Gold production declined by 5 per cent in 2013 as declining prices and the Obuasi Mine's challenges drove the industry into a slump, according to official figures.
Output fell from 4,324 million ounces in 2012 to 4.12 million ounces last year following a 28 per cent drop in the metal's price which was the first annual fall in 13 years.
The value of gold produced in 2013 was $5.8 billion, compared to $6.5 billion in 2012, when output jumped by 17 per cent.
"Low gold prices are not motivating mining firms to increase production. Once the price of the commodity is going down, the incentive is not there to produce more. The lower rate makes it unprofitable for mining companies to mine low-grade ore,” a senior official of the Minerals Commission told the B&FT.
“Anglo Gold's Obuasi Mine's operational challenges also had an effect on production during the 2013 operational year,” the official said.
Data from the Minerals Commission show that Gold Field's Tarkwa Mine produced about 15.34 of the output and was the largest single contributor, followed by Newmont which produced 13.84 percent.
Small-scale mining contributed around 35 percent of production during the period under review.
Diamond production also fell by 25 percent, from 215,3.18 carats in 2012 to 160,821 carats in 2013. Bauxite and manganese, however, recorded an increase in production. Bauxite output rose by 37 percent to 908,586 metric tonnes and manganese improved by 15 percent to 1.724 million metric tonnes in 2013.
Gold contributes about 95 per cent of the country's mineral export revenue, but experienced its most difficult year for more than decade in 2013.
The consequences of the price-drop for the mining industry have been grave. Many companies reconsidered investment plans and cut jobs-to lower costs.
The fall in earnings has also put pressure on the country's foreign reserves and contributed to the rapid slide of the cedi in the past year.