Ghana likely to meet gold revenue target despite Covid-19
The CEO of Chamber of Mines Sulemanu Koney says he is confident that Ghana is going to meet its gold revenue and production target for 2020.
According to Koney during a media interaction on Monday in Accra, the gold industry has made good gains despite the negative impact of Covid-19 on many companies in the country.
We are quite confident that we would, as a country. Our expectation is that we will do much better this year than last year. If nothing at all, just Anglo Gold Ashanti coming into the mix certainly will improve production.”
AngloGold Ashanti poured its first gold at the Obuasi Gold Mine in December 2019, signalling its successful redevelopment into a modern, mechanised mining operation. As the second phase of the redevelopment project continues, AngloGold Ashanti estimates mining at a rate of 2,000 tonnes of gold bearing ore per day from Obuasi during 2020, climbing to 4,000 tonnes per day by year-end.
Obuasi, which has been primarily an underground operation, was placed on care and maintenance in 2016 pending the commencement of the redevelopment project. In June 2018, the Parliament of Ghana ratified the regulatory and fiscal agreements that cover the redevelopment of the mine and the Environmental Protection Agency issued environmental permits.
The outbreak of the coronavirus pandemic at the beginning of the year led to the shutdown of many companies across the country. However, most mining companies in Ghana were in operation but with strict adherence to the Covid-19 preventive protocols.
Sulemanu Koney acknowledged that the increase in the prices of gold on the world market during the pandemic has contributed significantly to the gains of the gold sector and this has increased the inflow of foreign exchange into Ghana’s economy.
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To be sure, physical demand for gold in major economies, interest rate cuts by the US Federal Reserve and increased global policy uncertainty led to the increase in gold prices.
Gold prices in 2020 are projected to improve by 5.80% to US$1,470 per fine. Gold prices are, however, forecasted to decline by an average of 1.2% over the medium-term from 2021 to 2024.
Gold prices rose 12.60% in third quarter of 2019, following three consecutive quarterly gains. Prices have been supported by strong physical demand, interest rate cuts by the US Federal Reserve, and increased global policy uncertainty. Increased demand for gold has been led by central bank purchases, investor holdings in gold-backed exchange traded funds, and jewellery sales, especially in India.
He however said that despite the country’s good gains, some companies may not have the flexibility to take advantage of the increased price of gold due to their operating structure.
Companies are wrapping up and the price of gold is healthy. Of course, it is not all companies who have the flexibility to ramp upon the back of the price of gold. Some are quite rigid in their structure. For those companies it will take a little bit of time,” he said.
Sulemanu Koney said that the Chamber is looking forward to seeing a thriving mining industry as production increases. This will help contribute to the improvement of the general economy.
Gold export receipts in 2019 amounted to US$4,647.3 million compared to US$4,281.0 million during the same period in 2018. This growth was due to increase in both volume and price. The volume of gold exported increased by 3.3 per cent, from US$3.31 million fine ounce to 3.42 million fine ounces. The average realized price, also increased by 5.1 percent, from US$1,290.3 per fine ounce to US$1,358.7 per fine ounce.
Source: Kofi Ahovi
