Miners’ costs surge

The Chamber of Mines says it is worried about cost pressures emanating from projected shortfalls in energy supply and increase in utility tariffs, as well as the proposed increase in ground rent, since these are expected to further depress the mood of the minerals industry for the rest of 2014.

The chamber said the factors are currently balanced on a knife-edge, which calls for utmost circumspection when any of those variables are to be altered.

\Mr. Daniel Owiredu, a former President of the chamber, opined that the imminent temporary shutdown of AngloGold Ashanti’s Obuasi Mine for rehabilitation may significantly blight fortunes of the minerals industry in 2014 -- while output at Golden Star’s Wassa Mine is projected to decline to between 130,000 and 140,000 ounces in 2014’s ongoing rationalisation of production.

Sharing the minerals production trend during 2013, Mr. Owiredu said gold production output increased by 2.1 percent to 97.8 tonnes in 2013, but its share in global gold output remained constant at 3 percent.

This development caused the country to slip to ninth position in leading gold producers in 2013, compared to eighth in globally 2012.

He explained that the downturn in gold revenue drove a percentage point reduction in the share of gold in total mineral revenue, from 97.5 percent in 2012 to 96.3 in 2013.

The one percent growth in output was on the back of declines in production from AngloGold Ashanti Obuasi, Gold Fields Tarkwa, Gold Fields Damang, Chirano Gold Mines as well as lower purchases by the Precious Minerals Marketing Company (PMMC).

The sector, contributing 37.6 percent of total merchandise exports in 2013 as compared to 43 percent in 2012, continued to be a leading source of foreign exchange for the country.

The mining and quarrying sub-sector maintained its position as the foremost contributor to total revenue in 2013.

According to the Ghana Revenue Authority (GRA), total outflows from the sector to the nation’s purse was approximately GH¢1.1billion in 2013.

This amount represented 18.7 percent of total direct tax and 14.3 percent of total domestic revenue mobilised by the GRA in 2013.

Declines in revenue and profit levels were the main drivers of the subdued tax revenue performance in 2013 as compared to the GH¢1.5billion of 2012.

On the upside, Mr. Owiredu said Newmont Akyem poured its first gold in the last quarter of 2013 while AngloGold Ashanti Iduapriem, Golden Star Resources Wassa, Newmont Ghana Ahafo, Adamus Reources, and Perseus Mining registered improvements in their output.

“Newmont Ghana Gold’s Akem Mine is expected to increase in line with a full year’s production.
“The completion of the push back of the chujah pit wall at Golden Star Resources’ Bogoso Prestea Mine in the first quarter of 2014 is also expected to translate into higher output,” he said.

ASAP VASA’s purchases and export of gold from small-scale miners increased from 40,794 ounces in 2012 to 122,518 ounces in 2013, representing a 200 percent increase in its purchases over the review period.

Due to its strategic decision to focus on mine development in the final quarter of 2012, Ghana Manganese Company saw significant growth in its output for 2013.

Total exports expanded by approximately 35 percent from 1,485,239 tonnes in 2012 to 1,997,911 tonnes in 2013, while its revenue increased from about US$98.6million in 2012 to about US$135.47million in 2013 -- a surge of 37 percent.

Revenue accruing to Ghana Bauxite Company from the shipment of bauxite swelled by 16 percent -- from US$28.49million in 2012 to US$32.93million in 2013.

This was mainly due to an increase in its stock of shipments from 752,771 tonnes in 2012 to 826,994 tonnes in 2013, coupled with a 5.2 percent increase in realised average price of its products.