Ghana’s gold production fell 30% last year to its lowest in more than a decade, knocking the country off its spot as Africa’s top producer, the president of the mines chamber said on Friday, blaming a taxation change and operational challenges.
He predicted production should strengthen this year as the mines address the challenges. The government has also announced a plan to purchase local gold that could encourage output.
After a new tax was imposed on small-scale operations, output fell to 2.818 million ounces in 2021 – the lowest level since 2008 – from 4.022 million ounces in 2020.
The West African country has vied with South Africa in recent years to be the continent’s top gold miner. Ghana had already faced a 12% drop in production in 2020 but retained the top spot.
“A combination of concurrent reductions in the output of both large and small-scale gold producers led to a 29.92% fall in the production of the country’s dominant mineral, gold,” Mortoti told the chamber’s annual meeting.
Output from large-scale producers fell 4.44% to 2.72 million ounces with most mines seeing a decline in production due to “operation-related challenges,” said Mortoti, without providing further details.
A significant increase in output from Ghanaian company Abosso Goldfields Ltd limited the fall, he said, adding production should rebound as mines address these challenges.
Output from small-scale producers fell nearly 92% to 0.098 million ounces, said Mortoti, attributing the collapse to a 3% withholding tax imposed on their output in 2019.
Small-scale gold production also fell significantly from 2019 to 2020, when supply chain disruptions caused by the pandemic were also a factor.
Small-scale miners are believed to be producing but are exporting through non-official channels not captured in the national figures, said Mortoti.
Ghana said in May it had started a programme to purchase local gold in bulk to raise the gold component of its reserves and strengthen the cedi currency, the Central Bank governor said last month.
(By Christian Akorlie and Nellie Peyton; Editing by James Macharia Chege and Barbara Lewis)