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Prolonged power crisis could hurt Ghana’s gold output – chamber of mines

GHANAGOLDGhana’s power crisis, which has seen long electric cuts on a nearly daily basis, will hurt gold production if it is prolonged, the chief executive of country’s Chamber of Mines, Sulemanu Koney, told Reuters on January 5.
Gold is one of the country’s main revenue earners, contributing more than 11 percent to annual GDP, but the industry has been affected by a fall in global prices. The government says it is taking steps to remedy the power situation by the end of the year. ‘It is a major constraint and the net effect is that your costs go up and your margins are squeezed,’ Koney said, adding that power from the national grid constitutes 25-30 per cent of mining production costs. ‘For companies which are already marginal, it’ll mean they are just being pushed out of business. Survival becomes the name of the game,’ he said.
The government is battling to address the electricity shortfall, grappling with its total of 2 000 megawatts to adequately distribute electricity to the entire country. The energy ministry says it intends to increase power production to 2 770 MW to the national grid this year, but many consumers face near daily power cuts of 24-hours or longer. Koney said the government asked the mines to provide a third of their power needs from diesel generators. The Chamber is in talks with government on concessions including tax relief on diesel, he added.
Ghana’s main gold producers include Africa’s top bullion producer AngloGold Ashanti, Newmont and Gold Fields. AngloGold mothballed its loss-making flagship Ghana mine at Obuasi last year.

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