Gold production in Ghana less competitive as costs surpass global average

The Ghana Chamber of Mines has expressed concerns over escalating costs of gold production in Ghana, painting a worrying picture for the local mining sector.

According to the Chamber’s data, the average cost of producing an ounce of gold in Ghana surged from US$1,436 per ounce in 2022 to US$1,542 per ounce in 2023, representing a notable 7.4% increase.

These rising production costs were attributed to various factors, including reduced gold production, inflation in mining consumables prices, and increased government imposts.

In comparison, the global average All-In Sustaining Cost (AISC) for gold production rose from US$1,233 per ounce to US$1,299 per ounce over the same period, indicating a higher growth rate for Ghanaian gold producers.

Speaking at the 96th Annual General Meeting which climaxed the 17th West African Mining and Exhibition and Power Conference, the President of the Chamber , Mr Michael Akafia highlighted the growing disparity between Ghana’s AISC and the global average.

The spread between the two increased from US$203 per ounce in 2022 to US$243 per ounce in 2023, underscoring the mounting cost pressures faced by gold producers operating in Ghana.

Moreover, the narrowing margin between the gold price and production cost in Ghana, compared to global averages, raised concerns about the country’s mining sector’s competitiveness. In 2023, the margin for global producers stood at US$642 per ounce, while Ghanaian producers only retained a margin of US$398 per ounce, highlighting a significant discrepancy.

The slower rate of growth in Ghana’s margin, at 9.4%, as opposed to the 13.1% increase for global producers, signalled a worrisome trend of declining competitiveness in the country’s gold mining industry.

The development underscores the urgent need for strategic measures to address cost pressures and enhance the sector’s sustainability and long-term viability.