Ghana Mining Report Q2 2016
BMI View: Ghana's mining sector will remain heavily reliant on gold production and, as such, will facesevere headwinds over the next few years as prices of the commodity come under increasing pressureglobally.
Latest Developments & Structural Trends
Ghana's mining sector growth will be affected by a lack of diversity, as the country's gold sector accountsfor about 90.0% of total mineral exports. An ongoing decline in global prices will therefore pose a majorthreat to the growth of Ghana's mining sector going forwards, with prices forecast to average USD1,045/USD during 2016-20120. Falling prices will put increased pressure on the profit margins of the country'sgold miners, with many firms, including market leader Newmont Mining, moving to cut expenditure inthe face of falling revenues. Despite gold price weakness, the country's mining sector will remain animportant component of Ghana's economy through the next few years.
Gold mining firm Rangold Resources has ended a contract for redeveloping AngloGold Ashanti'sObuasi gold mine in Ghana. The move follows efforts by both the companies to improve the project'sreturns. The companies had announced a deal in September 2015 to form a joint venture to redevelop andoperate the mine. Randgold had agreed to lead and fund a development plan designed to rebuild theoperation. As such, we revised our gold production forecast for Ghana down from -1.6% to -2.5% and0.5% to -1.0% for 2016 and 2017, respectively.
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