The rocky road to gold mining
News Arnulf Hinkel, financial journalist – 04.04.2018
The romantic idea of lonely gold prospectors with their pans has long since given way to a more realistic image of major high-tech industrial entities exploiting gold mines in a cost-effective way. Even today, however, a considerable amount of effort and time goes into the exploration and development of a gold mine – more than most people might imagine.
Basic requirements: patience and stamina
Gold mine exploration is extremely costly and time-consuming, due to the low probability that significant gold veins will actually be discovered during test drillings: less than 0.1per cent of all prospected sites lead to a profitable gold mine. It may well take a full ten years from the first test drillings by a mining company to the decision to build a gold mine at a selected location.
Up to 15 years until the start of gold mining
Once the decision to mine gold has been made, another one to five years are needed for the planning and construction of a gold mine. Obtaining all licenses and approvals alone can take several years. Usually, construction work is by no means limited to the actual gold mine. The entire local infrastructure oftentimes has to be set up as well, for logistical or operational needs or employee accommodation. After the groundwork has been laid, the actual gold mine can start operations, which may go on for ten to 30 years. This depends on the profitability of a mine over time, which in turn is strongly influenced by the respective gold price.
It ain’t over ‘til it’s over
When a gold mine is exhausted or no longer deemed profitable, it cannot simply be shut down. The decommissioning is a rather complex process lasting up to five years, during which all equipment and buildings are removed and the extraction land must be rehabilitated and restored to its natural state as far as possible. This important contribution to environmental sustainability is reviewed and certified by the Responsible Jewellery Council, allowing gold producers such as Umicore to offer gold bearing the Council’s seal of approval.