Mining industry posts strong performance in 2012

The country’s mining industry’s output increased by 6 percent to 96.8 tonnes, regaining its 2010 position and making it the 18^th leading producer of the gold globally, according to industry publication, the Gold Fields Mineral Survey.

Figures from the Minerals Commission indicate that the mining industry attracted US$1.0billion in total investment inflow into the country in 2012. These investments came from producing, exploration and support Service companies. 

The multiplying effect of this investment in the country’s economy cannot be overestimated.

The Bank of Ghana also reported that the mining industry’s contribution to total merchandise export earnings was about 43 percent in 2012. Data from the Ghana Statistical Service show that the mining sub-sector grew by 23.5 percent in 2012. This compared favorably with the 18.8 percent it achieved in 2011.

Furthermore, the Ghana Revenue Authority (GRA) has stated that the mining sub-sector maintained its position as leading contributor to the authoritys’ domestic tax contribution in 2012. 

The total payment from the mining industry to the authoritys’ chest was approximately GH¢1.5billion in 2012. This amount represents about 27.04 percent of GRA’s total domestic collection in the year. 

The 2012 collection was an increase of 45 percent on the GH¢1.03billion it collected from the mining industry in 2011. The hike was as a result of increased minerals revenue due to higher gold price and marginal increases in output, which translated into higher mineral royalty and corporate tax payments.

On corporate tax, withholding tax and levies, the mining and quarrying sub-sector contributed about GH¢894million to the GRA’s contributions -- representing about 37 percent of the total corporate tax collected by GRA in 2012.

 The mining sector maintained its position as the highest payer of company tax during 2012.

Mineral revenue from producing members of the Ghana Chamber of Mines was up 14 percent to US$5,447,306,422 from the US$4,761,748,688 recorded in 2011. 

The increase was largely attributable to gold revenue, which went up on the back of appreciation in realised gold price and output.

Revenue from bauxite was also up in 2012, although the key driver of increase in mineral revenue was gold.

Revenue from gold improved by 15 percent from US$4,630,255,619 in 2011 to US$5,309,042,207 in 2012 due to an eight percent increase in gold output from 2,924,385 ounces in 2011 to 3166,483 ounce in 2012 -- coupled with a six percent appreciation in the average realised price of gold from US$1,583 in 2011 to US$1,677 in 2012.

 The 8 percent growth in the overall production of gold from producing member-companies was accounted to a boost in output at Golden Star Resources Bogoso-Prestea, Chirano Gold Mines, Adamus Resources and Gold Fields Ghana, Tarkwa. This was complemented by an increase in purchases and export of Gold from small-scale mining by the Precious Minerals Marketing Company (PMMC) and Asap Vasa. 

 Additionally, fresh production from Perseus Mining, which commenced production in 2012, contributed to the overall growth in output of gold. 

The upturn in output at the aforementioned companies and the additional production from Perseus Mining more than made up for the declines at Anglogold Ashanti Obuasi, Anglogold Ashanti Iduapriem, Golden Star Wassa as well as a marginal dip at Newmont Ahafo.

 Gold Field Ghana Tarkwa maintained its position as the leading producer of gold in the country, with the marginal increase in its output from 717,342 ounces in 2011 to 718,878 ounces in 2012 despite the closure of its relatively high-cost south Heap Leach operation in the fourth quarter.

On other hand, Gold Fields Ghana-Damang witnessed a decrease in production by about 24 percent from 217,719 ounces in 2011 to 166,448 ounces in 2012 owing to moderation of the milling rate to enhance plant reliability. 

As a result, total production of the Gold Fields Ghana group in 2012 was 885,326 ounces compared to the 935,061 ounces it produced in 2011. This represents a decline of five percent on the group’s total production in 2011.

 Production at Anglogold Ashanti-Obuasi was down by 10 percent in 2012 at 280,084 ounces compared to an output of 312,595 ounces in 2011. The decline was attributable to inadequate underground development, which resulted in the mine separating from its age-long contractor and deciding to engage in owner-mining. 

Anglogold Ashanti Iduapriem’s outturn declined by nine percent from 199,004 ounces in 2011 to 180,238 ounces in 2012 as a result of  processing low grades. In effect, the output of the Anglogold Ashanti group decreased by 10 percent from 511,599 ounces in 2011 to 460,322 ounces in 2012.

Golden Star Bogoso Prestea’s production was up by about four percent from the 166,147 ounces recorded in 2011 to 172379 ounces in 2012 on account of the re-commissioning of its oxide plant early in the year, increasing processing rate by about 40 percent: in contrast, Golden Star Wassa’s output contracted by nine percent from 160,618 ounces in 2011 to 146,703 ounces in 2012.

On the whole, the Golden Star Resources mines’ output was 319,082 ounces in 2012 -- a two percent decrease on the 326,765 ounces produced in 2011.

The outturn at the Newmont Ahafo Mine was 561,356 ounce in 2012. This represents a decrease of about two percent on the 572,256 ounces it produced in 2011.

Chirano Gold Mines saw a significant increase of about 14 percent of its output from 256,240 ounces in 2011 to 292,534 ounces in 2012 on the back of import head grades and process recovers’. 

During its second year of production, Adamus Resources’ output went up by 37 percent from 76,504 ounces in 2011 to 104,629 ounces in 2012 -- the mine having commenced production in 2011 while the 2012 performance reflects a full year’s production.

Perseus Mining Ltd., which commenced production in 2012, recorded an output of 185,740 ounces in the year.

PMMC’s total purchases and exports of gold from small-scale miners increased significantly in 2012, from 235,787 ounces a year earlier to 316,699 ounces in 2012. The 2012 performance was about 34 percent higher than the amount recorded in 2011.

Asap Vasa’s purchases and export of gold from small-scale miners appreciated tremendously from 10,173 ounces in 2011 to 40,794 ounces in 2012, a 301 percent lift.

PMMC’s purchases and export of diamond from small-scale miners decreased by 24 percent from about 283,369 carats in 2011 to about 215,118 carats in 2012. The decline in purchases of diamond was attributable, in part, to the relatively low market rate of demand -- which drove more hands into gold production.

The export of manganese by Ghana Manganese Company declined by 18 percent from 1,827,692 tonnes in 2011 to 1,490,634 tonnes in 2012. The shortfall was due to new developments and pit integration to ensure easy maneuvering of mining equipment, and also to enable the company to mine different grades from different parts of the same pit for optimised blending. 

The decision of the company to focus on mine development and not to mine ore in November and December 2012 was driven by a strategy to better position the company for structured higher export levels. 

Not surprisingly, manganese revenue was down by about 18 percent from US$119,920,951 in 2011 to US$98,605,517 in 2012, given the relative stability of the price of the mineral over the period.

Bauxite shipments by the Ghana Bauxite Company increased significantly by 88 percent from 400,069 tonnes in 2011 to 752,771 tonnes in 2012. The increase in volume contributed to a significant increase in the corresponding minerals revenue by about 113% from US$13,406,433 the year earlier to US$28,495,592 in 2012.

The achievement was despite Ghana Bauxite Company’s decision to haul its ore by road instead of the more cost-effective and appropriate rail transport. 

The poor rail infrastructure is a major constraint, which could potentially impact the long-term viability and sustainability of the two bulk mining companies in Ghana -- namely Ghana Bauxite Company and Ghana Manganese Company.