As quality mineral reserves continue to decelerate and grow thinner, spurred by the world's increasing urbanisation and technological advancements, the very miners that capitalised on these reserves will face jumping operating costs to double in the next five to ten years.

"The market is surging and industry's unable to deliver," Mark Cutifani, the CEO of gold producer AngloGold Ashanti Ltd., said on Tuesday in an event in Minas Gerais state in Brazil.

"The world's growing three per cent a year, driven largely by Asia, and the mining industry has been left behind."

The increasing depth of mines, deteriorating ore grades and access limitations to new mineral reserves because of political and geographical reasons have brought the current mining inflation rate, according to Mr Cutifani, between 3 per cent to 4 per cent above consumer inflation.

The rapidly accelerating global demand for commodities, particularly from Asia, has pushed the commodity price inflation over the last 10 years. But supplies have diminished because base metals and minerals could not immediately self-renew and keep up with the demand. This has led to the recent so-called supercycle, according to Mr Cutifani.

Ore grades of gold and base metals have declined between 1 per cent and 5 per cent a year.

In 10 years time, according to the executive, all mines will be 400 meters deeper than at present and 70 per cent more material will need to be shifted to get to the ore.

Mr Cutifani also noted that mining inflation could worsen in coming years brought by difficulties faced in developing new mines in Africa. The region still holds some 40 per cent of the world's untapped minerals reserves.

The AngloGold Ashanti Ltd. executive said miners need to invest on new technologies to aid the industry against these difficulties, noting the mining industry lags behind as far as research and development is concerned. Compared to the oil and gas sector which has invested 2 per cent in research and development, the mining industry has only spent 0.2 per cent of its gross revenues on research and development.

AngloGold Ashanti, which has mines in South Africa, is currently working on a new prototype large-scale underground drilling mechanism that will mine gold at a depth of below 5,000 meters from 2014, compared with the 4,000 meter limit at present.

"If we don't find a solution to mining below 5,000 meters we don't have mines," he said.

The underground drilling mechanism will entail using a tunnelling method to extract the ore, rather than explosives.