By: Reuters

Ghana has struck a deal with its large-scale mining companies to purchase 30% of their gold output beginning July 1, the government said on Thursday, as it seeks to boost foreign currency reserves and develop local refining capacity.

Central banks are increasingly stockpiling bullion as high prices bolster its appeal as a reserve asset.

Ghana, Africa’s biggest gold producer, launched its purchase programme in 2022.

It agreed with miners, via the Ghana Chamber of Mines, that they would supply 20% of annual output to the central bank.

Holdings rose to 19.2 metric tons in February, Bank of Ghana data show.

The government revamped the programme in February, targeting up to 157 tons (15 months of import cover) by 2028 and launched negotiations with miners, including Newmont NEM.N, Gold Fields GFIJ.J and China's Zijin 601899.SS, to increase purchases.

Under the agreement, large miners will sell 30% of their gold output to the state entity Gold Board, known as GoldBod, in dore form.

Purchases will be discounted at 0.55% of the central bank's reference rate and settled in Ghanaian cedis.

The arrangement is also designed to help Ghana secure London Bullion Market Association accreditation for at least one domestic refinery by 2030, the statement said.

Gold from the scheme will be refined locally before being shipped to a LBMA refinery for melting and stamping before being added to central bank reserves.

GoldBod already purchases the entire output of Ghana's artisanal gold miners.

Increased gold reserves protect the country against external shocks and can be sold abroad to generate dollar income.

(Reporting by Emmanuel Bruce; editing by Barbara Lewis)