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11.06.2006 Business & Finance

Gold overtakes cocoa

By JFM
Gold overtakes cocoa
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Ghana has recorded a significant increase in all mineral productions in 2005 with gold taking over from cocoa as the leading foreign exchange earner for the country.

Mineral revenue went up from 798 million dollars in 2004 to 995.2 million dollars in 2005 contributing about 13 per cent of the total collection of Internal Revenue Service in the year under review.

Gold production recorded an increase of 63 per cent with its export revenue increasing from 731.2 million dollars to 903.9 million dollars.

The 2005 annual report of the Chamber of Mines released at its 78th Annual General Meeting held in Accra said bauxite revenue increased from 11.9 million dollars in 2004 to 18.1 million dollars in 2005, while diamond rose from 26 million dollars to 34.7 million dollars.

Manganese exports realised 39.1 million dollars in 2005, up from 30.2 million dollars the previous year. The chairman of the Chamber’s Council, Mike Ezan said despite the increase in production and revenues, the mining industry witnessed extremely high input prices particularly for diesel fuel, sodium cyanide and earth moving equipment tyres.

According to him, the high input prices dampened what could have been an impressive year for the global mining industry in general and Ghana in particular.

He said the mining companies for the 2005, returned about 48 per cent of their export earnings to the country to support their operation and also to fulfil their retention obligation to the Bank of Ghana.

"This is significantly higher than the minimum 25 per cent stipulated by the Mineral and Mining Law PNDCL153," he said.

Mr Ezan noted that the challenges of railing manganese and bauxite to the Takoradi Port compelled both Ghana Manganese Company and Ghana Bauxite Company to haul significant portions of their production by road transport, which increased their costs at a time the prices of both commodities were at an all-time low.

He called on the Government to expedite action on the restructuring of Railway Sector saying the under-performance of the Ghana Railway Company remained of grave concern to them as it had negatively impacted on their production."

Mr Ezan said the quality of supply of electric power in the country was deteriorating, as the mines experienced frequent interruptions that were causing the industry several millions of dollars annually as well as the overall revenue to the Government.

He pledged the Chamber's commitment to uphold the concept of sustainable development in the business of mining by ensuring that companies integrated environmental initiatives into their management systems, structures and incentives.

The Council Chairman expressed satisfaction that the year under review achieved about 80 per cent compliance with mining environmental regulations and standards.

Under the payment of mineral royalties to mining communities, Mr Ezan advocated 30 per cent as against the current figure of 10 per cent.

"This amount is inadequate for the stimulation of infrastructure development in the mining communities." He said royalties paid in 2005 amounted to 25.9 million dollars.

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