Price of gold to remain under pressure – Chamber of Mines

President of the Ghana Chamber of Mines, Mr. Kwame Addo-Kufuor, expects the price of gold to remain under pressure for most parts of 2016.

This, he explained, will be largely due to the US Federal Reserve Bank easing its quantitative monetary programme.

“Since this is likely to trigger a rise in interest rates of near money assets, investors are likely to redirect their portfolio away from gold.

Speaking at the miner’s annual general meeting in Accra, Mr. Kufuor explained that fresh output from Asanko Mine and Golden Star Wassa’s underground mine is expected to increase the gold industry’s output in 2016.

“All things being equal, in the same vein, the normalisation of purchases by the prime client of the Ghana Manganese Company is expected to increase the company’s shipments in 2016.”

Commenting on the activities of illegal miner’s in concessions of certain large mines in the country which have become a serious source of concern, Mr. Kufuor explained that the illegal mining activities have resulted in some safety-related incidents, destruction of arable lands and pollution to water-bodies, adding that government responded to this security threat by setting up a National Security Committee on Lands and Natural Resources as well as amending some portions of the Minerals and Mining Act,2006 (Act 703).

These legal frameworks, together with other initiatives by these agencies, he said, have been initiated to address the scale of illegal mining across the country.

On the development of mining communities, he said, communities tend to be in remote locations and lag behind in social and economic infrastructure. “This has not been helped by the warped mechanism for distributing mineral revenue, which tends to channel a large share of this revenue to the Consolidated Fund -- thereby short-changing the very communities who bear the brunt of our operations.

“On account of the crowded fiscal space, the spending pattern of government does not necessarily accrue to the benefit of mining communities. As a result, the standard of living in such areas is relatively lower than non-mining areas, and therefore paints negative picture of the mining industry.”

He indicated that while recognising that the sector-ministry and Minerals Commission are working to address the poor developmental conditions through the Minerals Development Fund Act, the Chamber urges that the share of royalty ploughed into the communities should be increased from the current rate of nine percent to 30 percent.

“Likewise, we urge government to promulgate a Mineral Revenue Management Act - a law that will guide and ensure prudent management and expenditure of mineral revenue returned to the communities.”

Commenting on policy issues in the mining sector, he said the Chamber received support from the Ministry of Lands and Natural Resources, Minerals Commission and other regulatory agencies - which went a long way in assisting the achievement of targets this year.

“In particular we commend the new Minerals and Mining Policy, which seeks to ensure that mining contributes to the structural transformation of the economy by linking it with other sectors to catalyse sustainable development. The Chamber will support government in the implementation of this policy,” he said.

Mr. Addo-Kufuor indicated that the Chamber and its members remain committed to the highest standards of health and safety in operations. “This extends through to our host communities; in the fight against malaria, for instance, the specific initiatives being undertaken have been extended to the nation as a whole through various activities of the member-companies.”

He added: “The Chamber effectively provided mining-related information to international and local institutions and individuals as a way of improving its mutually advantageous collaboration with civil society, academia, and the general public.

“The Chamber in 2015 continued to work assiduously in promoting Ghana as the preferred mining jurisdiction to investors by collaborating with government,” he remarked.