Gold News

Gold mining 'threatened by cost increase'

Gold mining companies in Ghana have entered into negotiations with the government to oppose a cut in electricity subsidies.

The move, which came into effect yesterday (July 1st), will result in a rise in power rates of 100 per cent, up from 11 cents per kilowatt hour, to 22 cents.

This could result in a rise in gold prices, since it is likely to significantly reduce output as companies struggle to pay while continuing operations.

Chamber of Mines chief executive Joyce Aryee told Reuters that she does not know what the outcome of the meetings will be.

"We are still negotiating. The issues are serious and delicate, so we need time to negotiate," she said.

Mine owners have warned their operations may "suffocate" as a result of the price hike.

The Chamber of Mines of South Africa is a prominent industry employers' organisation which exists to serve its members and promote their interests in the South African mining industry.

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