Gold Dealers Hit Jackpot

Ghana, like many other African nations, is blessed with natural resources that have enabled it to carve a niche for itself on the competitive international market. The country, which until independence was called Gold Coast, is often held up as a turn around success story by many western economists. Since the 16th century, the country has been one of the world�s leading exporters of gold. Ghana has been a producer of gold for over 500 years and at the moment prides itself as one of the largest and richest reserves of gold in the world. The country�s mining industry is a success story in government�s attempts to turn the fledgling economy around. Available information gathered from the Ghana Chamber of Mines indicates that the country's gold production in the first quarter of 2009 was 675,151 ounces, up nine percent in the first three months of last year, while higher world prices pushed cumulative mining revenue up 11 percent to $641.2 million. Ghana, which is the world's number two producer of cocoa, is also Africa's second biggest gold miner after South Africa. It produced 2.6 million ounces of the precious metal in 2008, when total mining revenues were $2.2 billion. According to Jurgen Eijgendaal, President of the Chamber, there are prospects for increased output in the gold sub-sector this year. Many investors see gold as a safe store of value and it has performed strongly during the global financial downturn. Gold futures rose above $980 per ounce this year and accounted for 96 percent of Ghana's minerals revenue last year. The nation has made tremendous strides in the development of its mining sector since the inception of the Economic Recovery Programme. Under this programme, several macro economic policies were initiated, which resulted in an expansion of investment into the country. For example, major mining companies like AngloGold, Goldfields, Golden Star Resources, and Newmont, are investing significant amounts in the country. Other multinational companies such as BHP-Billion, Alcan, Rio and Alcoa, have also expressed interest in the bauxite industry in Ghana. Currently, proceeds from the mining sector provide the largest foreign exchange earnings for the nation, with gold accounting for about 90 percent of these earnings. In addition to gold, the country is endowed with other mineral deposits such as Manganese, Bauxite and Diamond. Bauxite shipments went up 41 percent, earning the country 49 percent more in revenue, but manganese output fell 30 percent. There are also unexploited economic deposits of iron ore, limestone, kaolin, feldspar and silica sands. Statistics available shows that at the end of 2004, over 200 gold reconnaissance and prospecting licences has been issued by the government to both Ghanaian and foreign entrepreneurs. Some of these companies have advanced in the exploration work, but due to lack of funding are unable to carry the exploration through to exploitation. It is however heartbreaking to know that in spite of the high level of gold production in Ghana, there is no major refinery in the country and as such, the gold is exported for final refining. Feasibility studies have confirmed the viability of the refinery of gold in Ghana. Such a facility, according to market watchers, will serve other gold producing countries within the sub-region. This is a project that investors with technical know-how would wish to consider, according to gold analysts. Fortunately for Ghana, C. C. Global Investments has announced plans to build a gold refinery in the country. The $15 million project, to be located on the Spintex Road in Accra, is expected to create more jobs for the masses in Ghana. C. C. Global Investments has branches in Dubai, United States of America, Lebanon, Saudi Arabia, and apart from its gold business, the company is also into other kinds of ventures, ranging from construction to medicine. The company said it decided to set up the refinery in Ghana due to the country�s conducive political and economic climate. A team of 21 engineers and technicians are expected in the country for a period of one month to train Ghanaians who will be employed to work at the refinery. �Benefits to the state include job creation for about 100 people, as well as value addition to Ghana�s gold. Thus, instead of taking the gold outside to be refined, it can be refined in the presence of the owner and shipped as pure gold of about 99.99 per cent,� the Chief Executive Officer of C. C. Global Investments, Dr. Mustapha Muradi has said. He added; �What the country currently export is 92 per cent gold and the tax element which translates into revenue is also based on the 92 per cent but when it is 99.99 per cent, its value is much higher and the taxes are also higher.� Dr. Muradi stated that 97 per cent of the gold refined in Ghana will be exported to the European, Middle East, American and possibly the Asian markets, noting that the remaining three percent would be left for the state. The CEO of C. C. Global Investments noted that the company might extend its operations to jewelry manufacturing in the next few years, and will partner with educational institutions, namely, Tarkwa School of Mines, and Kwame Nkrumah University of Science and Technology. Dr. Muradi, who expressed concern about what he termed as gold scamming in Africa, contended that his outfit�s prime motive of setting up the refinery in Ghana is to stop the gold scamming business that is going on in African countries. He asserted that the project will be refining over 300 kilogrammes of gold daily, and hence, the gold in Ghana will not be sufficient for the refinery. Consequently, he said other countries will be turning to Ghana to refine their gold and this, he noted, would be more beneficial to Ghana as it would bring more revenues to the state and also project the country�s image internationally. While acknowledging C. C. Global Investments for the initiative, most Ghanaians have called on other investors to help set up downstream production facilities in the country to manufacture key input for the mining industry, namely mill balls, drill bits, cyanide and activated carbon, as well as commemorative coins, jewelry and electronic component. They are challenged to take advantage of the industrial free zone facility to produce such items for the international market. It is for this reason that the setting up of the major gold refinery in Ghana is a welcome news, which would push the country to a higher pedestal in the continent as far as doing business in gold is concerned.