Chamber of Mines expresses confidence in Obuasi Mine … to pour first gold by year-end

The Ghana Chamber of Mines has expressed confidence in the re-opening of AngloGold Ashanti’s (AGA) Obuasi Mine, as the mine is expected to pour its first gold by end of the year.

The mine’s gold production for the first 10 years is projected to average between 350,000 to 450,000 ounces. The direct benefits expected to accrue to the economy is estimated at US$5.3billion over the mine’s life. These benefits include payment of royalties, corporate tax, contribution by way of employment and transfers to the Community Trust Fund, and participation of local businesses in its supply chain.

Speaking after a ceremony to mark the mine’s reopening at Obuasi in the Ashanti Region, the Chief Executive Officer of the Chamber, Mr. Sulemanu Koney, said that it is refreshing to witness the mine’s reopening after nearly half a decade of difficult times.

“We are pleased because it signifies a new beginning for a mine that has been a significant and integral part of the development of Ghana – a mine that has given so much in terms of socio-economic development to the people of this nation and its investors.

“It shows that sometimes it is important to step back and put measures in place in order to improve your efficiency as a business and return even stronger,” he said.

AGA Obuasi Mine was placed on limited operations toward the end of 2014, and has been on care and maintenance since 2016 pending commencement of the mine’s redevelopment project.

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AGA Obuasi has projected that the redevelopment will deliver a modern, mechanised underground mining operation.

In June 2018, Parliament ratified AGA’s agreement with government to redevelop the Obuasi Mine into a profitable business once again.

The initial investment of the redevelopment project is US$881million, with the total investment projected to come to US$1.6billion during the 22-year life of the project.

Local businesses are expected to benefit immensely from the value chain of the mine, which will in turn stimulate indirect jobs and livelihood support activities in and around the catchment area.

The Obuasi Mine was once the biggest gold mine in the country and leading employer in the industry; but it became a high-cost producer and was unable to produce beyond 400,000 ounces since 2004.

The mine was struggling with over-age equipment, poor security, inadequate power supply, and the activities of illegal miners.

The 1st ViceChairman of the Chamber, Mr. Alfred Baku, congratulated the Board of AGA Obuasi Mine for not relenting in obtaining the needed funding to bring the mine back to life.

“There is no gainsaying the fact that AGA’s determination epitomises Ghana’s robust mining industry, which has remained resilient even amid global cost headwinds.

“We need to take advantage of the various opportunities mining offers to develop our communities, grow our economy, and provide the needed returns to all stakeholders,” he emphasised.

AGA Obuasi is expected to pour its first gold by the end of the year. Managing Director of AGA’s Obuasi Mine and President of the Ghana Chamber of Mines, Mr. Eric Asubonteng, indicated that the mine’s reopening is the result of teamwork and a sense of diligence to resuscitate the fortunes of the mine, adding: “We are glad that this has been achieved, and we are looking forward to a very successful life of mine. We thank the government and good people of Ghana for supporting the mine to achieve this significant milestone”.

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AGA Obuasi Mine’s redevelopment comes at a time when key gold producing companies in Ghana are reinvesting in their respective mines to raise production and continue operations using sustainable practices.

Mr. Graham Ehm, Executive Vice-President in charge of the Obuasi Project, said the company has come a long way since the difficult but necessary decision to suspend underground production in 2014.

“Looking back, the challenges facing Obuasi Mine were considerable; but through dialogue, cooperation and steadfast commitment to resurrecting this important contributor to Ghana’s economy, we have prevailed.”

He said since the suspension of operations, they had worked hand-in-hand with relevant stakeholders to forge a new path for the Obuasi Mine – one that builds on its history and spectacular endowment.

“The determination is to ensure that the project is rewarding and inclusive. The future of Anglogold Ashanti and that of the Obuasi community are inextricably linked,” he said.

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