By L.M. Louw
21 February 2021 – While West African countries like Ghana, Burkina Faso and Mali continues to attract junior gold exploration companies, new players like Guinea, Liberia, Sierra Leone, and Nigeria have thrown their hats into the ring. WhyAfrica’s Hawks Eye is on gold in West Africa.
Despite the threat of a renewed outbreak of Ebola in several West African countries, exploration projects for gold are forging ahead. So why is WhyAfrica’s Hawks Eye on gold in West Africa?
Apart from prolific existing mining operation in Ghana, Mali, and Burkina Faso, new exciting greenfields projects in Guinea, Liberia and Sierra Leone are being resuscitated after being put on ice during 2020. And for those interested in Nigeria, WhyAfrica has first-hand information that Minutor Mining and Exploration Services are back in the field hunting for big Nigerian elephants. After getting his boots dirty in the Nigerian forest for a while, Riaan van der Westhuizen, Managing Director of Minutor, is returning to Abuja soon and will give a report on some interesting and exciting new discoveries. Look out for that update. Although Nigeria is not everybody’s cup of tea, Van der Westhuizen is a great believer that the country hosts incredible gold deposits, and he has the proof to back up his claims. Therefore, WhyAfrica’s Hawks Eye is firmly on gold in Nigeria and West Africa.
According to data analytics and consulting company GlobalData, West Africa gold production is expected to bounce back with 2.7% growth in 2021 after Covid-19 hit output in 2020. In 2020 mines like Endeavour Mining’s Hounde in Burkina and B2Gold’s Fekola project in Mali were temporary suspended, which resulted in a significant drop in gold production.
According to GlobalData, the pandemic had a significant impact on African operations, mainly during the early part of the second quarter of 2020, when, at one point, over one quarter of the region’s gold mines were on hold due to Covid-19 lockdowns.
“However, gold production in West Africa’s leading markets – Ghana, Burkina Faso and Mali – is expected to increase by 2.7% in 2021 to 8 million ounces (Moz) and grow to 8.4Moz by 2024 – a 1.6% compound annual growth rate (CAGR). Most of this growth is expected to originate from Ghana, where the production is expected to reach 3.9Moz in 2024 from a forecasted 3.6Moz in 2021,” states a recent GlobalData report.
According to Vinneth Bajaj, Associate Project Manager at GlobalData South Africa was particularly affected by the Covid-19 lockdowns, with operations at 35 gold mines suspended temporarily out of 56 on hold in the region.
“Although production in Ghana fell by 7.5% in 2020, the country experienced only a minimal impact on gold mining activities. It was among the first few countries to resume operations post a 21-day mandatory lockdown across the major metropolitan cities announced during March 2020.
“Production in Mali fell by 5.6% in 2020, owing to the Covid-19 operational disruptions across several mines, including the closure of the then AngloGold Ashanti/IAM Gold JV Morila and Sadiola mines. The country initially continued business activities, despite the outbreak. However, in December 2020, the government imposed a lockdown for 10 days, on the grounds of new Covid-19 cases,” says Bajaj.
Production in Burkina Faso is estimated to have grown by 2.1% in 2020 to 1941.8koz. The growth was mainly supported by higher output from Endeavour Mining’s Mana, Karma and Hounde mines with 36.3%, 3.1% and 6.3% growth, respectively. Furthermore, the commencement of Teranga Gold’s Wahgnion project in 2019 and West African Resources’s Sanbrado gold project in 2020 contributed towards higher output in 2020. Gold production in Burkina Faso is expected to grow at a CAGR of 3.8%, supported by 460koz of new gold production capacity.
Bajaj adds: “AngloGold’s Obuasi redevelopment project in Ghana will be a key boost to production in West Africa in 2021. The first phase has already been completed and the momentum of the second phase was maintained despite Covid-19 challenges. The project is expected to contribute up to 200 000 ounces of gold production capacity and is anticipated to begin in 2021.
“A total of 12 projects are currently under development across Ghana, Burkina Faso and Mali, which are expected to be operational by 2024, representing more than 1500koz of gold production capacity. These include Orezone Gold’s Bombore project and Volta Resource’s Kiaka gold project in Burkina Faso, AngloGold Ashanti’s Obuasi Phase 2 project in Ghana and African Gold Group’s Kobada gold project in Mali,” says Bajaj. WhyAfrica is keeping a close eye on gold projects across West Africa in 2021. In the longer term, Van der Westhuizen’s Nigerian efforts might just pay off. Early movers and risk takers are always rewarded in abundance, so continue following the Nigerian governments drive to diversify its economy. Minutor is already a major player in Nigeria. If you have the risk appetite, don’t get left behind.
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