Ghana hosts the second-largest gold deposits in the African region after South Africa. Consequently, the nation derives a bulk of its external revenues from gold mining –forming as much as 90% of the total mineral exports of Ghana. Apart from gold, Ghana also produces significant quantities of bauxite and diamonds. The country is also counted among the top five nations across the globe for its manganese ore production. Ghana plays host to some of the biggest names from the global extractive industry – Gold Fields (Ghana), Newmont Ghana and South Africa’s AngloGold Ashanti. Gold continues to play a crucial role in the Ghanaian economy. In January 2008, the central bank said that the economy had performed strongly in 2007, largely as a result of a 35% surge in gold exports that more than offset a fall in cocoa output, which fell after a record harvest in 2006. Ghana’s gold exports totalled US$1.73bn in 2007, up from US$1.28bn in the previous year, the bank said in a quarterly report cited by Reuters. Total exports rose by 12.6%, to reach US$4.19bn. Though the mining industry has been successful in attracting foreign capital, it has also been subject to criticism from the Ghanaian government, environmentalists and human rights activists. Foreign players have been known to exploit legal loopholes and abuse both human rights as well as the environment. Frequent disruption in power supplies is another challenge and continues to considerably escalate operating costs in mining operations. Nonetheless, Ghana has gained credit for its efforts to prevent the trade of ‘conflict diamonds’, which have earned praise from the European Union (EU). The basic law governing the mining industry is the Minerals and Mining Act 2006 (Act 703). Under the law, the president holds the power to grant mining rights. However, the pressure to amend the law and allow farmers to have a say in authorising their lands for mining activity is increasingly gaining favour in the country – and is being seen a necessary move to crack down on the rampant exploitation of the environment by mining industries. In April 2008, it was reported on the metalmarkets news service that the country’s mining minister, Esther Obeng Dapaah, intends to review current mining laws in order to increase the amount of mineral wealth that comes back to the government. The minister was quoted as describing current tax revenues deriuved from the sector as ‘minimal’. This move by Ghana follows similar moves from other African nations in recent months, as they seek to gain the benefit of the recent period of high metals prices. As with other countries, it is to be hoped that the Ghanaian authorities can tread a fine line between ensuring that their country receives a fair share of the benefits of higher mineral wealth, without causing conflict with in-country miners and existing contracts. Ms Dappah was also quoted as being keen to see the government take a more pro-active role within the mining sector and that she would like to see the nation diversify away from its current reliance on gold mining. BMI will continue to monitor the situation on the ground in Ghana and will report any legislative changes as and when they are announced. Industry Forecast The Ghanaian mining industry has a promising future based largely on its untapped mining potential and stable government along with a reasonable tax regime. Ineffective laws, however, pose an impediment to its growth. Accordingly, BMI forecasts the mining industry to register an average growth rate of over 6.5% per annum over the 2008-2012 period.