JOHANNESBURG (miningweekly.com) – The decision of the China National Gold Group Corporation (China Gold) to join the World Gold Council and take up a seat on its board marks the “astonishing” expansion of China’s gold mining industry in the last three decades.

China is currently the planet’s largest gold market in both supply and demand terms, with yearly gold production up 650% to 462 t from 60 t in 1985.

Moreover, both China Gold and the World Gold Council believe that a plethora of opportunity still exists for further market growth in China, where a middle-class population with a deep-rooted cultural affinity for gold is expected to number 500-million by 2020.

On top of that, financial reforms have created a favourable context for further Chinese gold market development and internationalisation, around which the council itself is determined to play a pivotal role.

“The rapid expansion has been astonishing,” World Gold Council chairperson Randall Oliphant commented in a media release sent to Creamer Media’s Mining Weekly Online.

China Gold chairperson and GM Song Xin said his company’s increased interaction with the world’s leading gold mining companies and the council’s programmes would help advance global understanding of China’s gold market and its wider international impact.

“We believe that playing a more active role will support the entire gold supply chain,” Xin added. 

The World Gold Council last month described the decision of the People’s Bank of China to increase its gold holdings by 57% to 1 658 t as “an overwhelmingly positive signal” and spoke of gold demand in China being set to grow by at least 20% by the end of 2017.

Higher second-half demand, the council said at the time, was also expected in India.

In the US, retail investors struck an early second-half high note by buying 170 000 oz of American Eagle gold coins from the US Mint, the highest in more than two years.

The council also expects the central bank trend of 18 quarters of net gold purchases to continue going forward.

On the supply side, recycling of gold seems set to remain down and mine production to taper off as gold mining companies optimise their operations and rationalise their costs.