Ghana has ordered all large-scale mining companies to sell 20% of their entire stock of refined gold at their refineries to the Bank of Ghana from Jan. 1, 2023, Vice-President Mahamudu Bawumia said on Facebook on Friday.
Ghana’s government is planning a new policy where gold rather than U.S. dollar reserves will be used to buy oil products. The move is meant to tackle dwindling foreign currency reserves coupled with demand for dollars by oil importers, which is weakening the local cedi and increasing living costs.
“The Bank of Ghana and the Precious Minerals Marketing Company (PMMC) will coordinate with the large-scale mining companies to ensure compliance with this directive,” the vice-president said.
“The gold to be purchased by the Bank of Ghana and the PMMC will be in cedis at spot price with no discounts,” he added.
Community mining schemes and licensed small-scale miners will also have to sell gold to the government, Bawumia said, without specifying how much of their reserves would be affected.
Bank of Ghana communications officer Sam Opoku said he could not confirm or deny whether Bawumia’s order was being considered.
A spokesperson for AngloGold Ashanti Ltd (ANGJ.J) said via email it had not yet received a formal directive on its gold reserves but looked forward to studying and engaging with the government once it does.
Gold Fields said neither the Ghana Chamber of Mines nor its Gold Fields Ghana unit had been formally approached on Bawumia’s plan and it could not comment, though it added that it and other miners had already agreed to a gold purchasing programme with the Bank of Ghana.
“We have commenced with this programme and will in total sell 15,000 oz to the Bank this year. Next year’s amount is still being finalised with the authorities,” a Gold Fields spokesperson said, referring to the company’s amount for this year under the programme.
Newmont Corp (NEM.N), Galiano Gold Inc (GAU.TO) and Asante Gold Corp (ASE.CD), which also have gold mines in Ghana, did not immediately respond to requests for comment.
An International Monetary Fund spokesperson did not immediately respond to a request for comment. Ghana is negotiating a relief package with the IMF as it faces its worst economic crisis in a generation.
Ghana produces crude oil but has relied on imports of refined oil products since its only refinery shut down after an explosion in 2017. It has seen its cedi currency plummet more than 40% against the U.S. dollar this year.