The rebirth of a century-old mine is cementing Ghana’s crown as Africa’s biggest gold producer.
On Wednesday, AngloGold Ashanti Ltd. and President Nana Akufo-Addo marked the first gold pour at the Obuasi mine in southern Ghana since operations were idled in 2016. The decision to reopen the mine rings in another two-decade run for an asset with a history dating back to 1897.
Obuasi is expected to add as much as 400,000 ounces or more per year to Ghana’s output, almost a 10th of what the West African nation produced in 2018 when it overtook South Africa as the continent’s biggest gold producer.
For Ghana, the additional gold will boost foreign earnings at a time when growth in oil production is slowing and create hundreds of jobs in a region where poverty is rife.
AngloGold first curtailed output at Obuasi in 2014 as soaring costs made production unprofitable, before losing control over the mine when illegal miners invaded the property in January 2016. Barrick Gold Corp. Chief Executive Office Mark Bristow turned down an opportunity to jointly redevelop the mine during this period, when he was still leading Randgold Resources Ltd., casting a shadow over the future of the operation.
It was only in 2018 that AngloGold approved spending as much as $545 million on the redevelopment of the mine into a mechanized, modern operation. The decision expanded the company’s African footprint outside of South Africa, where it’s now selling its last remaining assets.
African operations, excluding those in South Africa, contributed 44% to AngloGold’s revenue in 2018. Gold accounted for 40% of Ghana’s exports in the first 10 months of 2019.