Ghana’s gold production is projected to complete the year with an average output growth of 6 per cent, according to Fitch Solutions.
The rise in production is expected to raise company profits. This is due to the high prices of the commodity on the world market following the rebound in global economic growth.
This sense of optimism surrounding the forecast indicates that mining companies should expect better revenue performance for the fourth quarter of 2021. Moreover, government’s benefits in this regard cannot be overstated as export revenue receipts from the commodity is expected to shore up.
“Elevated commodity prices on the back of a strong rebound in global growth will lead to a recovery in profits in Ghana’s key export industries. In particular, gold (36.0% of merchandise exports in 2020) will be an outperformer, and our mining team expects average annual production to rise by 6.0% in 2021.”Fitch Solutions
Gold production remained subdued in the first half of 2021. And despite these sentiments transcending local borders, some producers of the ‘yellow metal’ could not meet targets for their production guidance, thus shrinking total output in the period.
AngloGold Ashanti, for example, during the course of the first half of 2021 had to halt production of its Obuasi mine after a sill pillar at the underground mining site failed. In rescheduling plans, the company still maintained its annual production guidance for 2021, resuming operations at its Obuasi mine this month.
Also, Galiano Gold, the Joint Venture Partner with Gold Fields Ltd. and operator of the Asanko Gold Mine posted its second consecutive decline (-1,983 ounces) in gold production in quarter three 2021 results.
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On the global front, GlobalData reported a 1.1 per cent decline in global production in first half of 2021. Meanwhile this production is expected to recover in the second half of 2021. However, “overall output for 2021 will remain relatively flat, around 27-28 million ounces”, GlobalData predicts.
Notwithstanding this trajectory, GlobalData, also highlighted three of the gold majors in the country— Gold fields, AngloGold Ashanti and Newmont among the top ten global producers.
According to Fitch Solutions, these trends will be accompanied by rising business investment in the Ghanaian mining sector by firms such as AngloGold Ashanti, Galiano Gold and Newmont Gold Corporation.
In 2020, the impact of the COVID-19 pandemic led to a reduction in total gold output. Gold production declined from 4.577 million ounces to 4.032 million ounces. This reflected a 12.1 per cent decline in production, the worst since 2004, according to the Ghana Chamber of Mines report.
Accompanied mineral revenues for 2020 far exceeded that of 2019 levels by US$32 million. Hopefully, this expected production surge could result in a better-than-expected revenue accrual to the government.