Gold Dealers Hit Jackpot

Thursday July 30, 2009
By Innocent Appiah

Ghana, like many other African nations, is blessed with natural resources that have enabled it to carve a niche for itself on the competitive international market.

The country, which until independence was called Gold Coast, is often held up as a turn-around success story by many western economists.

Since the 16th century, the country has produced gold and been one of the world’s leading exporters of the commodity. At the moment it prides itself as having one of the largest and richest reserves of gold in the world.

The country’s mining industry is a success story in the government’s attempts to turn the fledgling economy around.

The nation has made tremendous strides in the development of its mining sector since the inception of the Economic Recovery Programme in the 1980’s, under which several macro economic policies were initiated, resulting in an expansion of investment into the country. For example, major mining companies like AngloGold, Goldfields, Golden Star Resources and Newmont among others, have invested large amounts of monies in the country.

Other multi-national companies such as BHP-Billion, Alcan, Rio and Alcoa have also expressed interest in the bauxite industry in Ghana, and currently proceeds from the mining sector provide the largest foreign exchange earnings for the nation with gold accounting for about 90 percent.

In addition to gold, the country is endowed with other mineral deposits such as manganese, bauxite and diamond.

There are also unexploited economic deposits of iron ore, limestone, kaolin, feldspar and silica sands.

Statistics available show that as at the end of 2004, over 200 gold reconnaissance and prospecting licences had been issued by the government to both Ghanaian and foreign entrepreneurs.

Some of these companies have advanced in the exploration work but due to lack of funding are unable to carry the exploration through to exploitation.

It is, however, heartbreaking to know that in spite of the high level of gold production in Ghana, there is no major refinery in the country and as such, the gold is exported for final refining.

Feasibility studies have confirmed the viability of the refinery of gold in Ghana.

Such a facility, according to market watchers, would serve other gold producing countries within the West African sub-region.

This is a project that investors with technical know-how would wish to consider, according to gold analysts.

Fortunately for Ghana, C.C. Global Investments has announced plans to build a gold refinery in the country.

The $15 million project, to be located on the Spintex Road in Accra, is expected to create more jobs for the masses in Ghana.

C. C. Global Investments has sister companies in Dubai, United States of America, Lebanon, Saudi Arabia, and apart from its gold business, the company is also into other ventures, ranging from construction to medicine.

The company said it decided to set up the refinery in Ghana due to the country’s condusive political and economic climate.

A team of 21 engineers and technicians are expected in the country for one month to train Ghanaians who would be employed to work at the refinery.

“Benefits to the state include job creation for about 100 people, as well as value addition to Ghana’s gold.

Thus, instead of taking the gold outside to be refined, it can be refined in the presence of the owner and shipped as pure gold of about 99.99 per cent,” the Chief Executive Officer of C. C. Global Investments, Dr. Mustapha Muradi has stated.

He added: “What the country currently exports is 92 per cent gold and the tax element which translates into revenue is also based on the 92 per cent but when it is 99.99 per cent, its value is much higher and the taxes are also higher,” disclosing also that 97 per cent of the gold refined in Ghana would be exported to the European, Middle East, American and possibly the Asian markets, with the remaining three percent left for the state.

The company, he said, might extend its operations to jewelry manufacturing in the next few years, and would partner with educational institutions like the Tarkwa School of Mines, and Kwame Nkrumah University of Science and Technology to that effect.

Dr. Muradi, who expressed concern about what he termed as gold scamming in Africa, contended that his outfit’s prime motive of setting up the refinery in Ghana is to stop that scamming business, asserting that their project would be refining over 300 kilogrammes of gold daily, and hence, the gold in Ghana would not be sufficient for the refinery. Consequently, he said other countries would be turning to Ghana to refine their gold which would bring more revenue to the state and also project the country’s image internationally.

While acknowledging C. C. Global Investments for the initiative, some Ghanaians have called on other investors to help set up downstream production facilities in the country to manufacture key input for the mining industry, namely mill balls, drill bits, cyanide and activated carbon as well as commemorative coins, jewelry and electronic component.

They are challenged to take advantage of the industrial free zone facility to produce such items for the international market.

Available information gathered from the Ghana Chamber of Mines indicate that the country’s gold production in the first quarter of 2009 was 675,151 ounces, up nine percent on the first three months of last year, while higher world prices pushed cumulative mining revenue up 11 percent to $641.2 million.

Ghana, which is the world’s number two cocoa producer, is also Africa’s second biggest gold miner after South Africa.

It produced 2.6 million ounces of the precious metal in 2008, when total mining revenues were $2.2 billion.

Bauxite shipments also went up 41 percent, earning the country 49 per cent more in revenue, but manganese output fell 30 percent. Gold accounted for 96 per cent of Ghana’s minerals revenue last year.

Many investors see gold as a safe store of value, and it has performed strongly during the global financial downturn.

Gold futures rose above $980 per ounce this year.

And it is for this reason that the setting up of the major gold refinery in Ghana is welcome news, which would push the country to a higher pedestal in the continent as far as doing business in gold is concerned.

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