Ghana doubles small-scale gold production in H1 ‘24
Vice President Mahamudud Bawumia of Ghana
Francis KOKUTSE and Isaac AIDOO in Accra, Ghana
Ghana has doubled its small-scale gold production from 389,294.23 ounces last year to 1,003,478.04 ounces during the first half of this year, and raked in $1.77 billion following a reduction in the gold export levy from 3% to 1.5%, Vice President Mahamudu Bawumia has said.
Speaking at the inauguration of the Royal Ghana Gold Refinery (RGGL) in Accra, he said current issues of illegal mining (which has come to be called Gallamsey), pose a big threat to the value addition efforts since it had the potential of tainting the gold dore which will be fed to the refinery, thereby making it difficult to meet the responsible sourcing requirements, and by extension, the ability to operate with international certification.
“There is therefore a compelling reason, more than ever, to ensure that we nib the menace of illegal mining in the bud to ensure responsible mining and safeguard our environment and water bodies,” Vice President Bawumia said.
The refinery, is 80 percent owned by Rosy Royal Minerals Limited of India, with the remaining 20 percent owned by the Bank of Ghana and has the capacity to refine four hundred kilograms of gold dore per day and can refine 132 tonnes of gold (more than all the gold exported from Ghana) at three hundred working days per year.
Vice President Bawumia said the refinery has the capacity to meet the needs of Ghana and surrounding gold producing countries, adding that, “our domestic mines will be fully on board and make this refinery their first point of call. With that kind of support, RGGL can obtain the London Bullion Market Association (LBMA) good delivery list accreditation in three years making it the second of such refineries in Africa.”
He said he was certain that addressing the illegal mining problem does not just require political will, but also well thought through policies that are practical, adding that, he was of the firm conviction that, “while Galamsey is a menace, small-scale mining is not, and therefore the latter must be supported with the right policies.”
Vice President Bawumia said $10 million will be invested in the geological investigation of mineralised zones from 2025, adding that, “with evidence of proven reserves, we will ensure that earmarked concessions in these resource mapped areas with proven reserves will be 100% Ghanaian owned for small-scale mining.”
He said many people opt to mine without a license because of delays and bureaucracies as well as high costs in acquiring mining licenses. In order to address this, he added, “we will amend the existing mining law to ensure that the entire licensing regime from application to the grant of small-scale mining license will end at the Minerals Commission with the involvement of our chiefs and district assemblies.”
Vice President Bawumia said the government will use a comprehensive and collaborative approach to ensure strict adherence to the country’s mining laws and regulations to prevent illegal and improper mining practices such as mining near or in river bodies, the use of prohibited chemicals or equipment for mining, environmental degradation, and so on.
“While we do these to curb illegal mining, we will adopt a multilevel approach to support and enhance the operations of small-scale mining. Among the many approaches, will be the establishment of a Minerals Development Bank to provide financial resources to Indigenous Ghanaians in the sector,” he said.
Vice President Bawumia was optimistic that the multi-level approach, “will deepen the Ghanaian ownership dream and avoid situations where Ghanaians acquire mining licenses and sell to third parties because they do not have the required capital.”
He said using a phased approach and leveraging on the already established and hugely successful medium term Domestic Gold Purchasing Programme (DGPP) by the Bank of Ghana (BoG), the government will implement an enhanced due diligence scheme and significantly raise gold production standards in the long term.
“This policy will further improve the foreign reserves adequacy of the BoG to ensure adequate foreign exchange is available to meet the international trade needs and reduce external borrowing requirements of the country. Improving the BoG’s level of gross international reserves in addition to prudent fiscal and monetary policy is key to ensuring a stable Ghanaian cedi,” Vice President Bawumia added.
He said the establishment of the refinery is a strategic investment which contributes immensely to government’s efforts in ensuring value addition to the country’s mineral resources, adding that, “currently, our country’s gold is exported in dore form to be refined outside Ghana, resulting in lost revenue, and missed opportunities for job creation”.
Between 2018 and 2023, Ghana’s average annual gold production was 3.92 million ounces (111.13 tonnes). All this gold was exported unrefined, resulting in lost revenue, and missed job creation opportunities.
Ernest Addison, Governor Bank of Ghana, described the opening of the RGGL as a transformative milestone in the nation’s gold-mining industry, and estimated the projected export earnings for 2024 at nearly $10 billion.
Addison said despite the country’s century-long history of gold exports, the full economic potential of this resource has yet to be fully realised, adding that the longstanding practice of exporting raw gold without adding value locally has resulted in significant losses of revenue and job opportunities.
He said the broader economic benefits of the refinery include increased foreign exchange earnings and an improved balance of payments position, which would provide much-needed buffers against external vulnerabilities and economic shocks.
Addison said the success of the Bank of Ghana’s Domestic Gold Purchase Programme (DGPP), which had allowed the central bank to build substantial foreign exchange reserves, has helped the Bank of Ghana to purchase 65.4 tonnes of gold, valued at over $5 billion, with an additional 23 tonnes acquired in 2024 alone.