Gold Mining in China

China is currently the largest gold producing country in the world. Ranking in 2006 put China as only the 3rd largest producer in the world, but expanded exploration has driven up their output over the past decade, with an increase of nearly 70%. In 2012, China’s gold output was estimated at 370 metric tons, far exceeding any other country in the world.

Despite China’s massive output in recent years, it is estimated that the country only has about 7% of the world’s gold reserves. This is relatively small when compared to the landmass of the country, but with limited exploitation of these resources over the past century, there is more potential here than in many other countries that have been mined more extensively. The country of South Africa, which was once the largest gold producer in the world, was recently overtaken by China. As many of South Africa’s gold reserves are being depleted, many of the reserves in China are just starting to be opened up.

Distribution of gold is not found evenly across the country of China. Most of the countries production has taken place in the provinces of Shandong, Fujian, Henan, Hebei, and Liaoning. Most large scale mining operations in China are mining gold ores from hard rock deposits. Some placers are being worked in many river systems in southwestern China as well, but these are less expansive then the lode deposits.

China has a rich gold mining history that goes back many decades. Chinese miners took part in many of the gold rushes across the world during the 1800s, and made up a significant part of the population in many old mining towns in the U.S. They were known to rework placer ground after it was abandoned by white miners, a common occurrence during the California Gold Rush.

Domestic gold production in China is still hindered by a lack of scale and investment, although that has changed significantly in the past few years. The oldest and largest gold mining company in China is the state-run China National Gold Group Corporation (CNGGC), which accounts for approximately 20% of the production in the country. Other major mining companies operating in the country include Zijin Mining Group Co Ltd., Eldorado Gold, Sinovus Mining, and the Goldrea Resources Corporation.

Much of the increased gold production within China has been to satisfy the demand for the precious metal within the country. Nearly all of the gold produced there stays in the country to be used for jewelry and a variety of other industrial uses. The countries improving economic outlook over the past several years has meant that a growing middle and upper class desire more gold products. The increased gold production within the country allows China to produce the gold needed in recent years without large amount of bullion imported from other countries.