Ghana minerals mining gold

Ghana looks to diversify economy by refining its own gold, iron ore and other minerals

Ghana looks to diversify economy by refining its own gold, iron ore and other minerals
Gold Fields’s Tarkwa open-pit, gold mine is the biggest mine in Ghana. / Gold Fields
By Jason Mitchell March 11, 2024

Ghana, Africa’s biggest gold producer and one of the continent’s most mineral-rich countries, aims to become a lot more involved in the ‘beneficiation’ or value-added processing of its ores. 

The country — with a population of 33.7m and a $75.6bn economy — is blessed with myriad natural resources, including gold, silver, diamonds, manganese and bauxite. Most are mined deep in the ground under the land or sea.

It is also endowed with deposits of iron ore, limestone, columbite-tantalite, feldspar, quartz and salt. There are also minor deposits of ilmenite, magnetite and rutile.

In 2018, Ghana discovered commercial quantities of lithium and is working with international partners to develop lithium mining and processing. It also has significant oil and gas reserves along the country's coastline from Cape Three Points in the west to Keta in the east. Gold is the most commercially exploited mineral, accounting for around 95% of the country’s minerals revenue. 

The mining sector plays a vital role in the economy, attracting more than half of all foreign direct investment and generating more than one-third of all export revenues. It is the largest tax-paying sector in the country and contributed 7.6% to GDP in 2022, up from 4.5% in 2021.

In the second quarter of 2023, the country’s mining and quarrying sub-sector contributed around 5.8bn Ghanaian cedis ($454m) to the country's GDP, according to the Statista website. However, the government wants the country to become a lot more involved in ‘beneficiation’ — the transformation of a primary material (produced by mining and extraction processes) to a more finished product that has a higher export sales value. For example, it wants to create an integrated iron and steel value chain. 

In 2020, Ghana had 23 mines excavating minerals, 300 registered small-scale mining groups and 90 mine support service companies. In 2022, the Ghana Chamber of Mines said its member companies employed 11,284 people directly. However, that figure significantly underestimates the number of people working in the industry. 

Mahamudu Bawumia, the country’s vice-president, estimates that more than one million people are engaged in small-scale mining. He will represent the governing New Patriotic Party (NPP) in presidential elections on 7 December 2024 (Nana Akufo-Addo — the current president who has been in power since 2017 — will not be standing again).

Bawumia says one of the government’s goals should be to help small-scale miners to practise “responsible” mining. It should enable small-scale mining companies to grow into large-scale firms with capacity building and skills and to access financing for equipment. 

In 2022, the mining and quarrying sub-sector — including oil and gas — rebounded strongly with 8.1% growth following a -12.2% contraction in 2021 in the wake of the COVID-19 pandemic. The jump was driven by the minerals sub-sector, which expanded at 25% in 2022. Gold was the biggest contributor, with its production rocketing by 32.3% in 2022. In 2022, gold generated $6.6bn in export revenue for the country — while manganese and bauxite generated $186m and $19m, respectively. Overall, Ghana's receipts from minerals covered 39% of its total exports in 2022.

The country’s gold production from the biggest mining companies soared to 3.08m ounces (oz) in 2022 from 2.2m oz in 2012, according to Samuel Abu Jinapor, the country’s Minister of Lands and Natural Resources. In the small-scale sector, output jumped to 655,656 oz from 98,001 oz over the same period. The primary gold deposits in Ghana are located in Obuasi, Damang, Prestea, Tarkwa, Abosa, Bogoso and Bibiani.

Ghana’s mining sector pre-dates the colonial era. Historically, the country was known as the Gold Coast. Traditionally, its mining production was state-owned but, beginning in the 1980s, the country moved toward privatisation and state divestiture, including by attracting foreign investment.

Today, the biggest mining company is Gold Fields — one of the world's largest gold mining firms, headquartered in Johannesburg — which operates mines in Tarkwa and Damang. Tarkwa — its flagship mine — is the single biggest mine in the country, maintaining production steady at more than 500,000 oz a year.

Other major mining companies include Newmont, a US gold mining company, and AngloGold Ashanti, a global mining company headquartered in Johannesburg. Other gold mining companies include Perseus Mining, Golden Star Mining, Kinross Gold, Endeavour Mining and Green Gold Mining. 

In February 2024, three new gold mines were under construction — one by Newmont in the country’s middle belt; one by Cardinal Namdini, part of the Chinese state-owned miner, Shandong Gold, in the northern part of the country; and another by Azumah Resources, an Australian mining company, also in the northern part. Cardinal Namdini’s project is expected to pour gold first this year. With these new mines —and the expansion of existing ones — analysts expect gold output to jump to around 4.5m oz a year. 

The government also says a 400kg-capacity gold refinery has been constructed through a public-private partnership and that it was at the final stages of negotiations for a London Bullion Market Association certificate. 

In 2023, Ghana was the fourth-largest global producer of manganese ore, exporting over 4m metric tonnes (mt). However, the country lacks refining capacity, with 95% of the manganese ore being exported to China. Consmin, a Chinese mining company, owns about 90% of the Ghana Manganese Company (GMC), which operates the country's largest manganese mining sites. Seven regions have manganese deposits — Upper-West, Ashanti, Western, Northern, Central, Upper-East and Eastern. The primary deposits are at Nsuta in the Western Region. 

