Gold output up 32% as country returns to top spot

Domestic gold production went up 32 percent from 2.8 million ounces in 2021 to 3.7 million ounces in 2022, propelling the country to the summit as Africa’s largest producer of precious yellow metal.

The increase, the Ghana Chamber of Mines (GCM) explains, is attributed to a combination of fresh output and expansion of production at existing large-scale mines.

Production from the large-scale sector rose from 2.7 million ounces in 2021 to 3.1 million ounces in 2022, representing an increment of 13 percent – the highest in history, with the small-scale sector accounting for the remainder.

“The Chamber’s producing member companies contributed 3.0 million ounces of the large-scale gold output, with the remaining 35,421 ounces declared as being attributable to non-chamber member large-scale mines in the same year,” Joshua Mortoti, GCM’s president said at the 95th annual general meeting of the Chamber in Accra.

“In the preceding year, the corresponding outputs of the Chamber and non-Chamber mines were 2.7 million ounces and 9,631 ounces respectively. This implies that output from the Chamber’s producing mines and other large-scale mines rose by 12 percent and 268 percent on a year-on-year basis.

“The Chamber’s share of the large-scale gold sector’s output was 99.6 percent in 2021 and 98.8 percent in 2022,” he stated.

Furthermore, GCM producing members, at the national level, accounted for 81.5 percent of aggregate gold production in 2022 as compared to 96.2 percent in 2021; whereas the other large-scale mines’ share rose from 0.3 percent to 0.9 percent within the same period.

Meanwhile, the recent upturn in export of diamonds persisted in 2022 with an expansion in the volumes from 54,174 carats in 2021 to 82,252 carats in 2022. On a year-on-year basis, the volume of diamond exports improved by 52 percent.

The output of manganese however fell from 3.3 million tonnes in 2021 to 3.2 million tonnes in 2022. In the same manner, the production of bauxite reduced from 0.839 million tonnes in 2021 to 0.773 million tonnes in 2022.

On the fiscal level, the minerals and mining quarrying sector was adjudged to be the largest contributor to direct domestic taxes by the Ghana Revenue Authority (GRA) in 2022.

The sector’s fiscal payments amounted to GH₵6.380billion, which represents 18.6 percent of aggregate direct domestic tax receipts.

Commenting on this, Mr. Mortoti said: “The impost receipts comprised corporate income tax (CIT) of GH₵3.580billion, mineral royalties of GH₵1.796billion, employee income tax (PAYE) of GH₵1.002billion and a residual impost revenue of GH₵1.108million”.

Furthermore, he noted that due to the upturn in export revenue, the minerals sector consolidated its position as the country’s largest source of forex in 2022.

Data from the Bank of Ghana also suggest that mineral export revenue outstripped proceeds from the export of crude oil and cocoa, as well as inward remittances in 2022.

Outlook

Moreover, the planned gold production of the Chamber’s producing members is expected to reach 3.2 million ounces at the end of 2023.

According to the Chamber’s president: “This projected growth in production will be driven by a broad-based increase in output. Overall, the country’s gold output is projected to range between 3.3 and 3.5 million ounces in 2023. In the same breath, the Ghana Manganese Company plans to ramp up production from 3.2 million tonnes to 5 million tonnes in 2023”.

Rising insecurity

Despite the upturn in output, the Chamber bemoaned rising attacks on mining installations across the country, which it noted could dampen production guidance if not addressed.

Security at the mines, the GCM says, has become a major problem in the mining industry, adding: “These attackers have become more confident and emboldened by the lack of action and apparent slowness in the pace of prosecution at the law courts.

“As a country seeking to become the hub of mining in Africa, it is imperative that we take the issue of security more seriously to reaffirm our commitment to sustainable development,” Mortoti, added.

Also, he said the introduction of Growth and Sustainability Levy (GSL) on extractive sector companies could have a pyrrhic effect for the GRA as the collector, and for the state’s general revenue objectives.