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The Royal Ghana Gold Refinery will play an important role in reducing gold smuggling in the country.

Ghana, Africa’s biggest gold producer, opened a new refinery in a bid to reap more value from its natural resources.

The Royal Ghana Gold Refinery aims to refine 400kg of gold a day, sourcing the raw material mainly from artisanal and small-scale mines, which officially account for a third of Ghana’s output of about 4 million ounces a year.

There’s also a large but unknown amount of gold that’s illegally produced by miners locally known as “galamsey,” who smuggle their output out of Ghana.

“This refinery will play an important role in reducing gold smuggling which has been a major challenge for the country over the years by providing a ready market for artisanal and small-scale miners,” said Bank of Ghana Governor Ernest Addison.

“This gold refinery can mitigate the incentive for smuggling and help promote transparency and accountability in gold trading,” added Addison.

Rosy Royal Minerals Ltd of India owns 80 percent of the refinery and the central bank the remainder, according to government officials.

The refinery is the latest step taken to formalise Ghana’s artisanal and small-scale gold mining. The central bank has bought $5 billion worth of gold from small miners as part of a program started in 2021 to boost Ghana’s foreign-exchange reserves, Addison said.

Many other African nations such as Uganda and Madagascar are following the move or considering doing so to prop up their currencies.

The plan also fits within a wider push across the continent to add value to natural resources before exporting them to reap greater economic rewards. — Bloomberg.