Business News of Saturday, 16 June 2012
Source: Daily Guide
The operations of Ghana Bauxite Company are being disrupted as a result of the company’s inability to transport a chunk of its ore to the Takoradi Port.
The deplorable state of the Western Rail Lines is negatively affecting the company, which is a major producer of bauxite in the country.
Dan Owiredu, President of the Ghana Chamber of Mines, who disclosed this, noted that “the situation is so dire that the very viability of Ghana Bauxite Company, located in Awaso, about 240 kilometres from the Takoradi port, is now under serious threat. Indeed the company has been racking up losses in the last few years due largely to its inability to haul the tones of ores it produces effectively and efficiently.”
He said the state of the Western Rail Lines had compelled the company to haul the ore from its mines to the Takoradi port mainly by the more expensive road mode.
Mr. Owiredu, who was speaking at the 84th Annual General meeting of the chamber in Accra, stated that “Government has indicated in the 2012 Budget statement of its intent to reconstruct the Western Line. The mining industry waits with serious anticipation for the initiation of the project since its successful completion will bode well for other sectors of the economy as well.”
He noted that bauxite shipments reduced significantly by 22 percent from 512,208 tonnes in 2010 to 400,069 tonnes in 2011, leading to a corresponding decrease in export sales from US$15, 145,755 in 2010 to US$ 13,406,433 in 2011.
He stated that the Ghana Statistical Service (GSS) also reported that the mining sub-sector grew by 14.3 percent in 2011 as compared to the 8.3 percent it recorded in 2010.
“By this growth, the mining industry was the third behind the Oil & Gas and Construction sub-sectors which were up by 192.2 percent and 20 percent respectively. The sector accounted for approximately GH¢1 billion of revenue collections, representing 27.61 percent of total Ghana Revenue Authority’s collections in 2011,” Mr. Owiredu emphasised.
He noted that “in exercise of its prerogative government increased the taxes and introduced a windfall profit tax. Although government had not clearly defined the details of the proposed windfall profit tax, the sudden announcement did not only adversely affect values of mining stocks held on international bourses but also informed some mining companies to hold back some significant investment decisions in the sector.”
He indicated that the Precious Minerals & Marketing Company (PMMC)’s total purchases and export of gold from small-scale miners decreased by 32 percent from 346,861 ounces in 2010 to 235,787 ounces in 2011.
According Mr. Owiredu, “Asap-Vasa, a wholly Ghanaian-owned gold refinery, exported 10,173 ounces of gold in 2011 compared with the 17, 133 ounces in 2010 representing a decrease of over 40 percent over the same period.
“On the other hand, Ghana Manganese Company demonstrated a solid 2011 performance with the export of manganese increasing by 53 percent from 1,193,665 dry tonnes in 2010 to 1,827,692 dry tonnes in 2011.”
On the outlook for 2012, the President stated that “Ghana’s gold output is expected to increase marginally on the back of fresh production sources coming from Owere Gold Mines, Perseus Mining and Noble Gold Mines.”