Ghana's overall mineral proceeds increased from 658.8 million dollars in 2001 to 679.8 million last year, recording a three per cent growth.

The recovery in the price of gold accounted for the improvement in revenue, Mr Kweku Andoh Awotwi, Acting President of the Ghana Chamber of Mines, said in a report he submitted at the 75th Annual General Meeting of the Chamber in Accra on Friday.

Mr. Awotwi, however, painted a gloomy picture of the mining sector when he gave the breakdown of the performance of the minerals.

Gold production suffered a 14 per cent decline between 1999 and 2002 although the gold output of countries in the rest of Africa with the exception of South Africa increased by 14 per cent in 2001.

He warned that Mali was poised to take over from Ghana as the second largest producer of gold in Africa if Ghana did not take measures to improve its competitiveness.

Diamond production fell by nine per cent between 2001 and 2002 and suffered a 14 per cent decline in revenue due to lower unit prices.

Bauxite exports also fell by 9.5 per cent with a revenue decline of 14 per cent as a result of lower unit prices for the mineral in 2002 compared to 2001.

Manganese export stabilised at 1.2 million dollars while the output fell by 11 per cent with a marginal increase in revenue of 0.2 per cent due to the improved unit prices from 20.8 dollars per ton in 2001 to 23.4 dollars per ton in 2002.

Mr Awotwi said the output of the bulk minerals, manganese and bauxite, suffered primarily because of the poor state of rail network that links the mines in Awaso and Nsuta to the port in Takoradi and the low capacity of vessels that load the mineral.

Ashanti Goldfield Company continues to be the industry leader, accounting for 46 per cent of the country's gold production representing a marginal increase of one per cent over the 2001 figure of 45 per cent.

Mr Awotwi spoke against the charging of Value Added Tax on mineral exploration activity and explained that it was a deterrent to attracting exploration investment into the country since it is becoming a "high risk investment."

He said delay in passing the Mining Bill into law was discouraging investments in the sector while investment capital continues to flow to other mining countries.

He appealed to the government to reconsider any attempt to increase the royalty paid by the mining companies since such royalties add extra fixed costs to project cost even before their commencement

Mr Awotwi said mining was an energy intensive economic activity hence the need for government to address the high tariffs mining companies pay coupled with the competitive rates for energy requirements.

He highlighted efforts being made by miners to check environmental degradation mentioning guidelines to ensure proper handling of hazardous goods meant for the industry and donation of 20,000 seedlings towards the President's Special Initiative on Forestry.

"According to the Environmental Protection Agency, the industry achieved over 75 per cent compliance with the mining environment regulations and standards in 2002.

"With the introduction of the reclamation bonds, 1.5 million dollars and 240 million cedis in cash in addition to 4.8 million dollars in bank guarantees and insurance have been posted for the reclamation bonds."

Mrs Joyce Wereko-Brobby, Chief Executive of the Chamber, stressed that mining companies attached importance to the promotion of good environmental practices to win public confidence.