in the first quarter, up from $923 in the fourth quarter and $825 in the first quarter of 2019.
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Contributing to rising costs is the fact that the global pandemic has disrupted mining around the world. Barrick had to close its large Veladero mine in Argentina, on top of a maintenance shutdown at a mine in the Dominican Republic and a reduction in production at its Porgera mine in Papua New Guinea because of conflict with the government.
Newmont Corporation, the world’s largest miner, has also been impacted by coronavirus-related shutdowns, having halted production at mines in Canada, Mexico, and Peru. The company recently forecast all-in sustaining costs per ounce this year of $1,015.
Beyond the impact of the coronavirus, the cost of mining gold has been rising in recent years as easily accessible gold is depleted and new gold deposits become harder to find and retrieve. All-in costs are now more than triple what they were in 2004 when Barrick’s expense for mining an ounce of gold was $300 and Newmont’s cost was $278 an ounce.
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