The Ghana Chamber of Mines is confident gold production by its members will increase by over 15 percent in 2021 after declining by about 5 percent in 2020 due to the impact of COVID-19.
Overall gold production in Ghana declined by 12.1% in 2020, the highest year-on-year decline since 2004.
During his presentation at the recently held 93rd Annual general meeting of the Chamber of Mines held virtually the President of the Chamber, Eric Asubonteng, noted that the easing of COVID-19 restrictions bodes well for the entire sector.
“Overall, we project that global supply of gold in 2021 will exceed the corresponding output in 2020. In 2021, the Chamber expects most of its gold producing member companies to recover from the drags that characterized their operations in the preceding year. Overall, the gold output of producing member companies for 2021 is forecasted to range between 3 million to 3.3 million ounces,” he noted.
Mr. Asubonteng further highlighted the contribution of the Chamber to the revenue of the central government as well as their contribution to the local economy.
“Producing member companies of the Chamber returned $3.67 billion out of the mineral revenue of $5.14 billion to the country. This represents 71 percent of the revenue of producing member companies. The Chamber and its producing member companies prioritize the sourcing of inputs from manufacturers and suppliers in Ghana. This is a direct way to retain minerals value in the country and to stimulate broad-based linkages across different sectors.”
He continued, “Pursuant to this, producing member companies of the Chamber spent $4.387 billion in Ghana through payments to manufacturers and suppliers of goods and services, taxes, and financing of social investment projects. In essence, 85.7 percent of producing member companies’ expenditure was retained in
Ghana.”
The COVID-19 pandemic has affected the commodity markets in a variety of ways. Company operations have been affected through isolated outbreaks and government-mandated shutdowns and the demand for many commodities remain low with a lower near-term demand on the horizon.
One mineral that has benefitted from the fears and uncertainty associated with the pandemic was gold. In 2020 the price of gold shot up around the period when the COVID-19 infection was declared a pandemic by the World Health Organisation.
After that declaration, many investors sought to convert their assets into bullion and its related assets, which directly provided the needed momentum for a sustained rise in the price of gold which jumped up by about 5 percent from April 2020 to April 2021, moving from $1,681 per ounce to $1,759 per ounce.
Production on the other hand didn’t perform so well. Output by the large-scale sub-sector which captures members of the Chamber of mines dropped by 4.8 percent to 2.847 million ounces last year.