In an exciting development in Africa’s mining industry, Ghana has regained its status as the largest gold producer on the African continent, surpassing fierce competitor South Africa. According to the Ghana Chamber of Mines, the country experienced a remarkable 32% surge in gold production last year, marking a significant rebound after a notable recession in output.
The expansion of existing mines, coupled with the increase in output from both small and large-scale sectors, pushed Ghana’s gold production to 3.7 million ounces in 2022, up from the previous year’s 2.8 million ounces.
Mr Mortoti, the President of Ghana’s Chamber of Mines, also mentioned that member companies of the mines chamber had sold over 77,620 ounces of gold under the Domestic Gold Purchase Programme, a scheme launched by the Bank of Ghana (BOG) to boost reserves.
Ghana’s victory as the largest gold producer in Africa comes after losing its position to South Africa in 2021 due to a drastic fall in output. The increase in Ghana’s gold production is poised to positively impact the country’s economy, creating job opportunities and boosting exports.
Ghana has a rich history of gold mining.
Over the years, Ghana has maintained a significant foothold in Africa’s bullion market. The mining industry of Ghana accounts for 5% of the country’s GDP, and minerals make up 37% of total exports, of which gold contributes over 90% of the total mineral exports. Thus, the main focus of Ghana’s mining and minerals development industry remains focused on gold. In 2008, Ghana broke the record of gold output among fellow African competitors producing an excess of 80.5 tonnes of the gold resource.
Supporting Ghana’s gold extractive sector are 20 large-scale mining companies producing gold, over 300 registered small-scale mining groups and 90 mine support service companies. Ashanti Gold Company leads the pack as the country’s largest gold-producing enterprise.
The eternal significance of gold.
Gold is one of the rarest elements in the world, making up between 0.001 and 0.006 parts per million of the earth’s crust. It is also the most ancient mineral to be extracted by humanity. Small amounts of natural gold were excavated in Spanish caves used during the late Paleolithic period, c. 40,000 BC.
The oldest gold artefacts in the world are from Bulgaria and date back to the 5th millennium BC (4,600 BC to 4,200 BC), such as those found in the Varna Necropolis near Lake Varna and the Black Sea coast, thought to be the earliest “well-dated” finding of gold artefacts in history.
In global economies, gold is a storage of value, and at some point, during the 19th century, currencies were backed by this resource. It was after World War II that gold was replaced by a system of nominally convertible currencies related by fixed exchange rates following the Bretton Woods system. World governments have abandoned gold standards and the direct convertibility of currencies to gold in preference for the modern fiat currency.
Due to the extensive history of gold mining, which predates the Biblical era, discoveries of the bullion resource are falling rapidly. Consider South Africa. The country was the global leader in gold output for some period, digging up over 1,000 tonnes in 1970. Still, since then, its volume has rapidly declined. With continued extraction, gold output from Ghana may also fall, opening room for close competitors such as Libya, Egypt and Algeria.
The impact of gold on African economies
Africa is the third-largest gold-producing continent in the world. It has gold mining activities in more than 21 of its countries. The countries apart from Ghana are South Africa, Tanzania, Zimbabwe, and Mali. If tapped wisely and transparently, the lucrative resource can twist the fortunes of the African continent. Gold’s time immemorial use means that finance houses and governments will most likely maintain high trust and confidence in its value.
Ghana’s success story in the gold industry can be a perfect lesson for fellow gold-rich African countries. A close example is Zimbabwe, which despite boasting the second largest gold reserves in the world per square kilometre encompassing 13 million tonnes of proven reserves, still produces a paltry 17 tonnes per year.