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Ghana to Halt Gold Exploration Permits

Ghana has officially announced it will stop issuing new prospecting permits for a 90-day period. The countrys minerals commission said the 90-day stoppa...

|May 22|magazine6 min read

Ghana has officially announced it will stop issuing new prospecting permits for a 90-day period. The country’s minerals commission said the 90-day stoppage will be used to work on making an inventory of unused concessions as well as auditing the government to free up permits that can be reallocated.

The West African nation, which has been experiencing a major drop in gold production of late, could be at risk of losing its gold exploration permits for good. Tony Aubynn, the commission’s head, informed Reuters the three-month moratorium on new warrants could be extended if necessary.

"There is need to clean up the system because we have realised that many companies are holding on to vast concessions granted them several years ago without undertaking any prospecting work on them," Aubynn said.

The country’s laws allow gold miners to hold their licences for up to three years, after which they are expected to apply for a mining lease. According to Aubynn, several companies had been holding land for more than a decade.

"So we are saying that when you get your licence and we see you don't do any prospecting on the land, we would have to apply the law and take it from you," he said

As the second biggest producer after South Africa, Ghana was hit hard in 2013 by a slump in global gold prices. The country produced 4.29 million ounces of gold in 2013. To make matters worse, an estimated 50,000 foreign workers were operating unlawfully in the country, prompting the government to take action and create a taskforce in May last year to control the issue.

While new exploration permits are on hold, Australia-based Azumah Resources and Canada’s AsankoGold have begun operation and expected to pour its first gold by early 2016.  Newmont Mining poured its first gold last October.

"We believe that production from these three mines will not only help us to recover fully but they will also provide the needed revenues to support the country's medium-term growth potentials," Aubynn added. 

According to Aubynn, Ghana should recover from the global gold downturn by 2016 when production from two new mines boosts output.

The largest gold miners operating in Ghana include Newmont Mining, AngloGold Ashanti and Gold Fields