Smuggling biggest threat to gold for oil policy – PMMC

The activities of smugglers remain a major threat to success of the country’s novel ‘gold for oil’ exchange programme, the Precious Minerals Marketing Company (PMMC) has warned.

The barter programme seeks to accumulate domestically mined gold in exchange for finished petroleum products in a bid to address currency depreciation; but state-owned PMMC, a key value chain player, believes that the activities of gold smugglers, if not checked, could undermine its success.

“We note that a major threat to successful implementation of the programme is the activities of smugglers. Consequently, the security agencies have been engaged to intensify anti-smuggling operations,” it said in a statement.

For instance, the PMMC last year indicated that the nation had – between May 2020 and the end of 2021 – lost as much as 90 percent of foreign capital from gold proceeds due to unauthorised and illegal export of the precious yellow metal.

More troubling is the sector ministry’s admission that analyses of gold export trade data between Ghana and its major trading partner-nations in 2019 showed that, at least, US$9billion of expected gold receipts remain unaccounted for.

To address the situation, the statement noted that a key stakeholder collaboration with the Minerals Commission and security agencies – including the anti-gold smuggling taskforce constituted by the Ministry of Lands and Natural Resources – to ensure minimal losses of the yellow metal is being pursued.

In addition to the intensified security actions, PMMC stated that it will continue to establish offices across the nation, particularly in mining-intensive regions, to serve as collection points for gold which is to be used in the programme while seeking the active participation of relevant stakeholders.

“All existing gold trading and export licence holders – implementing partners – shall continue their usual business activities except that the gold so purchased by them from the small-scale sector shall not be exported. The gold purchased by the implementing partners shall be sold to PMMC,” the statement read in part.

“For purposes of implementation, persons who wish to sell to PMMC shall be required to deliver their gold in whole bars of 5kg at any of the PMMC Offices – either at Patasi, Kumasi or Diamond House, Accra – where the bars will be assayed and payment effected on the spot. Any other trader with gold below 5kg shall be required to sell to any of the implementing partners,” it continued.

The company added that licence holders that already have contracts in place to provide gold outside the country must write to it and provide proof of those commitments: upon which PMMC will work with those businesses to ensure that their commitments are fully met.

Already, the first consignment of oil under the policy – aimed at reducing the country’s fast-depleting foreign reserves position, especially in the current erratic market – has arrived in the country.