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Ghana looks to diversify economy by refining its own gold, iron ore and other minerals

Ghana, Africa’s leading gold producer and one of the continent’s most resource-rich nations, is aiming to enhance its involvement in the value-added processing of its ores, a process known as ‘beneficiation.’

With a population of 33.7 million and a $75.6 billion economy, Ghana boasts abundant natural resources, including gold, silver, diamonds, manganese, and bauxite, mined from deep underground or offshore. Additionally, the country holds deposits of iron ore, limestone, columbite-tantalite, feldspar, quartz, and salt, with smaller reserves of ilmenite, magnetite, and rutile.

In recent years, Ghana has diversified its resource portfolio, with the discovery of commercial lithium deposits in 2018, prompting collaboration with international partners for mining and processing. Alongside, substantial oil and gas reserves along the coastline further bolster the nation’s economic prospects, with gold standing out as the primary revenue generator, contributing approximately 95% of mineral earnings.

The mining sector is pivotal to Ghana’s economy, attracting significant foreign direct investment, generating substantial export revenues, and contributing a sizable portion to GDP. However, the government aims to expand beyond mere extraction by prioritizing beneficiation initiatives to increase the value of raw materials, exemplified by plans for an integrated iron and steel value chain.

Despite hosting numerous mines, small-scale mining groups, and supporting service companies, employment figures in the sector remain underestimated, with Vice President Mahamudu Bawumia advocating for responsible mining practices and facilitating the transition of small-scale operations into larger, more sustainable enterprises.

Ghana’s mining sector experienced a resurgence in 2022 following a downturn induced by the COVID-19 pandemic, particularly in the minerals sub-sector, with gold leading the way. The government eyes further growth with the construction of new mines and expansion projects, projecting a substantial increase in gold output.

To capitalize on its mineral wealth, Ghana is pursuing various processing initiatives, including constructing a gold refinery and partnering with foreign companies for manganese refining. Plans for an integrated aluminium industry and local steel production from iron ore underscore the country’s commitment to value addition.

However, challenges persist, notably illegal mining activities wreaking havoc on forest reserves and posing environmental risks. While efforts to combat illegal mining are ongoing, regulatory changes aimed at increasing local participation in the mining industry may deter potential investors.

Despite these hurdles, Ghana remains optimistic about its mineral-rich future, emphasizing the importance of beneficiation to diversify its economy away from traditional exports like cocoa, gold, and oil.

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