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CNBC
15-07-2025
- Business
- CNBC
Central banks are increasingly buying gold from local mines as prices surge
Central banks are increasingly looking to bolster their gold reserves. And they are turning to mines in their backyard to source the yellow metal. Besides being cheaper, securing gold directly from mines helps support local industry and bolsters reserves without weighing on foreign exchange reserves, experts said. While countries such as the Philippines and Ecuador have been doing this for years, more central banks with access to domestic gold mines have started, increased, or are considering direct local purchases, according to the World Gold Council. Nineteen out of 36 respondents in the World Gold Council's latest central bank survey said they are buying gold directly from domestic artisanal and small-scale gold miners in local currency. Four are thinking of following suit. This is a slightly higher figure than last year's survey, when around 14 central banks out of 57 said they were buying directly from domestic sources. "One trend that we're seeing is that some central banks, especially in Africa, Latin America, are starting to buy gold directly from domestic, small-scale gold mines, which have really proliferated because of the higher price," said Shaokai Fan, global head of central Banks at WGC. Central banks of Colombia, Tanzania, Ghana, Zambia, Mongolia and the Philippines are relying on domestically mined gold to build up reserves, according to the industry body. Ghana Gold Board — the state agency managing gold purchases on behalf of the Bank of Ghana — in April secured agreements with several mining companies to buy 20% of their gold output, Reuters reported. Last September, Tanzania's mining authority reportedly mandated that all gold exporters, including miners and traders, put aside at least 20% of their output to sell to the central bank. "You can make an argument that it's cheaper than buying gold on the international market, because a lot of these central banks buy gold at a slight discount to the international price," Fan said. Traditionally, central banks acquire gold through the global over-the-counter market — typically centered in London — where gold is transacted via major bullion banks, priced in U.S. dollars, euros, or sterling. These purchases often involve high-purity London Good Delivery or LGD bars, which meet global trading standards and are stored in top-tier vaults such as those at the Bank of England. Because of gold's soaring prices and its attractiveness as a hedge against geopolitical risks, it is natural that the central banks of producer nations would turn to domestic output, said Adrian Ash, director of research at gold investment firm BullionVault. Gold prices have been on a tear, scaling fresh highs amid geopolitical uncertainties and waning confidence in other traditional safe havens. Spot gold prices are currently trading at $3,328.3 per ounce, up almost 27% year to date, data from LSEG showed. Buying domestic mine output saves on banking and intermediary fees, as well as shipping costs. However, countries need to pay for processing and refining the metal to LGD standard — the de facto international benchmark for large gold bullion. These processes need to be done overseas if the country doesn't have domestic LGD refining, which will add costs, Ash said. Central banks that buy gold bars from local mines and have domestic LGD refining capacity, nullify those additional costs. The Philippines' central bank, for instance, is a certified LGD refiner. Kazakhstan has two refiners accredited by the London Bullion Market Association. Russia had seven until they were suspended in 2022 after the country invaded Ukraine. Others such as Ghana and Zambia might need to rely on external refiners, offsetting part of the upfront savings. Another compelling driver for buying domestic gold is monetary flexibility. Purchasing gold through the international market often requires dollars — a reserve asset. That means central banks must swap one reserve for another. But that won't be the case if they use local currencies to buy gold from their own backyard. "You're able to grow your reserves using local currency and therefore not sacrifice another reserve asset to grow your gold reserves," said WGC's Fan. With rising global debt levels, trade and geopolitical risks on the cards, central banks want to strengthen their reserve buffers to shield against sudden financial shocks. Holding more reserves — in multiple forms — provides ammunition to manage potential crises. Out of the 73 central banks surveyed by the WGC, around 95% said they expect peers across the world to raise gold reserves over the next year. In the past, if these central banks wanted to buy gold, they would probably just purchase it on the international market, Fan explained. "But if you have local gold production in your country, a lot of central banks are thinking, well, maybe we can use this local gold production instead and add the reserves this way," he added. Providing support for domestic mining sectors and respective local communities are also key drivers for central banks purchases via local mines. Demand for gold in some countries is too small, and central banks are incentivized to support mining operations in the country, which in turn generates jobs, said Nicky Shiels, head of research and metals strategy at MKS PAMP. Shiels, however, noted that purchasing gold via local mines comes with risks. Central bank purchases through international markets often via leading bullion banks offer greater trust and minimize reputational risks for central banks, she said. Much of the gold being bought domestically comes from artisanal and small-scale gold mining — ASGM has been linked with poor labor practices, environmental damage, and illegal smuggling. But it can also be argued that central banks, with their institutional credibility and financial weight, are in a good position to formalize and clean up that supply chain, said WGC's Fan. "Central banks can harness their massive buying power to do good for these artisanal, small scale miners," he said. "Having a credible, large-scale buyer like the central bank gives small-scale miners a legal and fair outlet to sell their gold," said Fan. "That not only diverts flows away from criminal networks but also improves traceability and accountability." "That's exactly how we describe it as — a win-win."
