Ghana increases its gold purchases to 30% to bolster reserves
Central banks around the world are increasing their gold and silver holdings.
Written by Ziad Abdel Fattah:
The Ghanaian government announced today ThursdayIt reached an agreement with major mining companies to purchase 30% of its gold production starting from July 1st, in a move aimed at boosting foreign exchange reserves and developing local refining capabilities.
This move comes amid a growing trend among central banks globally to increase their holdings of gold and silver, driven by rising prices and the increasing appeal of precious metals as safe reserve assets.
Ghana is the largest gold producer in Africa.
Ghana is Africa’s largest gold producer, having launched its domestic gold purchasing program in 2022, before agreeing with mining companies, through the Ghana Chamber of Mines, to supply 20% of annual production to the central bank.
According to data from the Bank of Ghana, gold reserves rose to 19.2 metric tons last February. As part of its program development, the government restructured the program in February, aiming to reach 157 tons, equivalent to 15 months of import coverage, by 2028.
The negotiations included major mining companies such as Newmont, Goldfields and China’s Zijin, to increase the volume of sales directed to the country.
Under the new agreement, companies will supply 30% of their production to the government’s “Gold Board” in the form of raw gold, with pricing set at a discount of 0.55% from the central bank’s reference rate, and payment made in the local currency (Cedar).
This arrangement also aims to support at least one local refinery obtaining accreditation from the London Bullion Market Association (LBMA) by 2030, whereby gold will be refined locally before being shipped for stamping and calibration in preparation for being added to official reserves.
The state-owned GoldBod company continues to purchase the entire output of artisanal mining, as part of a broader strategy to increase gold reserves, thereby enhancing the country’s ability to withstand external shocks and provide dollar liquidity when needed.
