Minerals Commission anticipate a dip in gold output by 17 percent this year after declining prices prompted some mines to cut production.

Benjamin Aryee, Chief Executive Officer of the Minerals Commission, told B&FT in an interview that data collected from some six major gold mining companies in the country has revealed a major decline in production of gold -- due largely to cost and price volatility.

“Gold volumes will definitely decline,” Aryee said. “The price slump is a matter of grave concern for the sector; companies are scaling down operations,” he said. Production retreated 6.4 percent in the second quarter to 1.021 million ounces from a revised 1.092 million ounces in the first quarter of 2013.

Gold production climbed to 4.3 million ounces in 2012 from 3.6 million ounces the previous year as global prices rose for a 12th consecutive year.

Prices slumped 19 percent this year as some investors lost faith in the metal as a store of value amid signs economies are strengthening. Gold reached US$1,180 an ounce in London on June 28, the lowest since August 2010.

Current price levels mean many companies “will have to lay off workers or close”, Aryee said.

Bauxite production fell to 193,876 metric tonnes in the second quarter from 249,114 tonnes in the first.

Diamond output increased to 40,868.93 carats from 35,988.38 carats, while manganese production slowed to 323,299 tonnes from 434,240 tonnes, said Aryee.

Daniel Owiredu, President of the Ghana Chamber of Mines, in a recent interview explained that the decline in international gold prices since the first quarter of 2013, combined with the high cost of operations, is leading companies to review their work plans and cut operating costs.

Spot gold has fallen by above 17 percent this year, and the country’s output of the mineral dipped by 3 percent in the first three months of the year. This could lead miners to “either reconsider or downsize projects”, Mr. Owiredu said.

Ghana’s gold production fell to 1.083 million ounces in the first quarter of the year, down by some 30,000 ounces from the last quarter of 2012, the Minerals Commission has said.

Gold is the country’s main source of foreign exchange income, which helps the Central Bank to accumulate reserves for supply to importers seeking to buy goods from abroad.

The gold industry, categorised into large-scale and small-scale miners, is estimated to directly employ 114,205 people made up of professionals like engineers, scientists, accountants and administrators; artisans like carpenters, electricians, plumbers, machine operators and drivers; and some unskilled labour.

An extended trend of falling output and depressed prices could continue to threaten jobs in the industry, as well as thousands of dependants. “While the depressed mood will adversely affect planned projects in the early part of the life-cycle, more advanced projects are expected to come on-stream,” Mr. Owiredu said.

Mineral revenue from producing members of the Ghana Chamber of Mines jumped by 14 percent last year to US$5.4billion from the US$4.7billion recorded in 2011. The increase was largely attributable to gold revenues, after the metal’s price increased by 7 percent in 2012.