The moratorium placed on small-scale mining in Ghana will drive down the country’s gold output for 2017, Sulemanu Koney, Chief Executive Officer (CEO) of the Ghana Chamber of Mines hinted here on Thursday.
Addressing a session on Deepening the Integration of the Mining Industry into the Non-Mineral Economy, Koney pointed out that although the Chamber which comprises large scale mining companies in the country was supportive of the anti-illegal mining drive by government, it is also mindful of the impact on overall output for the country.
While total gold output for the West African country rose 46 percent to a 40-year high of 4.13 million ounces in 2016 compared to the 2.84 million ounces recorded for the previous year, the value rose 55 percent to 5.15 billion U.S. dollars relative to the 3.32 billion dollars realized in 2015.
According to the CEO, the upswing in the output for 2016 was mainly due to an upsurge in the production numbers of artisanal mining last year, hence the drop in artisanal mining this year will negatively impact on the country’s total output.
The government announced in April a six-month moratorium on small-scale mining in its efforts to cleanse the mining sector of illegal miners.
“A check from the Precious Minerals Marketing Company (PMMC) indicated that their purchases have declined by about 70 percent,” Koney noted, adding that this will significantly affect production numbers for this year.
Koney also indicated that Ghana was fast losing its enviable position as a destination of investment into mineral exploration due to what he described as ‘punitive’ taxes explorers pay on some of their inputs.
“Exploration provides the pipeline of projects which will ensure the sustainability of the mining industry, but exploration is risky with global success rates standing between 10 percent and 20 percent,” he observed.
With the tax regime in place, Koney said investors now see Ghana as too expensive for investment, warning that the country risked losing its place as second largest gold producer on the continent after South Africa.
He urged that government should rather channel more energy towards developing the entire value chain of the mining sector to make it more beneficial to the economy.
“Mining is about development and not just revenue. We need to leverage the mining industry for broad based socio-economic development through the optimal harnessing of opportunities in its value chain,” he stressed. Enditem