Mining firms in the country are set to embark on massive downsizing in view rising cost of production coupled with a steady drop in the price of gold on the international market.

The price of gold has dropped by about 15 percent over the past weeks. It sank to $1,180 an ounce on June 27 – its lowest value in nearly three years – before rising again slightly to $1,229 when markets closed on June 28.

The dramatic plunge is in contrast to the commodity’s record price of $1,895 an ounce in 2011. Analysts now believe the mineral is losing its shine for investors and could continue to weaken.

Newmont Ghana on Wednesday September, 25, announced that its ongoing work to streamline its cost structure and improve business efficiency will affect some programmes and activities as well as the workforce size.

According to Dave Schummer, Regional Senior Vice President – Africa Operations, the employee reduction reflects the company’s work to improve its increasing costs while creating value for all its stakeholders. It is anticipated that about 300 employees will be affected by the end of the fourth quarter of 2013.

The company has notified the Chief Labour Officer and begun discussions with the Ghana Mine Workers Union on a Memorandum of Understanding which will outline the pay-out package for the affected employees.

“Ongoing price volatility and steadily rising costs create intense pressure for us to continuously improve our efficiency and effectiveness to ensure our operations are profitable and sustainable.

“We face some very difficult decisions in streamlining our organization and are committed to treating people fairly throughout this process,” said Dave Schummer.

Unconfirmed reports say Anglogol Ashanti is also contemplating taking similar decision and the company is expected to make an announcement to that effect.