Thursday, February 2, 2017

Gold output to increase as companies increase investments



Gold production is expected to significantly increase this year, given the huge investments and expansion drive by major mining companies in the country, Dr. Toni Aubynn, Chief Executive Officer of the Minerals Commission has said.
 
Asanko Gold Mines, Goldfields and Gold Star Resources have all shown signs of increasing production through injection of new capital.

Dr. Aubynn told the B&FT that: “We expect 2017 to be a positive year. We expect that production will go up. I will not be able to tell you exactly how much but we expect production to go up slightly above 2016 figures.

We have very positive expectations for this year and my expectations steams from the fact that there are huge investments by gold production companies. The future, in a few years, looks good for gold production; we are also upbeat about the price. We are not expecting the price to go down as much as it did three years ago. We believe that potentially is good,” Dr. Aubynn said.

Gold production during the 2016 production year stood at about 2.1 million ounces, which represents an increase of 2.77 over the 2015 production figure of 1,977,135.

Diamond production, however, dipped in 2016; down from 106,237 carats in 2015 to 96,992 carats in first quarter 2016 representing a fall of 8.70 percent.

Manganese production recorded a marginal rise of 1.35 percent from 784,547 tonnes in 2016 compared with previous year’s figure of 774,115 tonnes.

“Asanko Gold is now ramping up. Fortunately, Goldfields, after its preliminary agreement with government, has now secured US$1.4 billion to invest in the Damang project. If they are able to go into actual production within the year, then it means that production is likely to go up,” Dr. Aubynn said.

A lot of other underground mining development projects are also expected to come on-stream. Newmont Ahafo’s Subika, Asanko and Golden Star Wassa’s underground mines are expected to come on-stream after receiving approval from the Commission.

 “We are excited about Golden Star Resources increasing production through its Prestea underground mines,” he said.

The Golden Star Resource Limited has estimated the development of its underground mine at the Wassa project to produce an average of 163,000 ounces of gold per annum over its production life, with average cash operating costs of US$780 per ounce.

The first production from Wassa underground which begun early this year is estimated to continue into 2024.

 Dr. Aubynn, confirmed that the mining industry as a growth pole in the country’s economy which gives credence to the position that there have often been increased foreign direct investment (FDI) flows to the sector, rising annual mineral output and value of mineral exports, increased exploration activities with a rise in the number of operating mines, as compelling evidence to support the sector’s contribution to the national economy.

Available figures from the Minerals Commission show that proceeds from the country’s gold production in the first half of 2016 rose to US$1,996.20 billion compared with US$1,653.45 billion recorded in the same period previous year, despite a drop in production.   

Cocoa libralisation or chaos?

In his proposal that Ghana should consider liberalising the cocoa sector, it is not clear whether the outgone Science and Technology Minister, Mahama Ayariga, is fully apprised of the facts regarding liberalisation or the lack thereof in La Cote D’Ivoire.

The fact of the matter is that La Cote D’Ivoire has, since 2012, begun to hasten slowly on liberalisation, where the state did not intervene in pricing, with the full backing of the Breton woods folk who, in the first place, persuaded that country’s government to stop setting prices.

That country’s government revamped Cocobod’s equivalent – the Coffee and Cocoa Council – and reinstated guaranteed prices for farmers, whilst establishing a marketing mechanism involving the forward sale of 70 to 80% of the next year’s crop through twice-daily auctions.

“These forward sales auctions – due to end each year in August just before the new crop starts – allow the establishment of a benchmark price for the next crop year and ensure a guaranteed minimum share of 60% of the CIF [cost, insurance and freight] price to farmers,” a report by Agritrade indicates.

So, La Cote D’Ivoire, which Mahama Ayariga suggested to incoming Agric Minister Dr. Owusu Afriyie, to emulate, has actually reversed course on liberalisation, and Ghana would have to carefully consider the pros and cons before taking a decision on same.

In a June 18, 2014 article titled: “Ivory Coast cocoa reforms leave bittersweet taste,” the Financial Times of the UK quotes the CEO of the Coffee and Cocoa Council, Massandjé Touré-Litsé, as describing the decade of liberalisation as “a mess,” since smallholder farmers were ill-equipped to negotiate with middlemen, leading to lower incomes.

In fact, the IMF, which got that country to pursue liberalisation, was later to make the reforms that established the Coffee and Cocoa Council in 2012, condition precedent to a debt relief package for the Alassane Ouattara government which was elected in November 2010.

