Minerals revenue dips to US$3.39b

Proceeds from the country’s export of minerals dipped from US$3.94billion in 2014 to US$3.39billion in 2015, Kwame Addo-Kufuor-President of the Chamber of Mines, has said.

The reduction in minerals revenue was as a result of reduced production and price of gold, and purchases of gold and shipments of manganese. While the manganese recorded a five percent dip in total shipments, the volume of gold exports also reduced by 10 percent. Purchases of diamond by Precious Minerals and Marketing Company (PMMC) decreased by 28 percent.

Mr. Addo-Kufour was speaking at the Chamber’s 88^th Annual General Meeting themed ‘Sustaining Mining and Power Investments: Meeting Stakeholder Expectations in a Challenging Global Environment’, and explained that revenue from gold fell to US$3.32billion in 2015 from the US$3.84billion recorded in 2014. This was also largely due to the fall in output of member-companies and the average realised gold price.

He mentioned that total gold output dropped from 3.1 million ounces in 2014 to 2.8 million ounces in 2015 as a result of declines in production at AngloGold Ashanti-Obuasi; Golden Star Resources-Bogoso Prestea; Abosso Gold Fields; Golden Star Wassa; Chirano; Newmont Ahafo and purchases by ASAP VASA. AngloGold Ashanti Iduapriem; Gold Fields-Tarkwa; Newmont Akyem; Adamus; Perseus; and PMMC recorded growth in output.

Purchases of gold by PMMC from small-scale miners in 2015 inched upward to more than 267,000 ounces from 265,000 in 2014.

On diamond, he indicated that PMMC - the sole buyer from small-scale miners - reported a 28 percent decrease in its purchases while total purchases and export of diamond decreased from over 240,000 carats in 2014 to about 174,000 carats in 2015, with a corresponding revenue of US$10.7million and US$6.4million respectively.

Ghana Manganese Company’s export of manganese reduced from over 1.35 million tonnes to 1.28million tonnes in 2015. The decline in exports reflects the inability of the company’s major clients to lift manganese in 2014 and the early part of 2015. Accordingly, GMC’s revenue declined from US$91.1million to US$70.5million, over the period.

Commenting on the Chamber’s activities during the year under review, Mr. Addo-Kufuor said the year was quite a difficult one for the mining industry in many respects. While the economy experienced a power crisis, mining companies had to manage falling commodity prices with increases in operational cost. 

“Tough measures had to be taken to save jobs, remain profitable and meet obligations to our various stakeholders. It is to the credit of the various operators that this was successfully achieved,” he said.

He explained that the Chamber has over the years implemented its strategic plan in order to fulfil the objectives of operating as an advocacy organisation that facilitates the work of its member-companies.

“To manage the current dynamics of our industry and the communities in which we operate, our members require innovative skills and proficient human capital and related resources, and operationally perceived investments as well as full partnership with government and relevant stakeholders.

“The Chamber will continue to maintain its role as the foremost advocate for environmentally and socially responsible mining in the country and sub-region. We plan to achieve this objective by collaborating with the key stakeholders including regulators, government, revenue agencies, host communities and the media.

 “We believe that this effort will ultimately make Ghana a mining investment haven. The Chamber is also committed to supporting transformation of the economy into one that provides even more opportunities for local entrepreneurs and businesses by strictly adhering to the local content law,” Mr. Addo-Kufuor stated.

Minister for Lands and Natural Resource, Nii Osah Mills confirmed that the country has benefitted immensely from the revenue generated by responsible mining activities.

“Apart from the role that mining is playing in the economy’s stabilisation, it continues to be a reliable avenue for job-creation, and support for government’s national development agenda and sustainability programmes.

“The ministry appreciates the fact that investment must not only be attracted but also sustained to act as a catalyst for the growth of business, so as to generate resources that benefit all stakeholders.

“It is for those reasons that government will continue to collaborate with the Chamber to address the thorny issues that have the potential to destroy all the gains made,” he said.

Mr. Sulemanu Koney, Chief Executive Officer of the Chamber, explained that during the year under review the Chamber and its members were at the forefront of implementing policies and interventions which enhanced the minerals and mining sector’s contribution to national development, as well as improved livelihoods in its host communities.

“The progressive integration of our members’ activities into the local non-mineral economy, through local procurements and other import substitution measures, continues to exert a catalytic influence on the country’s objective of changing the structure of its economy through enhanced manufacturing and service provision on the back of the mining industry,” he said.

He said over the years the Chamber has been working with member-companies to diversify their energy sources and reduce the industry’s carbon footprint.

Mr. Koney stated that government and its agencies provided tremendous support to the Chamber in delivering services that addressed the concerns of member-companies as well as enhance the outcomes of mining in 2015.

He commended the National Security Council and t Ghana Armed Forces for their role in curbing illegal mining on the concessions of member-companies.

“Even though our collaboration with government yielded verifiable results in the year, there are a number of unresolved challenges -- chiefly the unfavorable fiscal regime and illegal mining. It is our expectation that the Chamber can continue to work with government to address these lingering and other problems in 2016,” he remarked.