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Decline in gold prices forces Mining Companies to cut cost

The Ghana Chamber of Mines has stated that the decline in international gold prices in the first quarter of 2013, combined with the high cost of operations might force mining companies to cut operating costs and review work plans.

According to the Minerals Commission, 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.

“We are a little bit concerned about the behavior of the gold price; we have seen a dip unseen for thirty years; ie over 30% dip which is very significant and normally you have cost been a bit more sticky than price and that reduces margin.” said the Chief Executive Officer of the Ghana Chamber of Mines, Dr Toni Aubynn.

The implication of this development according to him is that “most companies tend to review their strategies on staying viable and if the behaviour of the gold price does not improve, there could be cost cutting, which may affect employment in the sector as well.”

Spot gold has fallen by 17.2 percent this year, and the country’s output of the mineral dipped by 3 percent in the first three months of the year.

By: Lorrencia Nkrumah/citifmonline.com/Ghana

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