Prospects are Glittering

Gold Mining: Exports are up, but a refinery would boost the sector's value

Gold production in Ghana has grown from 282,000 ounces a year in 1984 to 2.55 million ounces last year. Despite price fluctuations, gold exports rose from $579 million (£361 million) in 1997 to $710 million last year. It is projected to reach $784 million this year.

These profits were achieved, says Dr John Abu, the Minister of Mines, by drastic cuts in operational costs, more efficient mining practices and laying off employees. Production costs of less than $200 an ounce at many mines are among the lowest in the world.

Ghana's mining code, drawn up by the Government in collaboration with the mining companies, has been copied elsewhere in Africa. A minerals commission has been established to facilitate prospecting.

		Loading sacks of cocoa beans and below, picking the cocoa pods

The Government is also investing to improve the overall infrastructure. As a result, foreign investment to the tune of $4 billion has flowed in to fund exploration, establish new mines and rehabilitate existing ones. Ashanti Goldfields Company, which continues to dominate the industry, was brought to the edge of bankruptcy because of the effect of the price fluctuations on its price-hedging activities. But it has secured its future by selling a half share in its Tanzanian goldfield, Geita, worth $335 million.

Dr Abu believes the country needs a sizeable refinery and good jewellery industries to capture the full value of its gold mining sector. "The bulk of the gold goes out of the country for refining, is used in jewellery manufacturing and partly resold to us and purchased by Ghanaians," he says. "We also have rough diamonds. Countries which do not have any of these have been able to have good jewellery industries. This is a challenge for us."

Ghana, he adds, has good sand deposits that could support a glass industry; granite and marble for the building industry and clay deposits that could support a ceramics industry.

The mining sector's priorities that need investment, he says, are the exploitation of its Kibi bauxite deposits and its industrial minerals such as kaoline, silica sands, feldspars, limestone brown clay and dimension stones.

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