Ghana will maintain its position as Africa’s largest gold producer next year, after surpassing South Africa in terms of gold production in 2019, according to assessment of the gold mining industry in Africa by Fitch Solutions.

It expects gold production in the country to achieve 9.0% growth year-on-year next year, reaching 4.7 million ounces of gold.  

AngloGold poured its first gold at the Obuasi mine in December 2019 during Phase 1 of the project, and in October 2020 the firm reported that Phase 2 of the project is 68.4% complete. While the Obuasi project targets a ramp up to 2,000 tonnes per day (tpd), operational rates have been limited to 60.0-70.0% of capacity throughout much of 2020 amid Covid-19-induced labour shortages.

According to the report, the country’s expected substantial growth next year will come on the back of achievement of steady operations at Phase 2 of AngloGold Ashanti’s Obuasi Project. This will sustain the Gross Domestic Product (GDP) growth rate of the mining sub sector.

“We forecast gold production in Ghana to achieve substantial growth in 2021 on the back of the achievement of steady operations at Phase 2 of AngloGold Ashanti’s Obuasi Project.”

The report emphasized that “the firm currently expects to achieve a steady state of operation in 2021, increasing Ghana’s gold production by approximately 350-400koz per year during the first 10 years of Obuasi’s mine life. In turn we expect Ghanaian gold production to achieve 9.0% growth y-o-y in 2021, up from 2.0% growth in 2020, reaching 4.7moz of gold.”

Gold investments to shoot up

Elevated gold prices on the back of global economic uncertainty will bolster gold mining investment in Ghana. 

Gold prices have rallied in 2020 amid the Covid-19 pandemic, and “we now forecast an average annual price of $1,850/tonne in 2020”, Fitch Solutions said.

In quarter three 2020, a second wave of the virus hit Europe and the United States, prompting a widespread reinstatement of lockdown and preventative measures which will dampen investor sentiment going into 2021, and support demand and prices of safe haven assets including gold. Furthermore, the report said should a successful Covid-19 vaccine fail to be approved and rolled out across developed markets during the first half of 2021, this would delay the economic recovery.

“As such we expect persisting elevated gold prices to encourage foreign investment in the Ghanaian gold sector.” it said.

Gold price is presently hovering around $1900 per ounce.