Ghana’s gold production is expected to surpass that of any other African country, currently making it the 7th largest gold producer in the world, and they have strengthened their position by enhancing their infrastructure and adding new features. This good news may attract investors, but first, let’s understand – why Ghana is the ideal place to invest in gold, along with its expansion, which has increased opportunities for investors.

 Why is Ghana the ideal place to invest in gold?

Kumfi, a worker in Ghana’s gold mining sector, is a small-scale or artisanal miner. He shared some insights about Ghana’s gold, predicting that the country’s mining industry will see growth of $249.6 billion by 2026. He is the fourth-generation worker who works at AngloGold. The AngloGold Ashanti Obuasi Mine is an underground gold mine located near Obuasi, Ghana’s Ashanti Region. He also said that in 2022, the AngloGold Ashanti Obuasi Mine was able to successfully increase its production by 132%, which significantly contributed to Ghana’s success in the 2021 year. After undergoing care and maintenance in 2016, the mine reopened in 2019. With these efforts, Kumfi proudly said Ghana has now become one of the top producers in Africa. Like Kumfi, an increasing percentage of citizens believe that Ghana’s gold has a bright future ahead of it and that there will be more chances for investment due to the growing demand.  Kumfi also explained why Ghana is undoubtedly the perfect place for any investor who wants to invest in Ghanaian gold. 

Gold reserves: Ghana has a large number of gold deposits. The country produced 2.8 million ounces of gold in 2021 and 3.7 million ounces in 2022. Ghana has an estimated reserve of 20 million ounces of gold, a significant economic boost for both the world and Ghana as a leading gold producer. This expansion of existing mines and an increase in production from both small-scale and large-scale miners have contributed to the increase in production. Their production has increased significantly.

The Bank of Ghana introduced a gold-buying programme in 2021 aimed at strengthening the country’s economy. The goal of these features is to increase the nation’s foreign exchange reserves, boost investor confidence, stabilise the local currency, and ultimately benefit all Ghanaian citizens, which not only benefits Ghanaian citizens but also provides a new layer of direct investments for foreign investors.

High in Quality and Purity: Ghana possesses a wealth of diverse mineral resources, including gold, diamonds, manganese, and bauxite. However, among the heavily mined minerals, gold has a high quality.

The golden substance has an unequal quality.  Ghana’s impure gold, commonly known as gold d’ore, typically has an average fineness rating of 23 carats. This fineness rating surpasses the majority of other current percentages that refer to 24-carat gold as pure gold, indicating a high level of purity. This is more contrasting evidence. For example, Ghana operates large-scale metal refining operations, such as Royal Ghana Gold, which refines approximately 400 kg of gold daily. It also aims to produce differently denominated gold bars, silver bars, and minted products such as coins with 999.5%–999.9% purity levels, whose security features have made fraud virtually impossible. 

Government support: Like Kumfi, many people are benefiting from increased government support. Ghana’s government mandated the Precious Minerals Marketing Company (PMMC) to assess, grade, value, and process precious minerals, purchase and sell them, and contribute to the development of Ghana’s jewellery industry. This government action also benefits exporters. 

Insights from countries reliant on Ghana’s gold

Royal Mailika is among the most noted companies importing Ghanaian gold. In their statement, they express why they have chosen Ghana. “Our company has been working since 1900, and we strongly value heritage norms. Over the past 1000 years, Ghana has had a long and rich history of gold mining, starting as an official commodity in 1890. This long-term expertise implies that they possess extensive knowledge of technological advancements in mining, leading to improved methods of extraction and processing. Some of the top mining companies, such as AngloGold Ashanti, Gold Fields, and Newmont, continue to operate in Ghana, deeply rooted in active mining operations. Ghana’s strategic position as a trading and export hub along the West African coast is another blessing for us.”

Globally, Ghana’s gold has a huge impact on the global economy. Some countries directly participate in Ghana’s export-import system, while others do so indirectly. Some countries that import gold from Ghana include the United Arab Emirates, Switzerland, China, Turkey, and India. The UAE is the No. 1 largest importer of Ghana’s gold, and the second largest is Switzerland. 

Future  scope 

Africa’s largest gold mining company, AngloGold Ashanti, owns and operates the Obuasi mine in the southern Ghana region. In June 2018, the Ghanaian government approved the project’s refurbishment to a state-of-the-art mechanized facility, with the launch made in January 2019. The redevelopment cost around £423 million ($545 million), and it was going to happen in two phases. The completion of phase one in 2019 led to an increase in the ore processing capacity to 2,000 metric tons per day. But that’s not all; phase two was expected to double that capacity to 4,000 metric tons per day by the end of 2020. 

The main goal of this project is to tap into more than 30 million ounces of undeveloped gold resources. In the first ten years of production, they’re looking at pumping out around 400,000 ounces of gold annually. The average grade of gold will be 8.1 g/t in the first ten years, potentially increasing to 450,000 ounces in the following decade.  

The extension in output from small-scale manufacturers was the main driver of the production growth, as Ghana’s gold output shot to 4 million ounces this year from 3.7 million ounces in 2023. 

With these facilities, there are many co-factors that also make it easier for investors to make the decision. There is no doubt that one investor should invest in gold in Ghana, but it’s also important to consider the type of investment that best suits their needs.

Should you invest in gold or gold mining?

Normally, investing in gold would involve buying physical gold like bars or coins and making long-term purchases of stocks related to gold and mines. People typically view such an investment as a protective measure against inflation and economic instability. Investing in gold mines, on the other hand, entails purchasing shares in companies that directly mine for gold or indirectly through mutual funds or exchange-traded funds (ETFs), which concentrate on such businesses. This could potentially yield higher profits should prices go up, since mining firms’ earnings and stock prices depend on the value of this metal. However, it comes with greater risks due to operational difficulties and market volatility.

Thus, it relies on the goals one has set. A risk-taker can invest in gold mining, while a safe-play investor can potentially invest in gold.