In 2008, overall revenues from the Ghanaian mining sector reached US$2.3bn

July 29, 2009 - PRLog -- 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 (Ghana), 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% 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; that 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.

Frequent disruption to power supplies is another challenge and continues to escalate operating costs in mining operations. In June 2008, the Ghanaian cabinet gave the go-ahead for the country to develop a nuclear power sector. If realised, the new plant will diversify the country’s power sector and offer the boost in generation that Ghana requires to meet demand.

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