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Business News of Tuesday, 9 August 2016

Source: B&FT

Bullish prediction put gold price at US$1,500 by year end

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Despite the global mining industry witnessing three continuous years of slump arising mainly from the plummeting commodity prices, especially gold, latest bullish prediction has it that gold is likely to hit US$1,500 by close of the year.

General Secretary of the Mineworkers’ Union, Prince William Ankrah, made the observation when he addressed the National Executive Council (NEC) of the Union in Kumasi last week.

According to Mr. Ankrah, the upward surge is certainly good news for the industry even though bearish commentary ascribes the recent jump to two factors, namely; the British exit from the EU, and the quantitative easing by the US Federal Reserves, which they posit could be short-lived.

The consequential effect of the trend, Ankrah notes, has seen a drastic reduction in the rate of redundancies compared to the same period last year. “From 648 employees in the first half of 2015 to 156 employees in 2016 for the same period, representing a positive variance of 492 or a 75% drop in the rate of redundancy”.

He however noted that matters of income inequality is widespread and fast-growing amidst tensions among stakeholders which favours a few privileged Ghanaians and the expatriate community. The Union’s research department showed that the top 10% of the population, made predominately of expatriates, earned 49.8% of the overall income share, the bottom 10% made of junior staff earned only 3.1% of the total income share.

Therefore, Mineworkers’ Union (GMWU) has set as its new strategy, the bridging of this inequality gap, correcting income /skills mismatch and placing appropriate prices on skills in line with global benchmarks to see mineworkers earn decent work pay as well as decent pensions.

A word was also spared for the menace of illegal mining which gravely affected mining activities during the first half of the year. The onslaught on the concessions of legally registered businesses in the sector has reached uncontrollable levels, according to the General Secretary of GMWU.

He said the activity has reached a crescendo where AngloGold Ashanti, out of desperation, has filed a suit against the government at the International Court of Arbitration. The safety and security of mining companies cannot be guaranteed with attacks by illegal miners.

He commended government for amending the Minerals and Mining Law (Act 703) to deal effectively with the menace. The Mineworkers signaled their resolve to withdraw their services if the situation remains unattended to.

He also welcomed the passage of the Mineral Development Fund bill targeted at socio-economic development of mining communities.

Additionally, the debilitating impact of the energy sector crisis on the mining was also not spared commentary.