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UPDATE 1-Ghana power crisis to hurt gold output if prolonged -chamber of mines
February 5, 2015 / 11:25 AM / 3 years ago

UPDATE 1-Ghana power crisis to hurt gold output if prolonged -chamber of mines

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ACCRA, Feb 5 (Reuters) - Ghana’s power crisis, which has seen long electric cuts on a nearly daily basis, will hurt gold production if it is prolonged, the chief executive of country’s Chamber of Mines, Sulemanu Koney, told Reuters on Thursday.

Gold is one of the West African state’s main revenue earners but the industry has been affected by a fall in global prices. The government says it is taking steps to remedy the power situation by the end of the year.

“It is...a major constraint and the net effect is that your costs go up and your margins are squeezed,” Koney said, adding that power from the national grid constitutes 25-30 percent of mining production costs.

“For companies which are already marginal, it’ll mean they are just being pushed out of business. Survival becomes the name of the game,” he said.

Many consumers face near daily power cuts of 24-hours or longer. Koney said the government asked the mines to provide a third of their power needs from diesel generators. The Chamber is in talks with government on concessions including tax relief on diesel, he added.

Ghana’s main gold producers include Africa’s top bullion producer AngloGold Ashanti, Newmont and Gold Fields. AngloGold mothballed its loss-making flagship Ghana mine at Obuasi last year. (Reporting by Kwasi Kpodo; Writing by Matthew Mpoke Bigg; Editing by)

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