BY Issah Olegor
The Ghana Chamber of Mines has sounded a note of caution, warning that the country’s mining sector is not reaping the full benefits of record-high gold prices due to substantial increases in input costs.
According to Michael Akafia, President of the Ghana Chamber of Mines, the rising costs of supplies, fuel, and labour are eating into profit margins, making it challenging for some mining firms to stay afloat.
Input Costs On Rise
Michael Akafia explained that the surge in gold prices has led to increased demands from workers for better benefits and remuneration, further squeezing profit margins.
Additionally, fuel costs, particularly for surface miners, closely correlate with crude oil prices, which have also risen significantly.
Other input costs, such as grinding media, have increased substantially, contributing to the challenges faced by mining firms.
Impact On Mining Firms
The Chamber of Mines president revealed that some mining firms in Ghana are struggling to stay profitable, with a few even making losses.
To mitigate these challenges, some firms have had to fast-track exploration activities to benefit from the current high prices.
Micheal Akafia emphasized that not all mining firms can rush to take advantage of high prices, as many undertake sustainable mining practices.
Fiscal Regime Review
Akafia is calling for a review of the fiscal regime for mining firms in Ghana, arguing that the current tax structure is unfavorable.
He noted that taxing mining firms on revenue instead of profit is unsustainable and discourages investment.
The Chamber of Mines is currently engaging with the government to address these concerns and push for a more competitive operating environment.
Gold Production And Projections
Despite the challenges, Ghana’s gold production reached 4.8 million ounces in 2024, with small-scale mining contributing significantly to the total output.
The Chamber of Mines projects gold output to range between 4.4 and 5.1 million ounces in 2025, driven by increased contributions from major mines such as Newmont’s Ahafo South Mine and Shandong’s Namdini Mine.
