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 Source:  Mineral Commission, Ministry of Mines, Mbendi 

Mining accounts for 5% of the country's GDP and minerals make up 37% of total exports, of which gold contributes over 90% of the total mineral exports. Thus, the main focus of Ghana's mining and minerals development industry remains focused on gold. Ghana is Africa's 2nd largest gold producer, producing 70 t in 2003. Gold production reached 2,143 Moz in 2005. Production is dominated by homegrown Ashanti Gold Fields, which produced nearly half at 37 t from its five mining operations. Ghana is also a major producer of bauxite, manganese and diamonds.

The country currently has thirteen large-scale mining companies producing gold, diamonds, bauxite and manganese, and, there are also over three hundred registered small scale mining groups and ninety mine support service companies. Several other organisations are involved in producing building and industrial minerals in the country. In 2005 Ghana's mining sector saw diamond production reaching to 1,065,923 ct, bauxite production reaching to 606,700 t and manganese production reaching to 1,719,589 t.

Ghana's economic geology is centered around Proterozoic rocktypes, notably the Birimian and Tarkwian systems. The Proterozoic Birimian belt in West Africa hosts nearly all of the known gold deposits in Ghana, Burkino Faso and Cote De Ivoire. The Ashanti Gold Belt of SW Ghana, part of the volcano sedimentary Birimian Belt, includes seven producing mines. Gold mineralisation in the Birimian is mainly in the form of auriferous quartz veins of 'reefs' and as sulphide ore. Tarkwian system rocks consist of a thick series of argillaceous sediments resting unconformably on the Biriman. Gold is found in these sediments, occurring as blanket reefs or conglomerate beds, similar to those of the Witwatersrand in South Africa. Alluvial diamonds, about 80% of industrial grade, are produced on a large scale. Primary kimberlites have yet to be found.

Constant power supplies to mining operations have been disrupted in Ghana due to drought, resulting in a drop in production of many gold mining operations. The Volta River feeds into the Volta Dam, whose hydroelectric scheme supplies almost all of Ghana's electricity. To avoid recent acute drought leading shutdowns and loss of revenue, the Ghana government, mining companies and other private investors have teamed-up to build alternative sources of power and have become less dependent on the hydroelectric source of energy.

Mineral Policy and Legislation

Mining and minerals were a specific and integral part of the Economic Recovery Programme. New legislation was promulgated, financial incentives were introduced, new state institutions were set up and major rehabilitation of state-owned mines were carried out. The basic law is the Mining and Minerals Law which was passed in 1986 (PNDC Law 153). This and associated legislation combines regulation of the mining industry with fiscal incentives for investors. Some of the more significant features of the legislation are:

1. All minerals are owned by the State. Exclusive mining rights are granted by the Ministry of Mines and Energy. A summary is in table above:

2. Negotiable matters are deferment of royalty payments, work programs, and the level of export earnings retention allowances. No transfers are permitted without the approval of the Minister of Mines and Energy.

3. The legislation is to be applied equally to Ghanaians and foreigners, except for the provisions relating to artisanal mining and exploitation of construction minerals which is reserved for Ghanaians.

4. The Government is entitled to a free carried equity interest of 10% in mineral ventures. It also has the option of purchasing an additional 20% at a fair market price.

5. Royalties vary form 3% to 12% of the gross value of minerals produced. The variation is related to the "operating margin" and is designed to prevent royalties becoming too onerous during times of low profitability.