Ghana Mining Report Q2 2010
Business Monitor International, March 2010, Pages: 40
Ghana Mining Report provides industry professionals and strategists, corporate analysts, mining associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Ghana's mining industry.
Rio Concludes Awaso Sale To Bosai
In February 2010, Rio Tinto concluded the sale of its 80% stake in the Awaso bauxite mine to Chinese firm Bosai, following Ghanaian government approval of the deal. The value of the sale was not revealed. The move comes as Rio Tinto seeks to concentrate its investments on larger-scale mining projects and divest its smaller projects. Previously, Rio Tinto had sought to develop an integrated alumina refinery at the Awaso mine site, but lack of demand and poor infrastructure saw this project shelved. In 2008, Awaso produced some 802,000 tonnes of bauxite.
New Data For 2010, the authors have made significant changes to the way in which we forecast mining data. As well as using local statistics agencies and associations, we now also draw on the expertise of the UN’s Industrial Commodity Statistics Database, the US Geological Survey and the World Bureau of Metal Statistics for our historical export and production data. We then forecast this data using our own proprietary econometric model. Human intervention also plays a necessary and desirable role in our mining forecasting; experience, expertise and knowledge of industry trends and developments ensuring that we can spot likely future changes and anomalous data that a purely mechanical model would not.
Country Overview Ghana contains the second largest area of gold deposits in the African region after South Africa. The nation derives the bulk of its external revenue from gold mining, which accounts for over 90% of Ghana’s total mineral exports. Apart from gold, Ghana also produces significant quantities of bauxite and diamonds. The country is also counted among the top five nations across the globe for its manganese ore production. Ghana is home to some of the biggest names from the global extractive industry: Gold Fields, Newmont Ghana and South Africa’s AngloGold Ashanti.
In 2008, overall revenues from the Ghanaian mining sector reached US$2.3bn, an increase of 28% yearon- year (y-o-y), according to figures released by the Ghana Chamber of Mines in June 2009. Gold revenues stood at US$2.2bn, with output of 2.6mn oz (up 4% y-o-y) selling at an average realised price of US$852 per oz. Manganese revenue was up by a stellar 69%, to US$62.34mn, while bauxite revenue was essentially flat, at US$19.81mn. No full-year figures for 2009 were available as this report went to press. Though the mining industry has been successful in attracting foreign capital, it has also been subject to criticism from the Ghanaian government, environmentalists and human rights activists. Foreign players have been known to exploit legal loopholes and abuse both human rights, as well as the environment. However, stakeholders in the mining sector claim that regulations pertaining to compensation need to be updated, as the price levels for valuing crops, livestock and landed property have not been reviewed for a number of years. They also point out that in other African countries, such as Tanzania, the state pays the compensation and not the miner.
The basic law governing the mining industry is the Minerals and Mining Act 2006 (Act 703). Under the law, the president holds the power to grant mining rights. However, the pressure to amend the law and allow farmers to have a say in authorising their lands for mining activity is increasingly gaining favour in the country, and is being seen as a necessary move to crack down on the rampant exploitation of the environment by mining industries.
Industry Forecast Ghana’s mining sector holds great potential. The country is regarded as stable, with clear regulatory standards governing the industry. Ghana is already Africa’s second largest producer and exporter of gold, and is among the global top-five in manganese ore production.
Moreover, with gold being Ghana’s principal mining asset and prices remaining strong, forecasts for the mining sector in Ghana are more positive than those of some of its African neighbours. In calculating its forecasts, the authors have also taken account of the vast untapped potential of Ghana’s mining industry. As such, we expect the value of the mining industry to increase from US$0.76bn in 2010 to US$1.72bn in 2014.
Executive Summary
SWOT Analysis
Ghana Political SWOT
Ghana Economic SWOT
Ghana Business Environment SWOT
Industry Trends And Developments
Overview
Regulatory Structure And Developments
Key Projects
Bauxite
Gold
Manganese
Diamonds
Business Environment
Africa Mining Overview
Africa Mining Business Environment Ratings
Table: Africa Mining Business Environment Ratings
Ghana’s Business Environment Ratings
Political Environment
Industry Forecast Scenario
Commodities Forecast – Copper
Table: BMI Copper Forecast
Table: Copper, 2005-2011
Commodities Forecast – Aluminium
Table: BMI Aluminium Forecast
Table: Aluminium, 2005-2011
Commodities Forecast – Lead
Table: BMI Lead Update
Table: Lead, 2005-2011
Global Industry Overview
Global Industry Overview
Ghana’s Mining Industry Forecast
Table: Ghana’s Mining Industry Forecast, 2007-2014
Competitive Landscape
Table: Key Players In The Ghanaian Mining Sector
Company Monitor
AngloGold Ashanti
Gold Fields
Newmont Ghana
Global Assumptions Q210
Table: Global Assumptions, 2007-2014
Table: Developed States’ Real GDP Growth, 2007-2012
Table: Emerging Markets Growth, 2007-2014 (%)
Table: Global And Regional Real GDP Growth And Exchange Rates, 2007-2014
Business Environment Ratings Methodology
Table: Mining Business Environment Indicators
Table: Weighting Of Components
- AngloGold Ashanti
- Gold Fields
- Newmont Ghana
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