The Minister for Lands and Natural Resources, Samuel Abu Jinapor, has disclosed that effective 1^st January 2023, all large-scale mining companies, as agreed with the Bank of Ghana, shall sell twenty percent of all refined gold at their refineries to the Bank of Ghana before the export of the gold.

According to him, the move is part of measures to operationalize the government’s use of gold to purchase oil products.

He revealed that the Bank of Ghana and the Precious Minerals Marketing Company (PMMC) will coordinate with the large-scale mining companies to ensure compliance with this directive.

“Effective 1st January 2023, all large-scale mining companies (as agreed with the Bank of Ghana) shall sell twenty percent (20%) of all refined gold at their refineries to the Bank of Ghana (in Ghana Cedis) before the export of the gold.”
Samuel Abu Jinapor

Mr Jinapor noted that all Community Mining Schemes (CMS) shall equally sell their gold outputs to Government through PMMC also effective January 1. With this, he explained that all mining licenses for CMS shall include a clause mandating licensee to sell their gold output to Government.

“Effective 1st January 2023, all Licensed Small-Scale Gold Miners shall sell their gold to Government through PMMC. All small-scale gold mining licenses shall include a clause mandating licensee to sell their gold to Government.”
Samuel Abu Jinapor

The lands minister noted that the gold to be purchased by the Bank of Ghana and the PMMC will be in “cedis at spot price with no discounts”.

These directives, Mr Jinapor noted, would also help local gold refineries obtain gold supplies from PMMC to support their operations as they work toward obtaining the required London Bullion Market (LBMA) certification.

It will be recalled that the Vice President, Dr Mahamudu Bawumia, revealed that government is negotiating a new policy regime where gold will be used to buy oil products for the country. He indicated that the move to barter gold for oil represents a major structural change for the country.

Dr Bawumia stated that the barter of sustainably mined gold for oil is one of the most important economic policy changes in Ghana since independence.

Gold Acquisition Program by BoG

According to the Central Bank, other than the diversification benefits of gold for Ghana’s reserves portfolio, the domestic gold purchase program will pave the way for BOG to grow its foreign exchange reserves to foster confidence, enhances currency stability, creates a more attractive environment for foreign direct investments and economic growth. This program, it highlighted, will also enable the Bank to leverage its gold holdings to raise cheaper sources of financing to provide short term foreign exchange liquidity.

The Bank noted that the program sets the stage for Ghana to purchase gold as part of efforts to build its reserves. The step, it noted, will enable the Bank of Ghana buy domestically produced gold from selected gold aggregators and mining firms and pay in the local currency at the prevailing market price.

BoG indicated that through this program it expects to double its gold holdings in the next five years.