Ghana stakes future on gold
October 5, 1996
Web posted at: 7:55 p.m. EDT (1155 GMT)
From Correspondent Gary Strieker
OBUSAI, Ghana (CNN) -- Let other countries chase after
computer companies and other high-tech industries.
In Ghana, a poor West African country near Nigeria, the
leaders see a glittering future in gold. As in the past, gold
is once again the driving force in the economy of this land
once known as the Gold Coast.
"Gold has overtaken cocoa as our main foreign exchange
earner. And there's room for so much more," Ghanaian
President Jerry Rawlings said.
Most of the world's major gold mining companies are already
in the country, digging, prospecting or negotiating with the
government for rights.
Gold fever is boosting mining operations across West Africa,
but particularly in Ghana, a formally Socialist country of 18
million people that is being transformed into a haven for
"The numbers of people and the types of companies show that
we are being taken seriously," observed Cabinet Minister
Richard Kwame Peprah.
Ghanaian gold is sought after for two major reasons: There
are proven reserves, and reforms in Ghana's investment code
translate into lower mining costs and higher profits.
"The fundamental change has really been the change in the
investment rules in conjunction with the increase in the
political stability of Ghana," said Colin Smith of Ashanti
Goldfields Corp., the leading mining company.
In Africa, Ghana is now second only to South Africa in gold
output. And while South Africa's production has peaked,
Ghana's is growing rapidly. Its total annual output is more
than 1.5 million ounces. That's nearly six times the output
of 14 years ago.
Ashanti Goldfields has invested $140 million this year in its
operations, mostly in the Obasi gold mine, one of the 10
largest in the world. Ashanti has been mining in Ghana for
more than a century.
Now privatized and listed on the New York Stock Exchange, the
company is developing mining projects in more than a dozen
"We are actually looking to explore in surrounding
countries," Smith said. "We have confidence in the region."
For decades, Ghana depended on cocoa as its biggest export.
But that commodity is vulnerable to drought, disease and
wildly fluctuating market prices.
The boom in gold mining depends on continuing political and
economic stability. The average per capital income still is
only about $450 per year.
Many Ghanaians have seen few benefits from economic reforms,
and they're waiting for the gold bonanza to trickle down to
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