Agyapa deal to fund construction of world-class gold refinery – Finance Minister
Government has indicated it will use proceeds of its Agyapa deal to fund Ghana’s first world-class gold refinery.
The NPP government has already committed to build a state-owned refinery but it is now revealing funding sources for the project in a country, once called the Gold Coast.
This planned project is one of the reasons the government says it created the Agyapa Royalties Ltd, formed to receive significant gold royalties from more than a dozen mines to attract investments.
The minerals company will then float 49% stake on the London Stock Exchange and the Ghana Stock Exchange, hoping to attract at least $1billion.
While controversies over the deals transparency is being resolved through wider consultations, the government has now publicly spoken about the benefits of the deal.
“We don’t even have an international standard refinery for all the gold that we have mined and so we have to invest in that,” the Finance Minister said on JoyNews, Newsfile, monitored by theghanareport.com.
The Finance Minister was appalled that despite mining gold, at least since the 15th century, the country still exports unprocessed gold for peanuts.
Unprocessed gold has been selling averagely at about $1,200 per oz while it cost many more times after processing.
Ghana is the second largest gold producer in Africa and the 9th in the world and the country exported at least 4.6m oz in 2017.
The mining industry of Ghana accounts for 5% of the country’s GDP and minerals make up over 37% of total exports of which gold contributes over 90% of the total mineral exports.
But Ghana’s first time to establish a gold refinery was truncated following the overthrow of the first president Dr. Kwame Nkrumah while the Tarkwa Gold Refinery was nearing completion.
Ghana’s largest mine is Tarkwa, owned by Gold Fields Ghana, a subsidiary of the South Africa-based Gold Fields, which is the world’s seventh-largest gold company by production.
Despite Tarkwa’s contribution to mineral resources, social development has severely lagged.
Lamenting what he described as Ghana’s “poverty of ambitions”, the Finance Minister said the world-class gold refinery is one of the projects to make Ghana a more significant player in an industry from which it benefits little.
Already, there is a gold refinery, the Royal Gold Ghana Limited, being constructed by the Akufo-Addo government.
It is at least 90 per cent complete and is expected to be ready for operations next month, the Ministry of Lands and Natural Resources has revealed.
The $25 million project has the capacity to refine 300 kilograms of raw gold a day and is being constructed by Shaporji Pallonji Ghana Limited.
It is expected to reduce the volume of exported raw gold by some 50%.
The Finance Minister also said Agyapa deal will create the largest royalties company in Africa and will help fund investments in the construction of district hospitals announced by the president.
The Minister also said government plans to establish the National Development Bank through monies made from the deal.
The ‘wholesome’ bank, he explained, would provide funding for venture capital and EXIM banks.