Following the restrictions imposed during the COVID-19 pandemic, it appears that the gold production will slowly return to normal. Uzbekistan has announced it will resume its production, and even ramp up efforts at multiple mines over the coming years.
Uzbekistan is Back in Business
Various countries have seen their domestic gold production plummet due to the COVID-19 pandemic. That is only to be expected, as no safe work conditions could be provided in most regions. As the virus now appears to be under control somewhat, it is time to let businesses resume their normal operations.
For gold producers, this is excellent news. In Uzbekistan, several such operations are active today. Both Navoid Mining and Metallurgical Combine, as well as Almalyk Mining and Metallurgical Complex will resume their normal gold production in the very near future.
Not only that, but both operations have confirmed that they will ramp up their gold production by quite a margin. If successful, it is expected that both operations will produce over 5 Moz per year by 2026. An ambitious goal, under the current circumstances, but it seemingly can be done.
Few people know that the world’s largest single gold mine is located in Muruntau, Uzbekistan. It produces more than 2 Moz/year on a regular basis, yet there still appears to be room for further improvements. The recent introduction of a uniquely-angled and 3 km high conveyor at the mine has helped ramp up gold production by a significant margin.
Ramping up this gold production cannot be done without official approval. Uzbekistan President Shavkat Mirziyoyev signed off on these plans through a Presidential decree.
The production of gold and copper will be tripled at Almalyk Mining and Metallurgical Combine. That location represents 20% of Uzbekistan’s gold production, but also 90% of the silver production.
What Happens to the Gold Market?
Gold is often touted as being a very scarce precious metal. During the COVID-19 pandemic, it became even more scarce than normal, primarily due to ongoing supply chain issues and delays. Unfortunately, this has not impacted the gold price all that much, even though it still sits comfortably above the $1,700 mark.
As global gold production is now ramping up again, and even set to increase in certain countries, the market impact is difficult to determine.
More demand for gold is likely to materialize in the industrial segment, but that won’t translate to a higher price point right away. The second half of 2020 will be crucial to keep an eye on, as anything can happen.