Gold Fields warns of profit plunge after production decline
The miner said the drop in production was due to challenging ground conditions at South Deep mine.
Ghana, Africa’s biggest gold producer, opened its first refinery in a bid to reap more value from its natural resources.
The Royal Ghana Gold Refinery aims to refine 400 kilograms of gold a day, sourcing the raw material mainly from artisanal and small-scale mines, which officially account for a third of Ghana’s output of about 4 million ounces a year. There’s also a large but unknown amount of gold that’s illegally produced by miners locally known as ‘galamsey,’ who smuggle their output out of Ghana.
“This refinery will play an important role in reducing gold smuggling which has been a major challenge for the country over the years by providing a ready market for artisanal and small-scale miners,” said Bank of Ghana Governor Ernest Addison.
“This gold refinery can mitigate the incentive for smuggling and help promote transparency and accountability in gold trading,” he said.
Rosy Royal Minerals Ltd. of India owns 80% of the refinery and the central bank the remainder, according to government officials.
The refinery is the latest step taken to formalize Ghana’s artisanal and small-scale gold mining. The central bank has bought $5 billion worth of gold from small miners as part of a program started in 2021 to boost Ghana’s foreign-exchange reserves, Addison said. Many other African nations such as Uganda and Madagascar are following the move or considering doing so to prop up their currencies.
The plan also fits within a wider push across the continent to add value to natural resources before exporting them to reap greater economic rewards.
“Our failure to successfully ensure value addition across the entire resource chain has meant that we have been unable to properly harness the benefits of being among the top 10 gold producers in the world,” said Finance Minister Mohammed Amin Adam.
The gold mining history of present-day Ghana, known as the Gold Coast under British colonial rule, spans centuries.
Ghana’s government is also in talks with the London Bullion Market Association, which certifies gold that’s responsibly sourced, to secure a wider market for its small miners.
“If we work hard, we can achieve LBMA status,” Eric Santeng, a director at Royal Ghana Gold, said without giving a timeline. “This status is within our grasp but requires the concerted effort of all.”
Getting the new refinery on the LBMA’s Good Delivery List would make it easier to trade this gold by making it compliant with the stringent sourcing standards of some of the biggest global buyers.
(By Yinka Ibukun and Ekow Dontoh)
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