Mining sector poised for US$500m growth

A new report by the Business Monitor International (BMI) has forecasted the value of Ghana’s mining sector to reach US$3.8 billion within the next four years as bauxite and gold production see modest increases.

Last year, the value of the country’s mineral output was US$3.3 billion driven mainly by activities in the gold sector.

“Ghana is set to remain Africa's second-largest gold producer, after South Africa, as investment continues to flow into the mineral-rich country…We expect gold to be the main driver of growth, but see bauxite playing a growing role,” the report noted.

The forecasted figures are consistent with that of the Ghana Chamber of Mines- the umbrella body of major mining companies- whose figures have shown an increase in production output.

According to data from the Chamber of Mines, minerals output rose in the first half of 2014 but revenues declined due to lower prices as export revenues from gold, bauxite, diamond and manganese in the period was US$2.143 billion, down from US$2.477 billion in the first half of 2013.

Ghana contains the second largest area of gold deposits in Africa, after South Africa. The country derives the bulk of its external revenue from gold mining, which accounts for over 90% of Ghana's total mineral exports.

Apart from gold, Ghana also produces significant quantities of bauxite, manganese and diamonds, although output of the latter has seen significant declines over the past three years as mines have been closed.

Currently, falling gold prices has caused the country to slip to ninth position in leading gold producers in 2013, compared to eighth in 2012.

Mr. Daniel Owiredu, a former President of the chamber, has noted that the imminent temporary shutdown of AngloGold Ashanti’s Obuasi Mine for rehabilitation may significantly blight the fortunes of the minerals industry in 2014 -- while output at Golden Star’s Wassa Mine is projected to decline to between 130,000 and 140,000 ounces in 2014 due to ongoing rationalisation of production.

He said the downturn in gold revenue drove a percentage point reduction in the share of gold in total mineral revenue for 2013, from 97.5 percent to 96.3 percent.