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Ghana’s gold production to go up by 9% in 2021 – Fitch Solutions

Gold production in Ghana in 2021 is expected to grow by about 9 percent, the biggest growth rate in years.

This is expected to push the volume of gold produced in Ghana to 4.65 million ounces next year according to a report by Global market analysis outfit Fitch Solutions.

The increase in gold production will help Ghana maintain its position as Africa’s largest gold producer in 2021, after surpassing South Africa in terms of gold production in 2019.

According to Fitch Solutions, significant growth in Gold production in Ghana will be driven by the Phase 2 completion of AngloGold Ashanti’s Obuasi Project.

AngloGold poured first gold at the Obuasi mine in December 2019 during Phase 1 of the project, and in October 2020 the firm reported that Phase 2 of the project is 68.4% complete.

The firm currently expects to achieve a steady state of operation in 2021, increasing Ghana’s gold production by approximately 350-400k oz per year during the first 10 years of Obuasi’s mine life.

Price of gold on the global market which begun the year around $1.500 an ounce and hovering around $1,900 an ounce, is expected to boost the attractiveness of Ghana’s mining investment environment.

Gold worth about $4.3 billion according to data from the Bank of Ghana was exported from the country between January and August 2020.

In addition, the Fitch Solutions report states that elevated gold prices on the back of global economic uncertainty will bolster gold mining investment in Ghana.

Gold prices have rallied in 2020 amid the Covid-19 pandemic, and Fitch Solutions states that a second wave of the virus in Europe and the United States, is prompting a widespread reinstatement of lockdown and preventative measures which will dampen investor sentiment going into 2021.

This development should support demand and prices of safe haven assets including gold.

Impact of conflict on Agyapa Royalties deal

Fitch Solutions also highlights the fact that the continuous contention surrounding the Agyapa Royalties deal and the listing of Agyapa Royalties on the London Stock Exchange (LSE) will increase policy uncertainty in the Ghanaian mining sector in the near term.

In October 2020, the government of Ghana announced it would delay the initial public offering (IPO) of Agyapa Royalties Limited.

This came after the Special Prosecutor, Martin Amidu, wrote to the Finance Ministry urging it to suspend the issuance of the IPO pending the receipt of crucial documents to assist with the corruption risk assessment.

The Ministry of Finance, in agreement that more transparency is necessary to bolster the integrity of the already controversial deal, served notice that government will not proceed with the Initial Public Offering (IPO) of the Agyapa Royalties deal until the Special Prosecutor concludes the assessment on it.

In a letter signed by Deputy Finance Minister, Charles Adu Boahene, and sighted by Citi Business News, the Ministry said the initial plan to launch the IPO in September is currently on hold.

The Finance Ministry further assured that it was ready to cooperate with the anti-graft office.

Meanwhile, after the Special Prosecutor released its corruption risk assessment report, President Nana Akufo-Addo, directed the Finance Minister to send the Agyapa Royalties Agreement back to Parliament.

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