Producing member companies of the Chamber of Mines returned US$3.67 billion out of US$5.14 billion in mineral revenue to the country, representing a 71 percent of the revenue of producing member companies, a report finds.
Of this amount, a sizeable proportion of mineral revenue was returned exclusively via commercial banks. “[This was] more than the statutory threshold required in the various Development Agreements as well as the Minerals and Mining Act 2006 (Act 703),” the President of the Chamber of mines, Eric Asubonteng intimated.
Concerning use of companies’ mineral revenues, inputs were largely sourced from local manufacturers and suppliers, the report indicates. This was to establish the pledge of mining companies to engage local partners more adequately in the mining value chain.
Accordingly, US$4.387 billion as expenses incurred by mining companies went into payments to local manufacturers and suppliers of goods and services, taxes, and financing of social investment projects. This represented 85.7 percent of mining companies’ expenditure retained in Ghana.
“As a Chamber, we will continue to stimulate local participation in the inputs market to create jobs and increase value to grow the economy,” Eric Asubonteng assured.
Mineral Revenue obtained during the reviewed period
Overall proceeds from mineral exports as of the 2020 fiscal year exceeded 2019 figures by US$32 million. This likely aided the bullish run of gold prices, as many investors restructured their portfolio into holding more gold. In August, for instance, gold sold as high as US$2,067 per ounce.
As such gold prices were on the upside for the whole year. This aided in padding mineral royalty revenue to GHS2.139 billion in 2020. It reflects a 38.20 percent increase in mineral royalty revenue from GHS1.007 billion in 2019 to GHS1.391 billion in 2020.
However, corporate income tax declined from GHS2.269 billion in GHS2.139 billion in 2020. Similarly, employee income tax also declined from GHS736.256 million to GHS641.868 million.
Additionally, other sources of mineral revenue from the sector fell from GHS674, 312 in 2019 to GHS557.868 in 2020. The share of mining and quarrying in domestic receipts was 18.1% in 2020 slightly below that of 2019 at 18.3%.
Production capacity of mining companies in 2020
Despite the fact that the contribution of the minerals sector to domestic revenue upped to GHS4.172 billion in 2020 from GHS4.013 billion in 2019, the performance of the minerals sector muted in 2020.
The total volume of gold produced declined from 4.577 million ounces in 2019 to 4.023 million ounces in 2020. Although, the country’s production declined, so did that of its rival, South Africa also declined. Thus, Ghana’s position as the leading producing producer of gold remains unchanged.
Meanwhile, the fall in production remained softer compared with those other jurisdictions. This was due to the commencement of production at the Obuasi Mine of AngloGold Ashanti. Also, growth in the output at Gold Fields’ operations as well as the Wassa Mine of Golden Star Resources.
“Ghana continued to hold on to its position as the largest producer of gold in Africa and the sixth in the world even though the country recorded a decline in output by 12.1 per cent. Ghana’s closest rival and long-term leading producer, South Africa, also recorded a 13.7 per cent decline in production at 91 tonnes and remained in second place on the continent and tenth globally.”
Eric Asubonteng, President, Chamber of Mines
