PRLog (Press Release) -
Apr 06, 2010 -
In November 2009, local media reported that the Minister for Trade and Industry, Hannah Tetteh, had stated the government's intention to reopen the state-run Volta Aluminium Company Limited (VALCO)
, following its closure in January 2009, as a result of the global credit crunch. Not only have prices for aluminium rebounded in recent months, but water levels in the Volta Lake have risen back above 270 feet, which will enable the company to make use of hydroelectric power. The minister said that when fully operational, VALCO could inject some US$300mn into the Ghanaian economy and that she hoped to announce a date for the restarting of operations at VALCO by the end of Q110. New Data For 2010, BMI has made significant changes to the way in which we forecast mining data. As well as using local statistics agencies and associations, we now also draw on the expertise of the UN's Industrial Commodity Statistics Database, the US Geological Survey and the World Bureau of Metal Statistics for our historical export and production data. We then forecast this data using our own proprietary econometric model. Human intervention also plays a necessary and desirable role in our mining forecasting;
experience, expertise and knowledge of industry trends and developments ensuring that we can spot likely future changes and anomalous data that a purely mechanical model would not. Country Overview Ghana contains the second largest area of gold deposits in the African region after South Africa. The nation 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 and diamonds. The country is also counted among the top five nations across the globe for its manganese ore production. Ghana is home to some of the biggest names from the global extractive industry: Gold Fields, Newmont Ghana and South Africa's AngloGold Ashanti. In 2008, overall revenues from the Ghanaian mining sector reached US$2.3bn, an increase of 28% yearon- year (y-o-y), according to figures released by the Ghana Chamber of Mines in June 2009. Gold revenues stood at US$2.2bn, with output of 2.6mn oz (up 4% y-o-y) selling at an average realised price of US$852 per oz. Manganese revenue was up by a stellar 69%, to US$62.34mn, while bauxite revenue was essentially flat, at US$19.81mn. Looking forward, Chamber of Mines President, Jurgen Eijgendaal, said that 2009 would be a mixed year for Ghana's mining industry. He expects gold to perform well, while bauxite and manganese exports could fall as a result of a decline in demand. Though the mining industry has been successful in attracting foreign capital, it has also been subject to criticism from the Ghanaian government, environmentalists and human rights activists. Foreign players have been known to exploit legal loopholes and abuse both human rights, as well as the environment. However, stakeholders in the mining sector claim that regulations pertaining to compensation need to be updated, as the price levels for valuing crops, livestock and landed property have not been reviewed for a number of years. They also point out that in other African countries, such as Tanzania, the state pays the compensation and not the miner. The basic law governing the mining industry is the Minerals and Mining Act 2006 (Act 703). Under the law, the president holds the power to grant mining rights. However, the pressure to amend the law and allow farmers to have a say in authorising their lands for mining activity is increasingly gaining favour in the country, and is being seen as a necessary move to crack down on the rampant exploitation of the environment by mining industries. Industry Forecast Ghana's mining sector holds great potential. The country is regarded as stable, with clear regulatory standards governing the industry. Ghana is already Africa's second largest producer and exporter of gold, and is among the global top-five in manganese ore production. Moreover, with gold being Ghana's principal mining asset and prices remaining strong, forecasts for the mining sector in Ghana are more positive than those of some of its African neighbours. In calculating its forecasts, BMI has also taken account of the vast untapped potential of Ghana's mining industry. As such, we expect the value of the mining industry to increase from US$0.64bn in 2009 to US$1.68bn in 2014.
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