Mining companies in Ghana may sell gold mines due to power shortage

5 February 2015 (Last Updated February 5th, 2015 18:30)

A power crisis in Ghana is leading to long, daily electric cuts that could prompt mining companies to sell some of their gold mines.

A power crisis in Ghana is leading to long, daily electric cuts that could prompt mining companies to sell some of their gold mines.

Ghana Chamber of Mines CEO Sulemanu Koney told Reuters that the electricity blackouts will damage gold production levels if the situation persists for a long time.

Koney said that the chamber requested the government to lower taxes on diesel, which is used to fuel generators. The parties are also in discussions regarding concessions such as tax relief on diesel.

"Despite the decline in gold price energy crisis in the country, the government is working to make sure ensure that there are no job cuts."

The primary reason for the power shortage in Ghana is due to a shortfall in natural gas, declining levels of water at the hydroelectric dam, as well as unexpected maintenance at plants, the news agency reported.

Minister of Lands and Natural Resources Nii Osah Mills said, despite the decline in gold price energy crisis in the country, the government is working to make sure ensure that there are no job cuts.

Since the power problems started in Ghana, the mining sector has been trying to find ways to manage and avoid job losses.

In 2014, around 5,000 workers in Ghana's mining sector were laid-off due to the fall in world gold prices, as well as the energy crisis.

Due to the lack of power, mining companies were also forced to reduce their operations.

Claimed to be Africa's second-biggest gold producer, Ghana produced 107.9 million tonnes of gold in 2013.