Indian precious industry likely to gain from 2007-'08 budget

Import duty on CPD expected to be removed; introduction of presumptive tax regime

Post By : Diamond World News Service On 20 February 2007 12:00 AM
WATER shortages in Ghana could soon start to have power and cost implications for AngloGold Ashanti, Gold Fields and Golden Star, all of whom have significant gold mining operations or projects in the West African country. Tarkwa is the biggest gold producer in Ghana producing 676,800 ounces in the 12 months to June 30, 2006, while Damang produced 248,000 ounces during the same period. Gold Fields produces more than 4.2 million ounces a year In South Africa, Ghana and Australia.%%Gold Fields, which operates the Tarkwa and Damang mines in Ghana, said in a statement late Thursday that it has been advised by the Volta River Authority to reduce its power consumption by around 50% due to the low water level of the Volta Dam, which is affecting hydro-electric power generation in Ghana. While it said it has the capacity to reduce its electricity consumption from grid power by utilizing emergency diesel power generators, Gold Fields said a full month of this alternative power generation would add around US$4 million to operating costs. Fortunately for Gold Fields, it will benefit from a decision it took to fix its Ghana diesel costs at around $56/barrel.%%Gold Fields’ statement came shortly after a statement issued by AngloGold Ashanti which did not quantify the size of the electricity consumption cut it was expected to impose on itself. AngloGold Ashanti, which gleaned just over 10% of is global gold production from Ghana in the three months to end June, said in a statement it is not yet clear how the shortage will impact its Obuasi, Iduapriem and Bibiani mines. It said it will be meeting with the Volta River Authority (VRA) to discuss potential disruptions to its power supply%%Significantly, production costs at these mines ranged between US$406 and US$412 an ounce compared to the company’s average production cost of US$305 an ounce.
The Company, along with the other mining companies, expects to meet with Government and the Volta River Authority in the coming week to better understand the situation and to discuss the implications of the power shortage on the start up of the Bogoso Sulphide Expansion Project, following which additional information will be provided.
Golden Star goes on to comment that historically, the Volta Reservoir is replenished by rainfall on an annual basis and, assuming that rain will replenish the Volta Reservoir this year, this should result in an increase in water levels in the reservoir in the September to October period resulting in increased power generation efficiency.

Be the first to comment

Leave a comment

Email Alerts

WhatsApp Alerts