But under the new reforms, La Cote D’Ivoire has done something that has been hailed by industry watchers: it set up a reserve fund at the Central Bank of West African States (Banque Centrale des États de l’Afrique de l’Ouest – BCEAO) to cover risks beyond the normal operations of the price guarantee scheme.

This is meant to support the new marketing arrangements in a fiscally neutral manner,” Agritrade reports.

In response to Mahama Ayariga’s suggestion, the incoming Agric Minister, Dr Owusu Afriyie Akoto said the NPP government will consider the liberalisation idea.

But for good reason, he cautioned: “Cocoa, in Ghana, is a very sensitive subject. It is a very conservative arrangement that we have for cocoa. So, one has to tread very carefully if one wants to change the way things are done. But definitely it is a suggestion which is attractive and something that is worth considerate…”

Liberalisation would mean that the state would have to stop setting producer prices and relinquish its hold on exports, whilst Ghana Cocoa Board (Cocobod), would, probably, cease to hold sway over the industry, even though under the current arrangement, the involvement of Licensed Buying Companies suggests some level of liberalisation.  

Ghana, the world’s second-biggest cocoa producer, produced between 850,000-900,000 metric tonnes for the 2015-16 season that began October--up from production in the previous season of about 740,000 metric tonnes.

But Ghana’s production is hardly half that of its western neighbour, and the two main political parties – the NDC and the NPP – are often at one another’s throat regarding which side has let the country down.

“Ghana has the same land area as Cote D’Ivoire in terms of cocoa production--1.7million hectares--yet our production is not up to half of that of Cote d’Ivoire. Our production has been about 800,000 metric tonnes but Coat D’Ivoire’s production has been between 1.6million -1.7million metric tons,” Dr Afriyie Akoto said.  

The poor production, he noted, is purely down to underinvestment in the cocoa sector. “You cannot, based on this statistics, say that the Ghanaian farmer is lazy. The Ghanaian farmer as I know, is the hardest working person you can find anywhere in the world. The difference between Cote D’Ivoire and Ghana is that public resources are streaming into the cocoa sector compared to Ghana, where we have actually been cutting back. There has been disinvestment in agriculture.

“All the resources that are required in terms of the last 8 years when the government of the NDC took over nearly 4 % of total allocation of budget was going to the Ministry of Food and Agriculture for agriculture development. That figure has steadily declined to 1.1% in 2014 and 2015,” he added.

