Gold production hits 2.81m ounces in 2017 …rakes in US$3.68bn revenue

Gold bars

Gold production rose to 2.81 million ounces in 2017 from 2.54 million ounces in 2016, representing an increase of 10.2 percent from the previous year’s figure, latest data from the Ghana Chamber of Mines shows.

Total gold revenues amounted to US$3.68billion in 2017, up from US$3.25billion the year before. Manganese production increased to three million tonnes in 2017 from two million the year before. However, diamond output declined to 86,924 carats from 143,000 carats the previous year.

The outgoing President of the Chamber, Mr. Kwame Addo-Kufuor, presenting an overview of the mining industry’s performance in 2017 at the Chamber’s 90th annual General Meeting in Accra themed ‘A responsible and sustainable mining industry; a partner for national development’, explained that the growth was largely due to the general increase in output across most of the 12 mining firms operating in the country.

He indicated that total spend by producing member-companies on goods and services procured from in-country suppliers and manufacturers was US$l.23billion in 20l7. This represents 34 percent of realised mineral revenue and an increase on the preceding year’s spending.

“There is room for entrepreneurs in the local economy to increase their participation in the value chain,” he said.

Mr. Addo-Kufuor stated that the minerals and mining sector retained its position as the foremost source of direct domestic revenue mobilised by the Ghana Revenue Authority (GRA) in 20l7, and that the total mining fiscal receipts mobilised by the GRA increased by 31 percent – from GH¢l .65billion in 20l6 to GH¢2.l6billion in 20l7. This also translates into l6.3 percent of domestic direct revenue mobilised by the GRA in 20 I 7.

The mining sector’s 2017 fiscal performance is impressive for two main reasons: Mr. Addo-Kufuor said that all categories of payments by mining companies recorded year-on year increases, and corporate income tax receipts continue to exceed royalty payments.

“The sector’s corporate tax receipts increased by 39 percent, from GH¢696.9million in 20l6 to GH¢969.6million in 2017 while mineral royalty revenue also increased – by 28 percent to GH¢702.4million. Employee income tax (pay-as-you-earn) increased from GH¢399.9million in 20 l 6 to GH¢487.9million in 20l7, a 22 percent increase. This impressive upturn in fiscal revenue performance of the sector was primarily attributable to increased mineral production,” he said.

He indicated that the growth in mineral revenue also reflected in the mining industry’s share of total merchandise export in 20 l 7, which at 43% exceeded the contributions of both cocoa and oil.

This, he said, supported the country’s balance of payments position and helped improve its Gross International Reserve situation and its associated positive impact on stability of the Ghana cedi.

Job creation

One issue that remains critical to stakeholders in the industry is job creation. Our records show that total direct employment by the producing member-companies of the Chamber reduced from 11,628 in 20l6 to l0,503 in 2017. Out of the l0,503 direct employees 59 were expatriates, representing l.5 percent of the workforce.

Mr. Addo-Kufuor attributed the reduction in the industry’s work force mainly to the limited labour rationalisation measures undertaken by Golden Star Resources and Abosso Goldfields Limited to shift from owner- to contract-mining.

“But it is important to point out that the number of people indirectly employed by our members, including the contract mining companies I have just referred, to remains robust. There is also evidence of an appreciation of and commitment to local content on the part of various participants in the mining value chain,” he stated.

John Peter Amewu, Minister for Lands and Natural Resources whose speech was read on his behalf, noted how power is a significant and critical component in the cost of mining operations and that upon numerous engagements between government and the Chamber – as well as the commitment of this government to sustain growth of the economy – government announced a reduction in electricity tariff, with special concessions for mining companies to boost their operations.

He assured that as a business-friendly government it has the private sector’s interest at the core of its vision, and thereby aims to catalyse holistic growth and development. It will continue to dialogue with the Chamber to find win-win solutions to problems faced in the industry.

Recounting how the Chamber has partnered government in developing the Ghanaian mining industry to the level it is today over the years, Mr. Amewu said government recognises the contribution and appreciates the good work of member-companies and other large-scale mining companies, even though “we all agree that there is more room for improvement”.

“As a ministry, we will continue to partner with the Chamber to explore opportunities in the industry as well as promote linkages across the supply chain and synergies with the rest of the local economy,” he said.

This article provided by NewsEdge.