Ghana’s mining sector could be plunged into chaos should the price of gold continue to plummet on the world market. The Minerals Commission, which disclosed this, said the current price of gold had adversely affected industry operators.

The falling price of gold globally in the past year has resulted in a significant drop in government revenues, provisional shutdown of some mines and massive layoff of workers. According to some analysts, the price of gold would continue to drop from its current price to as low as $1,100 by next year.

Chief Executive Officer (CEO) of the Minerals Commission, Ben Aryee, in an interview with journalists recently, indicated that even though the industry was suffering from the effects of the price tumble, the situation could worsen next year.

He indicated that if the current situation worsens in the short-term, miners might continue to mine to cover costs, adding that mining companies would suspend their operations with the possibility of shutting down in the long-term.

Already, the price drop has adversely affected the sector with a number of job cuts planned in the fourth quarter of this year. Newmont Ghana, for example, has indicated that it would lay-off about 300 of its employees in the fourth quarter of this year.

In a statement it circulated recently, the company said the employee reduction reflects its efforts to improve increasing cost structure while creating value for all its stakeholders.

The company noted that it had notified the Chief Labour Officer and began discussions with the Ghana Mine Workers Union on a Memorandum of Understanding (MoU) to outline the pay-out package for the affected employees.

“Ongoing price volatility and steadily rising costs create intense pressure for us to continuously improve our efficiency and effectiveness to ensure our operations are profitable and sustainable.

“We face some very difficult decisions in streamlining our organization and are committed to treating people fairly throughout this process,” said Dave Schummer, Regional Senior Vice President – Africa Operations.

Due to the plummeting gold price on the world market, most mining firms are taking steps to reduce operational cost.