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Thursday, November 6, 2008

Economic gold

Economic gold extraction can be achieved from ore grades as little as 0.5 g/1000 kg (0.5 parts per million, ppm) on average in large easily mined deposits. Typical ore grades in open-pit mines are 1–5 g/1000 kg (1–5 ppm), ore grades in underground or hard rock mines are usually at least 3 g/1000 kg (3 ppm). Since ore grades of 30 g/1000 kg (30 ppm) are usually needed before gold is visible to the naked eye, in most gold mines the gold is invisible.

Since the 1880s, South Africa has been the source for a large proportion of the world’s gold supply, with about 50% of all gold ever produced having come from South Africa. Production in 1970 accounted for 79% of the world supply, producing about 1,000 tonnes. However by 2007 production was just 272 tonnes. This sharp decline was due to the increasing difficulty of extraction, changing economic factors affecting the industry, and tightened safety auditing. In 2007 China (with 276 tonnes) overtook South Africa as the world's largest gold producer, the first time since 1905 that South Africa has not been the largest.

The city of Johannesburg located in South Africa was founded as a result of the Witwatersrand Gold Rush which resulted in the discovery of some of the largest gold deposits the world has ever seen. Gold fields located within the basin in the Free State and Gauteng provinces are extensive in strike and dip requiring some of the world's deepest mines, with the Savuka and TauTona mines being currently the world's deepest gold mine at 3,777 m. The Second Boer War of 1899–1901 between the British Empire and the Afrikaner Boers was at least partly over the rights of miners and possession of the gold wealth in South Africa.

Other major producers are United States, Australia, China, Russia and Peru. Mines in South Dakota and Nevada supply two-thirds of gold used in the United States. In South America, the controversial project Pascua Lama aims at exploitation of rich fields in the high mountains of Atacama Desert, at the border between Chile and Argentina. Today about one-quarter of the world gold output is estimated to originate from artisanal or small scale mining.

After initial production, gold is often subsequently refined industrially by the Wohlwill process or the Miller process. Other methods of assaying and purifying smaller amounts of gold include parting and inquartation as well as cuppelation, or refining methods based on the dissolution of gold in aqua regia.

The world's oceans hold a vast amount of gold, but in very low concentrations (perhaps 1–2 parts per 10 billion). A number of people have claimed to be able to economically recover gold from sea water, but so far they have all been either mistaken or crooks. Reverend Prescott Jernegan ran a gold-from-seawater swindle in America in the 1890s. A British fraud ran the same scam in England in the early 1900s.

Fritz Haber (the German inventor of the Haber process) attempted commercial extraction of gold from sea water in an effort to help pay Germany's reparations following the First World War. Unfortunately, his assessment of the concentration of gold in sea water was unduly high, probably due to sample contamination. The effort produced little gold and cost the German government far more than the commercial value of the gold recovered. No commercially viable mechanism for performing gold extraction from sea water has yet been identified. Gold synthesis is not economically viable and is unlikely to become so in the foreseeable future.

The average gold mining and extraction costs are $238 per troy ounce but these can vary widely depending on mining type and ore quality. In 2001, global mine production amounted to 2,604 tonnes, or 67% of total gold demand in that year. At the end of 2006, it was estimated that all the gold ever mined totaled 158,000 tonnes.

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