The President of the Ghana Chamber of Mines, Michael Edem Akafia, has cautioned that despite record-high global gold prices, Ghana’s mining industry is facing significant headwinds that limit the sector’s expected windfall.
Speaking on Joy News’ PM Express Business Edition last Thursday, Mr. Akafia said the surge in gold prices creates both opportunities and pressures, often overlooked by those outside the industry.
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“Well, absolutely. Generally, you would say that rising gold prices should be good news. But like all things, there are two sides to it, the upside and the downside,” he explained.
According to him, the benefits of high gold prices are quickly offset by rising operational costs, as suppliers and contractors adjust their pricing to reflect the market trend. “When people look just at the gold price, that doesn’t tell the whole story. Input prices are almost adjusted accordingly, which means margins are not as big as everyone expects,” he said.
Mr. Akafia added that mining companies are often compelled to exploit marginal reserves at higher costs to avoid sterilising their concessions. “When the gold price goes up, you may have to mine portions of your concession that are usually not profitable. But mining those areas comes at a higher cost, so the margins are thinner than people think,” he noted.
On production trends, the Chamber president revealed that while small-scale mining has seen significant growth — jumping from 1.1 million ounces to 1.9 million ounces — large-scale output has stagnated at 2.9 million ounces. “That stagnation is telling a story. It shows that there are real challenges in the industry,” he stressed.
Mr. Akafia warned that the limited pipeline of new exploration projects poses a risk to the long-term sustainability of Ghana’s mining sector, despite the current high gold prices.
His remarks come at a time when gold has maintained strong global demand, boosting government revenues from royalties and taxes. However, industry analysts say without addressing structural challenges such as exploration bottlenecks, high production costs, and regulatory delays, Ghana’s mining sector may struggle to fully capitalize on the commodity’s bullish run.