Gold price to remain under pressure —-Chamber of Mines

goldThe Ghana Chamber of Mines says it expects gold price to remain under pressure for most part of 2016 as the US Federal Reserve Bank eases its quantitative monetary programme.

This, the Chamber said, was likely to lead to a rise in interest rates of near money assets and a shift in investors’ portfolio away from gold, adding however that expected reduction in global gold output could moderate the impact of the US policy.  

Mr Kwame Addo-Kufuor, President of the Chamber of Mines, speaking at the 88th annual general meeting of members in Accra, however, stated that fresh output from Asanko mine and Golden Star Wassa’s underground mine is expected to increase the gold industry’s output in 2016 while Ghana Manganese Company is expected to increase its shipments.

He said mineral revenue of producing members fell nearly 14 per cent to $3.39 billion in 2015 down from $3.94 billion the previous year.

The drop in the mineral revenue, he explained, was due to reduced production and the lower gold price as well as decline in shipments of manganese.

He said while manganese shipments recorded a dip of five per cent, the volume of gold exports also reduced by 10 per cent.

“2015 was quite a difficult one for the mining industry in many respects.  While the economy experienced a power crisis, mining companies had to manage falling commodity prices with increase in operational costs,” he said.

Gold revenue, which accounts for most of the mineral revenue, fell from about US$3.84 billion in 2014 to about US$3.32 billion in 2015, triggered by a dip in output and purchases.

Total gold output dropped from 3.1 million ounces in 2014 to 2.8 million ounces in 2015 as a result of declines in production at some large-scale mines, including AngloGold Ashanti Obuasi, Newmont Ahafo and Golden Star Bogoso Prestea, and lower purchases by ASAP VASA.

Similarly, the export of manganese reduced from 1.35 million tons to 1.28 million tons in 2015 while purchases of diamond by Precious Minerals and Marketing Company decreased by 28 per cent to 174,000 carats from 240,000 carats in 2014.

The Minister of Lands and Natural Resources Nii Osah Mills commended the mining sector’s contribution to the economy over the years, especially in the area of job creation and support for government’s national development agenda and sustainability programmes.

He encouraged the mining companies to invest in the exploitation of the other mineral resources, including iron ore, solar salt and silica and granite.

Nii Mills said to encourage more exploration and exploitation of minerals, airborne geophysical survey and geological mapping had been conducted in various parts of the country and urged prospective investors to take advantage of the information to carry out further exploration.

The minister announced that the Minerals and Mining Policy had been finally unveiled adding that the policy had been introduced to address various concerns in the mining industry.

“It is expected that the provisions contained in the policy, dubbed “Ensuring Mining contributes to sustainable development” will guide the ministry and its agencies in the management of natural resources of the nation,” he said.

The AGM was held on the theme: “Sustaining mining and power investments: Meeting stakeholder expectations in a challenging global environment.”

By David Adadevoh

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