Small-scale gold miners are sounding the alarm over what they describe as "woefully inadequate" prices offered by the newly established Ghana Gold Board (GoldBod), warning that the low rates are crippling their businesses.

The miners hold the view that the rock-bottom price set by the regulator could undermine the very objectives of the state-led gold purchasing scheme.

Christopher Asiedu, a member of the Small-Scale Miners Association, voiced the industry's growing frustration, lamenting that the current prices are causing widespread financial distress among their members.

"The rates offered by GoldBod are extremely low, causing businesses to take a nosedive," Mr Asiedu told Adom TV, highlighting the immediate economic impact on thousands of miners and their dependants.

According to Mr Asiedu, before the establishment of GoldBod, the prevailing market price for 10 grams of gold hovered between GH₵12,000 and GH₵13,000.

However, with GoldBod's intervention, this rate has plummeted to a mere GH₵8,200 for the same quantity.

This significant price differential represents a substantial cut into the miners' potential earnings, making it difficult to cover operational costs, repay loans, and sustain livelihoods.

He urged the government to review the pricing policy, advocating for an increase to at least GH₵11,000 per 10 grams.

This, he argued, would enable miners to "make enough profits to sustain operations."

The Ghana Gold Board (GoldBod) was officially launched on February 1, 2024, by the Bank of Ghana (BoG) as the sole, mandated institutional buyer of locally produced gold.

Its primary objective is to build Ghana's gold reserves, strengthen the cedi, and formalise the artisanal and small-scale mining (ASM) sector, which accounts for a significant portion of Ghana's gold output.

By accumulating gold directly, the BoG aims to enhance the country's balance of payments, bolster its foreign exchange reserves, and provide a stable, transparent market for local miners, thereby cutting out informal and often exploitative middlemen.

While Mr Asiedu expressed support for GoldBod's strategic introduction, he stressed the importance of competitive pricing to achieve its goals.

"We do not have a problem with the introduction of the GoldBod, but they must offer competitive prices because even if it is raised to GH₵11,000, no miner will complain," he asserted.

He further reasoned, "Those who purchased from us at GH₵12,000 and GH₵13,000 still made a profit. If it were not so, they would not buy at that price, so GoldBod should do better."

This sentiment reflects a core challenge for GoldBod to balance its mandate to build national reserves at a favourable price for the state with the need to offer a fair and sustainable price for miners.

If prices are too low, miners may be incentivised to divert their gold to informal channels or even resort to illegal means to dispose of their produce, undermining GoldBod's formalisation efforts and the government's broader initiatives.

Ghana is Africa's largest gold producer, with the mining sector contributing significantly to the national economy.

The artisanal and small-scale mining (ASM) sector plays a crucial role, accounting for roughly 30-40% of Ghana's total gold output.

It also employs an estimated over one million people directly and indirectly, supporting countless livelihoods in rural communities.

However, the sector has also been plagued by environmental degradation, particularly illegal mining (galamsey), and a complex web of informal trading.

Mr Asiedu reiterated the Small-Scale Miners Association's endorsement of the government's continued crackdown on illegal mining, or "galamsey".

This support aligns with broader national efforts to sanitise the mining sector and protect Ghana's environment, particularly its water bodies. The government has deployed various task forces, including Operation Halt, to combat galamsey.

However, a persistent concern among legitimate small-scale miners remains the alleged harassment by members of these anti-galamsey task forces.

Miners frequently report instances of extortion, destruction of equipment, and unlawful arrests, even when operating legally.

This highlights the ongoing tension between law enforcement efforts and the operational realities of the formalised small-scale mining sector, emphasising the need for stricter discipline and oversight within the task forces to differentiate between legal and illegal operations.