Ghana: Gold Output to Increase to 3 Million Ounces This Year

Ghana: Gold Output to Increase to 3 Million Ounces This Year

By Kingsley Asare

Gold output of the producing member companies of the Ghana Chamber of Mines is projected to increase to three million in 2022.

The volume of gold attributable to producers in Ghana declined from 4.022 million ounces in 2020 to 2.818 million ounces in 2021, representing a reduction of 29.92 per cent.

The fall in production made Ghana to lose its top position to South Africa, as the largest gold producer in Africa.

The Chief Executive Officer of the Ghana Chamber of Mines, Dr Sulemanu Koney, who disclosed this at a media workshop on the performance of the mining industry in 2021, said the output level in 2021 was the lowest since 2008.

“The fall in production was due to a combination of concurrent reductions in the output of both large and small-scale gold producers,” he said.

Dr Koney stressed that “In 2022, we expect most of the mines to operate at a steady-state level.”

He said the production of manganese was expected to increase to about five million tonnes in 2022.

“The volume of manganese produced by Ghana Manganese Company expanded from 2.357 million tonnes in 2020 to 3.336 million tonnes in 2021, a growth rate of 41.52 per cent,” he said.

The GCM CEO said the upturn in production was reflective of the recovery of the firm from the impacts of the “stop and start orders” issued by the government in 2020.

He said the mine did not produce in the first quarter of 2020.

In 2021, Ghana recorded a string of steep declines in the outturns of production and purchases of its traditional minerals, with manganese and diamond being the sole outliers.

Total production attributed to small-scale producers declined from 1.175 million ounces in 2020 to 98,001 ounces in 2021, representing a fall of 91.66 per cent.

“The near-collapse in the sub-sector’s official output was driven principally by the imposition of a withholding tax on gold exports,” Dr Koney said.

Dr Koney said in 2021, the producing member companies spent US$ 3.984 billion of their mineral revenue in-country, which translates into 67.6 per cent of mineral revenue.

He said the mining sector is one of the largest sources of direct domestic fiscal receipts mobilised by the Ghana Revenue Authority.

“The total direct domestic fiscal contributions of the producing member companies of the Chamber increased from GH¢ 3.973 billion in 2020 to GH¢ 4.611 billion in 2021, an expansion of 16.05 per cent,” Dr Koney, said.

He said the growth in fiscal payments was due to an increase in all direct tax types.

The producing member companies accounted for 16.48 per cent of total direct domestic revenue in 2021 as compared to 18.1 per cent in 2020.

Dr Koney called on the government to put measures in place to reduce the cost of mining in the country.

He said in the mining sector, the cost of producing an ounce of gold was proxied by the All-In-Sustaining Cost (AISC), a measure of production and other costs related to sustaining current gold production and capital expenditure.

Dr Koney said average the AISC per ounce of the Chamber’s producing member companies increased from US$ 1,190 per ounce in 2020 to US$ 1,418 per ounce in 2021.

The comparable cost at the global level was US$ 1,068 per ounce in 2021.

He said the 24.39 per cent increase in production cost was attributable to a broad increase in the AISC of gold-producing member companies.

Dr Koney said the high cost in mining in the country was attributable to the high cost of diesel.

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