Ghana : gold mining receives a big boost

Ghana : gold mining receives a big boost

Gold fields is going to invest US$1.4 billion in Ghana

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Gold Fields Limited

Gold Fields is a South African company based in Johannesburg, it was founded in 1998 when Glencor Limited and Gold Fields of South African Limited merged. Gold Fields is the seventh largest gold producer in the world and operates a total of eight mines in South Africa, Ghana, Peru and Australia.

Gold mining in Ghana

Gold exports make up over 90% of Ghana’s total mineral exports and as a result continue to be of significant importance to the countries mining industry as a whole. Ghana currently produces over 100 metric tons of gold a year, making it the second largest gold producer in Africa, beaten only by South Africa.

A number of different mining companies operate in Ghana but the two mines operated by Gold Fields are the Tarkwa Gold mine and the Damang Gold mine. Both of these mines are located in the southwest of Ghana in the district of Tarkwa-Nsuaem.

The Damang mine will now operate for at least a further eight years

In October 2016, Gold Fields confirmed their commitment to gold exploration in Ghana by pledging a further US$1.4 billion in investment to be over the next eight years. The money will be spent at their Damang mine, ensuring it remains in operation until at least 2024 as opposed to 2017.

gold-fields-ghana-2The Damang mine has been in operation for almost two decades since it opened in 1997, and to date has produced over four million ounces of gold. Output figures have however been declining for the last three years partly due to difficulties finding a highest enough grade of ore. Representatives from Gold Fields are however confident that further investment in the mine will stem this decline, in fact it is being forecast that the project will be able to produce over 1.56 million ounces of gold from a number of its open pits in the next eight years, guaranteeing the preservation and/or creation of over 1,850 jobs. These forecasted production figures equate to less than half of the 4 million ounces believed to be available for extraction in the Damang mine, and as a result could be considered to be conservative.

Nick Holland, the Chief Executive Officer of Gold Fields talked about their reinvestment plans in what they consider to be a key operating region for them, saying, “This is a first step in what may well be a much longer mine life in time to come,”, “This is a classic brownfields opportunity,” he then added, “It makes logical sense from all angles for us to do this.” (source)

Confidence in the mining sector continues to grow

Confidence in the gold mining sector is growing, in fact gold bullion prices in 2016 have climbed by 19% in London, following a three-year decline. It is expected that if gold prices continue to strengthen over the coming years and the mine can continue to operate profitably, it may even be possible for Damang to continue to operate past the new deadline of 2024.

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