May 22, 2014 / 10:39 AM / 5 years ago

UPDATE 2-Ghana to suspend issuing new gold-prospecting permits

* Ghana is Africa’s number two gold producer

* Ghana prospectors can hold licences for 3 years (Adds comment from mining commission)

By Kwasi Kpodo

ACCRA, May 22 (Reuters) - Ghana is to suspend issuing new gold-prospecting permits while it carries out an audit of existing licences to free up unused concessions for prospective investors, the chief executive of the minerals commission said on Thursday.

An initial 90-day moratorium on new prospecting permits will be imposed and this could be extended if necessary, commission head Tony Aubynn told Reuters.

The West African state produced 4.29 million ounces (122 tonnes) of gold in 2013, down 0.7 percent from the previous year, he said.

Ghana is Africa’s second biggest gold producer after South Africa. Along with other miners in west Africa Ghana was hit hard in 2013 by a slump in global gold prices.

“There is need to clean up the system because we have realised that many companies are holding on to vast concessions granted them several years ago without undertaking any prospecting work on them,” Aubynn said.

Ghana’s laws allow people prospecting for gold to hold their licences for up to three years, after which they are expected to apply for a mining lease.

“So we are saying that when you get your licence and we see you don’t do any prospecting on the land, we would have to apply the law and take it from you,” he said, adding that several companies had been holding land for more than a decade.

The biggest gold miners operating in Ghana include AngloGold Ashanti, Newmont and Gold Fields.

Ghana should recover from the global gold downturn by 2016 when production from two new mines boosts output, Aubynn said.

Australia-based Azumah Resources and Canada’s AsankoGold have begun operations in Ghana and are expected to pour first gold by early 2016.

U.S.-listed Newmont Mining Corporation poured the first gold from its second Ghana mine last October.

“We believe that production from these three mines will not only help us to recover fully but they will also provide the needed revenues to support the country’s medium-term growth potentials,” Aubynn added. (Reporting by Kwasi Kpodo; Editing by Matthew Mpoke Bigg and Keiron Henderson)

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