The Bank of Ghana has procured 3,500 ounces of gold from Newmont Ghana as part of its Domestic Gold Purchasing Programme intended to shore up foreign reserves.
This makes Newmont the first gold mining company to respond to this initiative from the central bank. Under the programme, the bank requires an estimated amount of 10,000oz of gold annually from members of the Chamber of Mines over the next four to five years.
Newmont, according to a press release from the company, will provide about 30 percent of the required amount annually based on its market share within the mining industry in Ghana.
Regional Senior Vice President of Newmont Africa, Dave Thornton, in a statement, said his outfit is ready to support the novel initiative from the central bank.
“While mining companies in Ghana were prepared to support the programme, there was the need to ensure that the initiative met the governance, risk, compliance, and supply chain requirements of their various companies.
“Newmont proactively engaged the Bank of Ghana on the governance, risk, compliance, and supply chain requirements associated with the deal. Following which it signed an agreement that met all the requirements of both parties in December 2021.
“Newmont’s pioneering leadership in such a gold sale agreement is expected to be emulated by other mining firms in the country. It is also a further demonstration of Newmont’s commitment to creating value, and its contribution toward maintaining the fiscal stability of the country,” he said.
The domestic gold purchase programme, according to the Bank of Ghana’s Governor, Dr. Ernest Addison, will pave the way for the central bank to grow its foreign exchange reserves to foster confidence, enhance currency stability, and create a more attractive environment for foreign direct investments and economic growth. It will further enable the bank leverage its gold holdings to raise cheaper sources of financing to provide short-term foreign exchange liquidity.
“Bank of Ghana views the gold acquisition programme as an efficient way of growing the foreign exchange reserves of the country to supplement the traditional ways that Ghana has built reserves over the years. Among others, this will help reduce our dependence on more expensive ways of building reserves.
“The Gold purchasing programme will bring revolution to the small-scale gold mining sector. Ghana’s domestic purchasing programme for gold has the potential to improve the small-scale gold mining sector by guaranteeing that they receive a fair purchasing price for their gold, provide an incentive to formalise and move away from damaging environmental and social practices.
“It would also lead to a route to formalise and improve ability to sell into formal gold markets, and thereby reduce their vulnerability to illegal actors in the domestic and international gold supply chains,” he said during the launch of the programme last year.