Business Insider
09-07-2025
- Business
- Business Insider
President of Ghana offers 10% bounty to whistleblowers in galamsey crackdown
President John Dramani Mahama has pledged a 10% reward to whistleblowers who provide credible information that leads to the recovery of illegally traded or smuggled gold. President Mahama announced a 10% reward for whistleblowers aiding in recovering smuggled or illegally traded gold. The Ghana Gold Board Task Force was inaugurated to combat illegal gold trading and smuggling. Violations of the Gold Board Act will attract severe penalties, including significant fines and imprisonment. The announcement was made during the official inauguration of the Ghana Gold Board Task Force in Accra on Monday, 8 July 2025. The newly established task force has been mandated to clamp down on illegal gold trading, smuggling, and pricing distortions in Ghana's gold market. Cash rewards for information leading to seizures In a bold move to encourage citizen participation in the fight against illicit gold trade, President Mahama revealed that individuals who report illegal activities would be rewarded with 10% of the value of any gold or cash recovered as a result of their tip-off. DON'T MISS THIS: Top 10 African country with the highest foreign exchange and gold reserves in 2025 "Anyone who blows the whistle is eligible to receive 10% of the seized gold or cash value. So, whistleblowers, get ready. If you report someone and gold or cash is retrieved, you will receive 10% of its value," the President declared. Task force warned against abuse of power President Mahama also took the opportunity to caution members of the task force against abusing their powers. He warned that any form of misconduct or corruption would be met with swift and decisive disciplinary action. "To the task force, let me be clear, abuse of authority will not be tolerated. Any officer found engaging in misconduct will face immediate sanctions, including possible dismissal, prosecution, and forfeiture of entitlements," he stated. No tolerance for unlicensed gold trade Reaffirming his administration's stance on illegal mining and trading, the President urged anyone interested in dealing in gold to obtain proper licensing through the Ghana Gold Board (GoldBod). He also issued a stern warning to foreign nationals attempting to trade gold locally without authorisation. "Let this serve as a warning to all those involved in gold smuggling and illegal trade — the law will be enforced without fear or favour. The Gold Board Act prohibits unlicensed trading and bans foreigners from purchasing gold on the local market," Mahama emphasised. Heavy penalties for violations According to the President, breaching the Gold Board Act carries severe consequences. "Any breach of this Act could result in a fine of up to 2.4 million Ghana cedis, imprisonment for five to ten years, or both. You could face a prison sentence and still be required to pay the fine. This is a clear warning to those involved in the illicit gold trade," he concluded.
Arab Times
09-07-2025
- Politics
- Arab Times
Ghana's president inaugurates special task force to tackle illegal gold mining
ACCRA, Ghana, July 9, (AP): Ghana's president launched a special task force on Tuesday to combat rampant illegal gold mining and smuggling that has long plagued the West African nation. The chronic challenge of illegal gold mining - known locally as "galamsey' - was a major issue during Ghana's presidential election campaign last year and a source of concern for voters, triggering protests and criticism against the outgoing government. Ghana's President John Mahama inaugurated the GOLDBOD Task Force, saying its creation "signals our readiness to act decisively.' The task force - comprised of officers from various security agencies and the military - is empowered to arrest and detain suspects. It follows the establishment of the Ghana Gold Board agency in January as the sole legal entity managing all transactions and exports of gold mined in the country by small mining companies. Mahama said that along with the agency, the task force will strive to curb the proliferation of illegal miners and "dismantle the black-market economy surrounding gold.' He touted what he described as the rebound of the cedi, Ghana's currency, which has had a poor track record against the dollar, as a result of setting up the Ghana Gold Board. The illegal gold mining industry has resulted in significant economic losses and environmental degradation for Ghana, Africa's largest gold-producing country. It has flourished as a result of a massive slump in Ghana's economic fortunes as millions of young people struggle to find jobs. Huge protests broke out across the country against illegal gold mining after many rivers were polluted, becoming a political hot-button issue in the election. Mahama, who won the election, promised in his campaign to clamp down on the practice. "Let this serve as a warning to all those involved in gold smuggling and illegal trade: the law will be enforced without fear or favor,' he said Tuesday. Mahama emphasized how the task force members would wear body cameras, which allows for accountability and monitoring of their actions in real time. However, many analysts say past attempts to curb illegal gold mining have not produced tangible results. "The task force can help," Festus Aboagye, an Accra-based security analyst, told The Associated Press. But "the challenge, as usual, is not regulation but enforcement.'
