Gold exports to yield $10bn by year end

The Minerals Commission has projected that gold exports from the country will yield $10 billion by end of year on account of higher exports, including more from small-scale mining, and higher prices of the commodity.

While gold exports recorded $5 billion in the first half of this year amid record high prices, small-scale mining exports of gold also rose, contributing $1.7 billion to the receipts. The Minerals Commission said the record gold price, especially in the second quarter of 2024, had positively impacted on the foreign exchange earnings of the country. 

BoG data

Referring to the summary of the economic and financial data from the Bank of Ghana (BoG), the Chief Executive Officer (CEO) of the Minerals Commission, Martin Kwaku Ayisi, told the Daily Graphic out of the total exports of $9.2 billion for the first-half of 2024, gold alone was $5 billion, accounting for 54 per cent between January and June, adding “this was because of the surge in gold prices in 2024”.

Prices of the yellow metal averaged a record $2,338 an ounce in the second quarter, 18 per cent higher year-on-year and 13 per cent higher quarter-on-quarter. The average price of gold for the month of July is about $2,396 an ounce. Gold reached a new record of $2,482 an ounce on July 17.

Mr Ayisi in a media interview predicted that if the price of gold stayed around that average for July or the second quarter, then the full-year outlook suggested that receipts from gold might reach $10 billion or cross it.

The CEO stated that the exports from small-scale mining for the first half of this year was about $1.7 billion and accounted for about 36 per cent of the gold exported by mid-year. He predicted that on the back of the record price, exports from small-scale mining may be more than $3 billion by the end of the year.

Backbone

Mr Ayisi said the rise in revenue from gold reinforced the fact that the mining sector remained the backbone of Ghana’s economy and was likely to remain so for decades to come, as four new major mines would come on stream within the next three years.

He mentioned them as the Cardinal Namdini Gold Mine in the Talensi District in the Upper East Region, which is set to be commissioned in November this year and the Ahafo North mine of Newmont Ghana Gold Ltd due to be operational in the middle of next year.  

The other two operations are the gold project of Azumah Resources Ltd in the Upper West, and the proposed lithium mine of Atlantic Lithium Ltd at Ewoyaa in the Central Region. He said both mines were expected to be commissioned in 2026. 

Value addition

Mr Ayisi, however, reiterated his refrain that the real benefits of mining to the economy lay in the value addition to the various minerals. He cited the case of lithium and manganese which had been exported in their raw forms since 1916.

Following the policy of the government on value addition, he said, the Ghana Manganese Company would construct a $450-million refinery to refine manganese ore.  “This will upgrade the grade from 27 per cent to 40 per cent and create an additional 350 jobs and contribute to revenue,” Mr Ayisi explained.

Local content

The CEO of the Minerals Commission also referred to the new measures that had been put in place in the area of local content and local participation to ensure that over $2 billion that was spent by the mining companies on local supplies and services were undertaken by Ghanaians.

Mr Ayisi further mentioned the efforts being made by the government to ensure that mining companies list on the Ghana Stock Exchange to raise capital for mining projects. He lauded the work of the Minerals Income Investment Fund (MIIF) to take equity stakes in mines as a way to indigenise the sector.

Mr Ayisi called for better environmental management of small-scale mining, which was carried out in about 12 regions which supports about three million livelihoods, to ensure that the environmental destruction currently being witnessed as a result of illegal mining was mitigated.