In his proposal that Ghana should consider liberalising the cocoa sector, it is not clear whether the outgone Science and Technology Minister, Mahama Ayariga, is fully apprised of the facts regarding liberalisation or the lack thereof in La Cote D’Ivoire.
The fact of the matter is that La Cote D’Ivoire has, since 2012, begun to hasten slowly on liberalisation, where the state did not intervene in pricing, with the full backing of the Breton woods folk who, in the first place, persuaded that country’s government to stop setting prices.
That country’s government revamped Cocobod’s equivalent – the Coffee and Cocoa Council – and reinstated guaranteed prices for farmers, whilst establishing a marketing mechanism involving the forward sale of 70 to 80% of the next year’s crop through twice-daily auctions.
“These forward sales auctions – due to end each year in August just before the new crop starts – allow the establishment of a benchmark price for the next crop year and ensure a guaranteed minimum share of 60% of the CIF [cost, insurance and freight] price to farmers,” a report by Agritrade indicates.
So, La Cote D’Ivoire, which Mahama Ayariga suggested to incoming Agric Minister Dr. Owusu Afriyie, to emulate, has actually reversed course on liberalisation, and Ghana would have to carefully consider the pros and cons before taking a decision on same.
In a June 18, 2014 article titled: “Ivory Coast cocoa reforms leave bittersweet taste,” the Financial Times of the UK quotes the CEO of the Coffee and Cocoa Council, Massandjé Touré-Litsé, as describing the decade of liberalisation as “a mess,” since smallholder farmers were ill-equipped to negotiate with middlemen, leading to lower incomes.
In fact, the IMF, which got that country to pursue liberalisation, was later to make the reforms that established the Coffee and Cocoa Council in 2012, condition precedent to a debt relief package for the Alassane Ouattara government which was elected in November 2010.
But under the new reforms, La Cote D’Ivoire has done something that has been hailed by industry watchers: it set up a reserve fund at the Central Bank of West African States (Banque Centrale des États de l’Afrique de l’Ouest – BCEAO) to cover risks beyond the normal operations of the price guarantee scheme.
This is meant to support the new marketing arrangements in a fiscally neutral manner,” Agritrade reports.
In response to Mahama Ayariga’s suggestion, the incoming Agric Minister, Dr Owusu Afriyie Akoto said the NPP government will consider the liberalisation idea.
But for good reason, he cautioned: “Cocoa, in Ghana, is a very sensitive subject. It is a very conservative arrangement that we have for cocoa. So, one has to tread very carefully if one wants to change the way things are done. But definitely it is a suggestion which is attractive and something that is worth considerate…”
Liberalisation would mean that the state would have to stop setting producer prices and relinquish its hold on exports, whilst Ghana Cocoa Board (Cocobod), would, probably, cease to hold sway over the industry, even though under the current arrangement, the involvement of Licensed Buying Companies suggests some level of liberalisation.  
Ghana, the world’s second-biggest cocoa producer, produced between 850,000-900,000 metric tonnes for the 2015-16 season that began October--up from production in the previous season of about 740,000 metric tonnes.
But Ghana’s production is hardly half that of its western neighbour, and the two main political parties – the NDC and the NPP – are often at one another’s throat regarding which side has let the country down.
“Ghana has the same land area as Cote D’Ivoire in terms of cocoa production--1.7million hectares--yet our production is not up to half of that of Cote d’Ivoire. Our production has been about 800,000 metric tonnes but Coat D’Ivoire’s production has been between 1.6million -1.7million metric tons,” Dr Afriyie Akoto said.  
The poor production, he noted, is purely down to underinvestment in the cocoa sector. “You cannot, based on this statistics, say that the Ghanaian farmer is lazy. The Ghanaian farmer as I know, is the hardest working person you can find anywhere in the world. The difference between Cote D’Ivoire and Ghana is that public resources are streaming into the cocoa sector compared to Ghana, where we have actually been cutting back. There has been disinvestment in agriculture.
“All the resources that are required in terms of the last 8 years when the government of the NDC took over nearly 4 % of total allocation of budget was going to the Ministry of Food and Agriculture for agriculture development. That figure has steadily declined to 1.1% in 2014 and 2015,” he added.
- See more at: http://thebftonline.com/commodities/cocoa/22758/cocoa-libralisation-or-chaos.html#sthash.AHt464VD.dpuf

Toni Aubynn inaugurates committee for mining training fund



A seven-member Mining Sector Training Fund Management Committee has been inaugurated by the Minerals Commission to ensure that the country deepens its local content drive in the minerals and mining sector.
 
The membership of the committee is drawn from the Minerals Commission and the Ghana Chamber of Mines.

The committee members as constituted are made up of the following persons: MrAmponsahTawiah - Deputy Chief Inspector of Mines, Policy–Chairman, Mr Emmanuel Afreh  -  Manager, Monitoring & Evaluation-Member, Collins Anim-Sackey - Deputy Manager, Monitoring  & Evaluation-Member/Secretary.

The members also include Francis Eduku -Vice President & Head of HR, Gold Fields- Member, Ms Jane-Frances Nyuagl -  Principal Finance Officer- Member, S. H. Ampofo-Kwabiah  -  Principal Inspector of Mines-Member and Ms.AkuaSarpong-Menu -  Legal Officer- Member.

Officially inaugurating the commission in Accra, Chief Executive of the Minerals Commission, Dr Toni Aubynn explained that the Committee that shall be responsible for submitting proposals to the CEO of the Minerals Commission for the utilisation of funds paid into the Funds account. 

This, he said is to ensure that the provisions achieve the desired intent of benefiting Ghanaian workers and local producers of the mining industry.

“It is my fervent hope that the Committee will discharge its duties to ensure that Ghana deepens the local content drive in the minerals and mining sector,” DrAubynn said.

The establishment of the committee, he explained is in line with the mining sector localization programme under the Minerals and Mining (General) Regulations, 2012 (L.I.2173), which provision is made for the recruitment of expatriates, training of Ghanaians and preference for local products for which companies are required to comply with their respective localization  programme approved by the Commission.

He said: “under Regulation 1 (15) of L.I. 2173, any person who fails to comply with the localisationprogramme is required to pay to the Commission a penalty.

“Under this, the Commission is required under Regulation 1 (16) of L.I. 2173 to establish an account into which the penalty shall be paid for the training of Ghanaians for employment in the mining sector.

“This is in accordance with Regulation 1 (16) of L.I. 2173, which the Commission has since December 2016 put in place, a committee to manage the Mining Sector Training Fund.”