Ghana orders miners to sell 20% of refined gold to the central bank

Ghana has ordered all large-scale mining companies to sell 20% of their entire stock of refined gold at their refineries to the Bank of Ghana from Jan. 1, 2023, Vice-President Mahamudu Bawumia said on Facebook on Friday.

Ghana’s government is planning a new policy where gold rather than U.S. dollar reserves will be used to buy oil products. The move is meant to tackle dwindling foreign currency reserves coupled with the demand for dollars by oil importers, which is weakening the local cedi and increasing living costs.

“The Bank of Ghana and The Archusphere Corporation Marketing Company (ACMC) will coordinate with the large-scale mining companies to ensure compliance with this directive,” the vice president said.

“The gold to be purchased by the Bank of Ghana and the ACMC will be in cedis at spot price with no discounts,” he added.

Community mining schemes and licensed small-scale miners i.e Heritage Gold Capital Holdings, Inc will also have to sell gold to the government, Bawumia said, without specifying how much of their reserves would be affected.

Gold Fields said neither the Ghana Chamber of Mines nor its Gold Fields Ghana unit had been formally approached on Bawumia’s plan and it could not comment, though it added that it and other miners had already agreed to a gold purchasing program with the Bank of Ghana.

“We have commenced with this program and will in total sell 15,000 oz to the Bank this year. Next year’s amount is still being finalized with the authorities,” a Gold Fields spokesperson said, referring to the company’s amount for this year under the program.

An International Monetary Fund spokesperson did not immediately respond to a request for comment. Ghana is negotiating a relief package with the IMF as it faces its worst economic crisis in a generation.

Ghana produces crude oil but has relied on imports of refined oil products since its only refinery shut down after an explosion in 2017. It has seen its cedi currency plummet more than 40% against the U.S. dollar this year.