In February 2024, the Ghanaian government unveiled plans for a $450m joint venture manganese refinery project involving the GMC and Ningxia Tianyuan Manganese Industry Group, another Chinese mining company. It will be located close to GMC’s Nsuta mine in the Western Region. 

Ghana is also well-endowed with diamonds — it has more than 11m carats of diamond reserves located 110km north-west of Accra, the capital city. It is mostly mined at Akwatia in the Birim and Bonza diamond fields. Currently, the country produces more than 500,000 carats of gem-stone and industrial diamonds per year.  

It has about 900m mt of bauxite resources. Deposits can be found in Ashanti, as well as the Western and Eastern regions. The four major deposit sites are Kibi, Aya-Nyinahin, Ejuanema and Sefwi–Bekwai. The government wants to strategically leverage the bauxite resources to build an integrated aluminium industry. 

Ghana enjoys three significant iron ore deposits — Oppong Mansi, Shieni and Pudo. Iron ore mining companies include Maurla Mines Ghana, Gold Coast Resources, Minergy Resources and Inland Ghana Mines. By 2027, the government would like to process its iron ore locally for steel production. It has signed agreements with eight companies to assess the country’s iron ore deposits.

The deposits are estimated to have an average grade of 36% — far below the premium grade of 52% to 65%. Lower-grade ores contain more impurities, making them less energy efficient to process, with more carbon emitted than with purer varieties. The government has created a new company, the Ghana Integrated Iron and Steel Development Corporation (GIISDEC) to harness iron ore resources for an integrated iron and steel industry.

The tonnage and commercial value of the deposits have not yet been determined. As exploration continues, only one site in the country’s west is estimated to possess a higher grade of 55%, according to the Ghana Geological Survey Authority.

Ghana’s plans for iron ore processing are part of the country’s push to take advantage of its natural resources to grow its economy instead of exporting raw materials. In the case of iron ore, the rationale is that making steel domestically will provide the building blocks for international development while also creating jobs. 

Limestone is one of the main ingredients used to make cement. Deposits can be found at Oterkpolu, Nauli, Buipe and Bongo-Da. It is estimated that Ghana enjoys more than 230m mt of limestone reserves. The GHACEM limestone quarry at Yongwa, established in 2014, is one of the biggest in Ghana. Silver deposits are also found at the Ahafo mine in the Brong Ahafo Region and the Akyem operation in the Eastern region near New Abirem.

In October 2023, the government approved the country’s first lithium mine at Ewoyaa on the southern coast, in a deal that will see the development of a lithium processing plant in the country. Barari DV Ghana, a subsidiary of Atlantic Lithium, was granted a 15-year lease. 

Sub-sectors with the biggest business opportunities include setting up refinery facilities to serve the local industry for value-added products and producing clinker for the mining industry. Demand for clinker, the backbone of cement production, is estimated at more than one million metric tonnes a year. There is also a need for investment, equipment and services to develop the country’s store of critical minerals, including chromium, lithium and zinc.

However, widespread illegal mining activities are destroying the country's forests, according to the government's forestry agency. Since taking office in 2017, President Nana Akufo-Addo has promised to rid the country of "galamsey," the name given by locals to these illegal mines where deadly accidents frequently occur, but vice-president Mahamudu Bawumia seems to have adopted a more relaxed approach. 

It is estimated that around 34 of the country’s 288 forest reserves have been impacted by illegal mining. The total area destroyed is estimated at 4,726 ha. Authorities regularly launch operations against illegal sites, including removing excavators but the practice continues. An upsurge in violent clashes between mining companies and illegal small-scale miners in their host communities at the start of last year could hinder more investment in the sector if a solution is not found, according to the Ghana Chamber of Mines.

In Ghana, mineral rights are granted to private parties giving them the right to mine the minerals in the ground. However, the government is entitled to a 10% equity interest in the mineral operations, even it if does not make a financial contribution. The government can increase its participation in mineral operations by agreement with the investor. The small-scale mining industry is reserved exclusively for Ghanaians.

Tightening localisation policies increasingly limit the market for foreign goods and services providers to the mining sector.  The localisation requirements in Legislative Instrument 2431 (2020) on Minerals and Mining (Local Content and Local Participation), for example, require licence holders to create a localisation programme for recruitment and training of Ghanaians, imposes quota limits on expatriate hires (up to two in management with the general manager position reserved for Ghanaians). 

It places time limits on other expatriates, moving progressively towards full Ghanaian participation at senior levels. It also establishes target levels and requirements for the procurement of local goods and services that support the mining industry (including R&D, technical and engineering services, insurance, accounting, legal, and financial services as well as security, transport and fuel provision).  Finally, licence holders can be required to list at least 20% of their equity on the Ghana Stock Exchange. Analysts say that the country’s regulations regarding localisation change frequently, which could put investors off the industry.  

Ghana’s abundant gold reserves have been mined for a long time and new mines mean that gold output is likely to increase even further in the future. The country has plentiful reserves of other minerals, as well. The government had decided to limit the export of ores in their raw form, as it wants the country — the world’s second-largest cocoa exporter — to diversify its economy away from its reliance on exports of that crop, as well as gold and oil.

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Ghana minerals mining gold