Wholesale gold bullion prices averaged $1266 per ounce in 2014, and "in terms of both volumes and profitability," says Thomson Reuters GFMS, "the mining industry remains in a precarious position."
Outside China – now the world's No.1 mining nation every year since 2007 – last year's output growth came mostly from large, recently commissioned either "ramping up production" or seeing "significant expansions" the consultancy explains. Losses, in contrast, came from more mature projects – notably major US sites such as Cortez, owned by the world's largest gold miner Barrick (NYSE:ABX), and the Nevada Complex, run by world No.2 Newmont (NYSE:NEM).
So-called "informal mining" also shrank says Metals Focus, with small-scale, hand-worked and mostly illegal output estimated to have fallen 5% following 2013's sharp drop in world prices and with "a crackdown on informal mining practices in some countries."
Amongst the world's largest mine companies, says a separate report from London bullion market maker Barclays Bank, capital expenditure last year fell to half the level of 2012.
"It has been projects and expansions conceived during the gold bull market," says Metals Focus, "that have continued to drive production higher in recent years."
With capex now slashed, however, the rate of new mines entering production has "slowed markedly, and the number of projects currently under construction has dwindled."
Acquisitions via the stock market, in contrast, fell only 3% last year from 2013 according to SNL, with the average spend on companies or sites already in production falling nearly 30% from $440 million to $318 million.