Ghana’s quest for gold refining: Expert urges careful planning

Senior Africa Programme Officer at the Natural Resource Governance Institute (NRGI) Denis Gyeyir,   has emphasized the need for a comprehensive evaluation of the refinery’s potential, given the country’s history of unsuccessful attempts to set up similar facilities.

“Naturally, the prospect of any value addition to mineral resources should be good news, and so any attempts to establish a refinery in Ghana should be a welcome idea,” Gyeyir remarked. However, he stressed the importance of addressing underlying issues, noting that this is not the first time such an initiative has been proposed. “We’ve heard of refineries being planned since 2015, with little to no success. We must question why we always have to start refineries that do not end up operating as they should.”

Gyeyir pointed out that the Royal Ghana Gold Refinery, like previous efforts, lacks certification from the London Bullion Market Association (LBMA), limiting its capacity to refine gold from large-scale producers, which dominate the market. “What it is attempting to do is only refine gold from small-scale producers, which is just about 30% of the total. The large-scale producers have their contracts with established refineries abroad. It’s difficult to get them to sever these agreements for a refinery that doesn’t even have certification.”

The lack of LBMA certification is not the only concern. Gyeyir questioned the financial sustainability of the refinery, noting that such ventures are not typically highly profitable. “Refineries are really not very profitable enterprises. There is a prospect of creating jobs and retaining value within the country, but it also has downsides. What’s the sustainability plan going forward for this refinery?”

He also highlighted the need to learn from past failures in refinery projects and suggested that Ghana should focus on a broader value addition framework, including jewellery production, which could create more jobs and offer better economic prospects. “If we wanted to do refining properly, I think we should set the basis right before we start. But I also agree that value addition measures, including jewellery production, are important. This sector already has local operators, and helping them standardize and produce to international standards could drive greater value and employment.”

Gyeyir urged Ghana to consider a more comprehensive approach to mineral resource management, looking beyond just gold refining to include other minerals and broader value addition strategies. “It’s not just about gold. It’s about other mineral types and how we can use them to gain value for the operators in that sector. We should look beyond just refineries to a comprehensive value addition framework for our minerals.”

Mr Gyeyir’s position reflects a cautious optimism towards value addition in Ghana’s mining sector, but with a clear call for careful planning, certification, and a focus on sustainability to avoid repeating past mistakes.