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Ghana government expected to shift focus from mining as oil leads economy

  • SOURCE: | qwesa2big
  • The government of Ghana is expected to shift its attention from the mining sector following the emergence of the country’s oil sector, which is seen to be leading the economy since commercial production began on December 15, 2010, according to a Business Monitor International (BMI) Ghana Mining Report for the third quarter of 2011.

    The report says the shift of attention from the mining sector over the next few years will be necessitated by a drop in revenues from mineral output, expected to fall to 2.4% of GDP from 7.4% in 2010 by end of BMI’s 2011-2015 forecast period.

    Despite the fall however, BMI says it still sees a healthy mining sector growth going forward, “particularly as regards gold production, as a number of new projects come on line.”

    “We see further opportunities outside of the gold sub-sector with Ghana’s bauxite industry hoped finally to begin operating at its full potential following the acquisition of a majority share in the country’s Awaso mine by Chinese mining firm Bosai Minerals Group, ” it says.

    The takeover is expected to coincide with the building of an integrated aluminium production facility at the mining complex and we project overall bauxite production to increase by more than 60% over the forecast period, it indicated.

    According to BMI, Ghana’s share of global gold production has risen gradually in recent years as foreign investment in the mining sector has increased.

    “The country’s contribution to African gold production has grown more markedly still, increasing from 14.1% of overall output in 2006 to 19.7% in 2009 while gaining ground on the continent’s largest producer, South Africa. We expect production to continue to trend upwards over our mid-term forecast period,” it says.

    Citing preliminary statistics from Ghana’s Chamber of Mines, it says the country’s gold production grew at 2.5% in 2010 to 2.97 million ounces reflecting the positive trend in international gold prices over the year.

    It says gold production will continue to drive industry growth with several major new projects due to come on line over its mid-term forecast period.

    “The largest of these, Newmont Mining’s Akyem mine in the country’s Eastern region will add an additional 500kozpa to Ghana’s production when it begins operations by end-2013,” it adds.

    Meanwhile, Ghana’s Minister of Finance, Dr. Kwabena Duffuor said the government is expecting to earn GH¢1.2 billion from oil in 2011.

    In Parliament to seek approval for a supplementary expenditure for 2011 Thursday July 14, 2011, he said the estimate was based on the new oil price assumption of $100 per barrel as well as the revised estimated average oil production of  84,737 barrels per day and the new exchange rate assumption, total revenue from oil including the National Oil Company’s carried and participation interest.

    He however indicated that, of this amount the Benchmark Revenue is estimated at GH¢923.4 million.

    The remaining, he said is the amount due the Ghana National Petroleum Corporation (GNPC) as its equity and cash ceded to it.

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