The current surge in gold’s price has left most of the gold miners very happy because of the high earns which have been derived from it. The surge which hit a record of $2,000 per ounce has however reduced by two per cent in the past two days but is still in a good state.
The impact of the pandemic hit many sectors and minerals, thereby making the price of gold to continue to be beneficial to the sector because of the high earns it gains.
As the price is stabilizing and more gains are being made by the sector, The Chief Executive Officer of the Ghana Chamber of Mines, Sulemanu Koney is however of the view that, if Ghana had provided more incentives to attract investment into the mining industry the country would have earned more from the rising price of the precious mineral.
In an interaction with the media, Mr. Koney lamented that if explorations were incentivized, new investment would have been attracted boosting mineral production.
“Imagine if we had incentivized exploration and attracted new investment, we would at least be having some new mines that will boost our mineral production. This will be mutually beneficial for both the state and mining firms, especially now that the appetite for gold has increased and prices doing quite well.”
Ghana, one of Africa’s biggest gold producer is yet to attract new investors to develop new mines to help boost production and maintain the lead role as it surpassed South Africa to become the leading gold producer on the continent.
The revival of Anglogold Ashanti’s Obuasi mine, is also expected to boost production of Gold for this year after six years of it being shut down. Despite total output contracting four percent to 4.57 million ounces, compared with the 4.79 million ounces realized in 2018, gold export receipts stood at US$6.23 billion last year.
Gold Price Surge
Gold rallied past $2,000 per ounce for the first time ever, with spot prices jumping as high as $2,041 per ounce last week.
The metal’s spectacular rally was said to be as a result of a weakening dollar, which makes it cheaper for foreign investors to buy gold, as well as rock-bottom yields on other safe-haven assets like US Treasuries.
Due to this some investors who feared that trillions in unprecedented stimulus from central banks could feed long-dormant inflationary pressures, were seen turning to gold for protection.
The price of the commodity is said to have risen in value by a fifth since the outbreak of the COVID-19 pandemic supported by the soured US-China relations, as investors moved away from high-risk ventures to a safe haven.
The Ghana Mining Industry
In 2019, the mining industry accounted for 9 percent of Ghana’s GDP, of which gold contributed over 90 percent of the country’s total mineral export
The Ghana Chamber of Mines also reported in 2019 that investment in exploration in Ghana’s mining industry had reduced significantly and urged the government to remove the VAT on exploration inputs to attract investment.
Mining companies described the 12.5 percent VAT, 2.5 percent NHIL and the 2.5 GETFund levy 2.5 as a deterrent to venturing into exploration in the country.
It is reported also that Ghana is losing prospective mining investors to neighbouring Burkina Faso and Ivory Coast due to unfavourable tax regime such as the VAT component on exploration.
