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The Minerals Commission has expressed fears of a possible complete shutdown of gold mining in Ghana should the price of the precious metal go down any further.
The plunge of gold prices globally in the past year has resulted in a significant drop in government revenues, temporary shutdown of some mines and massive layoff of workers.
Some analysts have predicted that gold will continue to drop to a price as low as 1100 dollars by next year, a value lower than what it is now.
Chief Executive officer of the Minerals Commission, Ben Aryeah bemoaned that even with the current price, the industry is in crises.
A further drop beyond the sustainable levels of the mining companies could lead to complete shutdown of the industry.
He noted that there is an “adjustment process which takes place in every mine and the mines will adjust to mine only what is profitable to them and nothing more than that so there is the concept of the cut off grade below which you will not make losses.
So if it gets to a point where the price is too low to mine, in the short term, they might continue to mine just to continue to take care of cost but over the longer term, they will suspend operations and possibly shut down.”
Source: Citi Business
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