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Gold Production
Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority.)

The principal gold-producing countries in the world in the approximate order of the size of their output in recent years are South Africa, U.S.S.R. (conjectural), Canada, U.S., Rhodesia, Australia, Phillippines, Ghana, Colombia, and Mexico.

Before 1840, practically all gold came from Russia.  Gold-producing countries are normally gold-exporting countries, but in recent years sales to the private market have declined, whereas additions to monetary stocks of governments and their central banks, as well as international institutions, have increased.

History of Production.

From 1860 to 1890, annual world production of gold was relatively stable, with only moderate annual fluctuations.  The U.S. produced only small quantities of gold until the discovery of gold in California in 1848.  From 1850 to 1886, as a result of gold mining in California, the U.S. produced over one-third of the world's gold, but gradually the American contribution to world production has declined, and in recent years has been only 2% to 3%.  rich gold deposits were also found in Australia about 1850.  Gold discoveries in California and Australia accounted for the sudden expansion in world production from 1840 to 1860.

Beginning about 1891, world gold production began another expansion due to the discovery of the Yukon and South African fields and to improvements in methods of extraction (hydraulic and cyanide processes).  Recovery of gold from known ore reserves became a technical industrial process.  The Yukon mines have declined in importance, but the South African mines have proved to be the most prolific in history.

Gold production reached a then peak level in 1915 for the world and the U.S., and then began a declining trend that lasted seven years, to 1922.  Since that year, it increased steadily in the world.  Under the old $20.67 per ounce statutory price for the U.S., world production reached a then peak of $525.1 million in 1933.

A new era in gold production opened with the increase in the U.S. statutory price for gold from $20.67 to $35 an ounce.  Measured in fine ounces, world production reached a new peak of 42.27 million ounces (Bureau of Mines estimate) in 1940, 66% above the old 1933 peak of 25.367 million ounces.  Since 1940, the world total receded, particularly during World War Ii years, when shortages in equipment and manpower affected production.  The rise in the cost of mining also affected production, so that many gold mining companies were obliged to diversify into other ores and extractive industries.  Nevertheless, beginning in 1946, an expansion occurred, led by the African mines, which slowed down in the late 1970s.

Gold Stocks.

Estimates of total gold holdings for the world and for individual nations would have to include both official and private holdings.  Statistics of the INTERNATIONAL MONETARY FUND, which do not include totals for holdings of the People's Republic of China and of the U.S.S.R. and its associated countries, indicated official holdings of 937.94 million troy ounces as of the close of 1980, compared to 930.23 million troy ounces at the close of 1979, and 1,022.04 million ounces at the close of 1978, in turn comparing with a post-World War II high of 1,186.52 million ounces at year-end 1965.  The largest of such official holdings reported at the close of 1980 were those of the U.S., 264.32 million ounces, compared to West Germany's 95.18 million ounces, Switzerland's 83.28 million ounces, France's 81.85 million ounces, Italy's 66.67 million ounces, the Netherlands' 43.94 million ounces, and Belgium's 34.18 million ounces.  The largest world producer of gold, South Africa, was reported to have 12.15 million ounces in official holdings at the close of 1980.  The EUROPEAN MONETARY SYSTEM (EMS) backs its currency unit, the ecu, with 20% of each member nation's gold and dollar reserves, the gold being valued at the average market price of the preceding six months.

The oil exporting countries had a total of 39.94 million ounces of gold at year-end 1980; the largest total was that of Venezuela, 11.46 million ounces, compared with 4.57 million ounces for Saudi Arabia, the largest oil producer.  But Saudi Arabia had the largest total reserves (gold, special drawing rights (SDRs), reserve position in the IMF, and foreign exchange holdings) in the oil exporting group, 18,536 million SDRs, compared to 5,579 million SDRs for Venezuela and 21,480 million SDRs for the U.S. in such total reserves.

The appended table compares gold production of the U.S.

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