CTV News
08-07-2025
- Business
- CTV News
Ghana's president inaugurates a special task force to tackle illegal gold mining
Damien Larbli Tchintchibidja, Vice president of the ECOWAS Commission, left, Ghana's President John Mahama, center and Nigeria Minister of Foreign Affairs, Yusuf Tuggar pose for a photo, prior to the start of the ECOWAS meeting in Abuja, Nigeria, Sunday, June 22, 2025. (AP Photo/Olamikan Gbemiga) ACCRA, Ghana — Ghana's president launched a special task force on Tuesday to combat rampant illegal gold mining and smuggling that has long plagued the West African nation. The chronic challenge of illegal gold mining — known locally as 'galamsey' — was a major issue during Ghana's presidential election campaign last year and a source of concern for voters, triggering protests and criticism against the outgoing government. Ghana's President John Mahama inaugurated the GOLDBOD Task Force, saying its creation 'signals our readiness to act decisively.' The task force — comprised of officers from various security agencies and the military — is empowered to arrest and detain suspects. It follows the establishment of the Ghana Gold Board agency in January as the sole legal entity managing all transactions and exports of gold mined in the country by small mining companies. Mahama said that along with the agency, the task force will strive to curb the proliferation of illegal miners and 'dismantle the black-market economy surrounding gold.' He touted what he described as the rebound of the cedi, Ghana's currency, which has had a poor track record against the dollar, as a result of setting up the Ghana Gold Board. The illegal gold mining industry has resulted in significant economic losses and environmental degradation for Ghana, Africa's largest gold-producing country. It has flourished as a result of a massive slump in Ghana's economic fortunes as millions of young people struggle to find jobs. Huge protests broke out across the country against illegal gold mining after many rivers were polluted, becoming a political hot-button issue in the election. Mahama, who won the election, promised in his campaign to clamp down on the practice. 'Let this serve as a warning to all those involved in gold smuggling and illegal trade: the law will be enforced without fear or favor,' he said Tuesday. Mahama emphasized how the task force members would wear body cameras, which allows for accountability and monitoring of their actions in real time. However, many analysts say past attempts to curb illegal gold mining have not produced tangible results. 'The task force can help,' Festus Aboagye, an Accra-based security analyst, told The Associated Press. But 'the challenge, as usual, is not regulation but enforcement.' ___ Adetayo reported from Lagos, Nigeria. Francis Kokutse And Ope Adetayo, The Associated Press
The Independent
08-07-2025
- Politics
- The Independent
Ghana's president inaugurates a special task force to tackle illegal gold mining
Ghana's president launched a special task force on Tuesday to combat rampant illegal gold mining and smuggling that has long plagued the West African nation. The chronic challenge of illegal gold mining — known locally as 'galamsey' — was a major issue during Ghana's presidential election campaign last year and a source of concern for voters, triggering protests and criticism against the outgoing government. Ghana's President John Mahama inaugurated the GOLDBOD Task Force, saying its creation 'signals our readiness to act decisively.' The task force — comprised of officers from various security agencies and the military — is empowered to arrest and detain suspects. It follows the establishment of the Ghana Gold Board agency in January as the sole legal entity managing all transactions and exports of gold mined in the country by small mining companies. Mahama said that along with the agency, the task force will strive to curb the proliferation of illegal miners and 'dismantle the black-market economy surrounding gold.' He touted what he described as the rebound of the cedi, Ghana's currency, which has had a poor track record against the dollar, as a result of setting up the Ghana Gold Board. The illegal gold mining industry has resulted in significant economic losses and environmental degradation for Ghana, Africa's largest gold-producing country. It has flourished as a result of a massive slump in Ghana's economic fortunes as millions of young people struggle to find jobs. Huge protests broke out across the country against illegal gold mining after many rivers were polluted, becoming a political hot-button issue in the election. Mahama, who won the election, promised in his campaign to clamp down on the practice. 'Let this serve as a warning to all those involved in gold smuggling and illegal trade: the law will be enforced without fear or favor,' he said Tuesday. Mahama emphasized how the task force members would wear body cameras, which allows for accountability and monitoring of their actions in real time. However, many analysts say past attempts to curb illegal gold mining have not produced tangible results. 'The task force can help," Festus Aboagye, an Accra-based security analyst, told The Associated Press. But "the challenge, as usual, is not regulation but enforcement.' ___ Adetayo reported from Lagos, Nigeria.
