Government has announced plans to establish two refineries to process and add value to the country’s gold.

One of the refineries would be funded by the Precious Minerals Commission and the other would be funded through foreign direct investment.

Addressing the Ghanaian community at Massachusetts, USA President Mahama said the gold refineries would not only create jobs but reduce the risk of losing millions of cedis in the event of any fall in gold prices on the international market. 

Ghana is Africa's 2nd largest gold producer, producing 80.5 t in 2008. Export earnings from minerals averaged 35%, and the sector is one of the largest contributors to Government revenues through the payment of mineral royalities, employee income taxes, and corporate taxes. In 2005, gold production accounted for about 95% of total mining export proceeds.

Despite this background, the country does not have a gold refinery.

John Mahama said the setting up of these refineries will give Ghana the opportunity to market its gold like other African countries do.

“It is my belief that if we are able to set up these refineries then we will also be able to market gold like South Africa does. I am looking forward to the day where we will have a gold bar that has the ‘Gye Nyame’ stamp on it saying 99 percent pure”.

The mining industry of Ghana accounts for five percent of the country’s Gross Domestic Product (GDP) and minerals make up to 37 percent of total exports, of which gold contributes over 90 percent of the total mineral exports.

However, the fall in gold prices on the international market in recent years has had adverse effects on the Ghanaian economy with some mining companies closing down while others are retrenching their staff.  

But President Mahama said the refineries when set up would encourage mining companies to carry out their activities throughout the year, unlike the current state where most of them are compelled to shut down anytime the price of gold falls on the international market.