BEIJING – Geologists have discovered a giant gold deposit with estimated reserves of 1,000 tons and a value exceeding $80 billion.
And it’s clear this is a turning point in the geopolitics of precious metals, as it could be one of the largest gold deposits in the world (or at least among the discovered ones). The size of the vein, the exceptional quality of the ore, and China’s role as the world’s top gold producer… Everything that’s coming next for the gold industry is going to bring changes. Want to know more?
A record-breaking discovery
The Hunan Geological Bureau announced they had detected 40 high-grade veins in Pingjiang County. Each metric ton contains an average of around 138 grams (about 5 ounces) of gold, which is incredible for miners.
And according to the first 3D models, the mineralization extends down to 3 kilometers!!! Truly an unprecedented volume for the global gold industry. Of course, markets have responded and have placed China as the leading power in gold extraction.
Markets on the rise
Of course this discovery triggered a rise in the markets. Even though commercial exploitation will still take years, the global economy took notice of the news.
Impact on strategic reserves
China already exceeds 2,000 tons in official reserves. With this deposit, Beijing could strengthen its financial arsenal without relying on other markets, just by reducing pressure on the dollar and diversifying its currency cushion. Incredible!!!
If the planned extraction becomes a reality, the country would control more than 15% of the world’s raw gold all by itself!
John Reade, a senior market strategist from the WGC, said that China’s potential resource sounds quite ambitious (referring to the 1,000 tons) and he doesn’t believe China will be able to turn that much gold into reserves.
How much does the global market produce?
It’s estimated that the global market surpasses 3,600 tons a year (about 127 million ounces), and Reade believes that just because a mine surpasses one million ounces a year, it won’t change much in the global market.
What is gold used for today?
Mainly and most obviously, gold is used as a safe haven for future economic crises, since the gold a country possesses becomes part of its reserve.
But today, what matters most is technology and electronics, as gold is an excellent conductor of electricity. Believe it or not, your phone and your computer contain components made with gold!
So, China is getting ready to lead the tech race by controlling a resource that’s quite scarce. The whole world is looking at Pingjiang, the epicenter of what could be the biggest gold rush of the 21st century.
This article appeared in Union Rayo
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