Gold prices have reached record highs, capturing global headlines and raising hopes for Ghana’s mining sector. But according to Michael Akafia, President of the Ghana Chamber of Mines, the reality for miners is more complex. While the surge presents opportunities, success depends on smart capital allocation and long-term planning.
Speaking in an interview with The High Street Journal, Akafia explained that not all mines benefit equally from higher prices. Low-grade mines, where gold is dispersed in small quantities across large volumes of rock, are structurally high-cost. Mature operations face additional challenges, requiring deeper excavation and handling harder rock formations, which drives up capital expenditure.
“High gold prices improve planning flexibility and help sustain operations,” he said, “but they do not automatically translate into windfall profits.”
He also highlighted the dynamics of capital allocation within multinational mining groups. Companies tend to prioritize newer, lower-cost mines, which can sometimes generate more cash in a single year than older mines have over a decade. “For existing, mature mines, you must dig deeper, move harder rock, and order specialized equipment,” Akafia said. “All of these factors eat into potential margins, even when prices are high.”
Rising prices also affect operational costs. Labour, fuel, and supplier expenses tend to rise alongside gold, limiting margin gains. “Even as gold climbs, costs rise in tandem,” he explained. “Mining is capital-intensive, and much of the extra revenue goes into sustaining exploration, equipment, and operations, not short-term profits.”
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For Ghana, these realities matter. While record gold prices make headlines, mature and low-grade mines face tougher economics than newer global assets.
As Akafia emphasized, the current gold rally is an opportunity, but not a free lunch. Strategic investment, careful planning, and long-term thinking are what will determine which mines thrive and which simply survive.
