Major gold producers in the country began the year on a slow start, registering a collective lower gold throughput in Q1 2022, yet a recovery is likely to delay despite the coming online of some gold mines previously in coma.

Akin to the previous year, gold output shrank across several mine operations with total gold production from three gold producers (Gold Fields, AngloGold Ashanti, Kinross Gold mines) in the country declining in Q1 2022.

While the production glitches could partly be attributed to the indirect cost effects of the Russia-Ukraine war, barriers such as lower ore grades, the sale of assets, reduced mill throughput and lower recoveries.

Now, the Covid-19 pandemic does not appear to be a threat unlike in the first half of 2021 and companies are benefiting from increased revenues from gold sales following the rising demand of gold by investors due to its safe haven nature. The influx of new gold miners such as Asante Gold is expected to partially offset the decline in total output, as it begins production in Q3 2022.

The sale of assets such as Kinross’ Chirano gold mine to Asante Gold could also affect total production in the interim as the takeover would have to take some time as is currently the case, while also going through several processes before production eventually starts.

Decline in Gold Output in Q1 2022

Analyzing Ghana’s export of gold, Fitch Solutions noted the importance of Asante Gold’s production onstream to Ghana’s total production portfolio highlighting that:

“…Headwinds to exports will be somewhat tempered by stronger gold production, which will be supported by the recommissioning of the Bibiani gold mine – expected to start its first gold pour in Q3 2022- and the government’s efforts to curtail illicit mining activities.”
Fitch Solutions

In Q1 2022, AngloGold Ashanti’s bounce back to operations after it underwent a suspension of its Obuasi gold mine still kept its production below that of the same period last year. The company’s Obuasi mine produced 38,000 tonnes of gold in Q1 2022 compared to 46,000 tonnes in the previous year while its Iduapriem mine produced 51,000 ounces of gold at the end of Q1 2022.

AngloGold Ashanti’s Chief Executive Officer Alberto Calderon, said:

“We’re starting to achieve our main catalysts. There’s still a long way to go, but we’re starting to see an improving operational performance across the portfolio, underpinned by a more focused operating culture and a better grade profile.”
Alberto Calderon

For Gold Fields operations, total gold output slumped by 3 per cent to 210,000 ounces (including 45% of Asanko) in Q1 2022, primarily due to lower yields and throughput at both Tarkwa and Damang mines.

With particular consideration to its divested Ghana asset, Kinross registered 34,929 ounces of gold equivalent in Q1 2022, down from 43,894 ounces of gold equivalent, representing an output decline of 25.67 per cent, owing to lower grades from underground mining.

Specifically, production at its Tarkwa mine decreased marginally to 128,500oz at end-Q1 2022 whereas production at Damang mine came in at 62,000 ounces. Gold production at the Joint Venture (JV) with Galiano Gold, the Asanko Gold mine, saw a production decrease by 16 per cent to 42,300oz (100% basis) and accrued 19,035oz (45% basis) to Gold Fields.

Ghana Loses Gold Crown to South Africa

During the Annual General Meeting of the Ghana Chamber of Mines, the new President of the Chamber, and the Vice President of Gold Fields, Joshua Mortoti, said that large-scale sub-sector’s contribution to national gold production decreased from 2.847 million ounces in 2020 to 2.720 million ounces in 2021, representing a downturn of 4.44 per cent.

Due to some of these barriers in 2021, Ghana lost its enviable position as the top gold mining producer in Africa. The volume of gold output declined sharply from 4.022 million ounces in 2020 to 2.818 million ounces in 2021, the lowest production since 2008.

Production was lower mainly due to the Company undertaking significant reinvestment across key assets, the temporary suspension of underground mining activities at Obuasi, the impact of COVID-19 in the first half of 2021, and secondary impacts of the pandemic, including on the mobility of labour, across the full year.

The decline in production was mainly due to a decline in the output of several mines, including Gold Field’s Joint Venture mine Asanko Gold Mines, decline in AngloGold Ashanti’s Obuasi deposit, and Iduapriem Mines, as well as Adamus Resources Ltd, declining by over 10 per cent in the year compared to that of 2020.