How deep will China go as it aims to boost gold production by more than 5%?

China plans to use new mining technology and also dig deeper to increase gold production over the next three years as demand for the precious metal soars amid rising geopolitical tensions.

In the 2025-2027 gold industry development action plan released on Monday, the Ministry of Industry and Information Technology and eight other agencies pledged to increase China’s gold reserves by 5 to 10 per cent and also raise gold output by more than 5 per cent.

“Gold is a strategic mineral resource with both commodity and currency attributes, and it is of great significance to maintaining national industrial and financial security,” the ministry said in a news release posted on its website.

It said China’s gold industry still faces significant challenges, such as insufficient resource security and difficulties in meeting demand from key technologies.

“The action plan is set to promote the high-quality development and high-level safety of the gold industry,” the ministry said.

China has been the world’s top gold consumer for 12 years, according to the China Gold Association, which said 985.31 tonnes were bought last year. Gold output stood at 377.24 tonnes last year, extending China’s record as the world’s largest producer to 18 years.

The world’s second-largest economy depends on imports to fill the gap between production and consumption. In April, China’s gold imports rose to an 11-month high of 127.5 tonnes, Chinese customs data showed.

The People’s Bank of China’s gold reserves stood at 2,296.37 tonnes at the end of last month, with the country’s central bank having increased them for seven consecutive months.

The action plan calls for over 70 per cent of the country’s gold-processing capacity to come from mines that process more than 500 tonnes of gold ore a day.