THE economic data and public discourse on gold mining in Ghana, especially recent years, invite an interesting question for debate. The question is: at what environmental cost is Ghana paying for the increasing gold production and revenue? This question is important because Ghana has subscribed to the sustainable development agenda where economic growth is to be pursued without compromising the health and integrity of the environment.
Globally, extractive industries provide the world with fossil fuels, metal ores and mineral resources, but their total environmental costs amount to as much as £4tn ($5tn) every year. Most are attributed to greenhouse gases, particulate matter and acidification – particularly from the coal and steel sectors. The mining industry contributes between 4 and 7 per cent of global greenhouse gas emissions and can have significant impacts on global climate change.
The environmental impact of gold mining is well studied and reported. On average, gold mining produces over 12,000kg of CO2 equivalent emissions per kg of gold. Thus, in terms of its CO2 footprint, approximately 12-29kg of CO2 is released to produce 1g of gold. In terms of waste production, 1g of gold produced corresponds to approximately 4-6 tonnes of mining waste.
With particular focus on gold in Ghana, gold production has been increasing from approximately 4 million ounces in 2023, to 4.8 million in 2024, to 6 million in 2025, with a projected production of 6.5 million in 2026. The commodity contributes 7 per cent to Ghana’s GDP, with prospects of increasing contribution in the coming years. Gold export earnings were $20 billion in 2025 and $10.3 billion in 2024 and are projected to reach $36.5 billion in 2034. Gold from small-scale mining shifts from one-third to 40 per cent of total gold tonnage.
Valuation studies on mineral extraction impacts on the environment, particularly estimation of the cost of mining projects on society and the environment, continue to grow. For example, a study on the Songun copper mine dataset revealed that the environmental cost per tonne of extracted materials was $0.02927 and $0.02145 for open-pit and block-caving sections, respectively. More recently, Gasparinnetti et al. (2024) estimated that values associated with social and environmental damage of gold mining range from $187,200 to $389,200 per kilogram of gold. This was mostly attributable to mercury contamination, which represents more than twice the market value of gold. The valuation framework depended on impact valuation of deforestation, land degradation and mercury contamination.
Applying these valuation costs to the production data in Ghana reveals a worrying scenario and begs for an intense public debate on gold mining, particularly the fight against galamsey. The assessment reveals that in 2023 as much as 124 million tonnes of earth material was excavated for gold production alone. This is projected to increase to some 202 million tonnes in 2026. With an average sector recovery of 1g of gold per tonne of ore or earth material and applying minimum values of impact cost, at least the environmental costs can be estimated at $23.2 billion for 2023, $27.9 billion for 2024, $34.9 billion for 2025, and $37.8 billion for 2026. Using upper cost limits, for example, the 2026 value can shoot as high as $78.9 billion, more than thrice the projected gold revenue that year.
This estimation confirms the generally held view that environmental cost is higher and could be twice the market value of gold.
This analysis invites scholarly and political debate about how we must position mineral production and revenue in national accounting. First, it is important to adopt green budgeting so that the environmental cost and benefit of mining projects can be properly situated. It will afford Parliament better insight into budget preparation and oversight. Second, it is important to use a different development metric, for example shifting from GDP to green GDP.
The green gross domestic product (green GDP or GGDP) is an index of economic growth with the environmental consequences of that growth factored into a country’s conventional GDP. Green GDP monetises the loss of biodiversity and accounts for costs caused by climate change. For green GDP, environmental costs can be applied to net the revenue from the extraction sectors and ecosystem services from forests, for example, integrated into the sector contribution. This method estimates sector impacts more effectively than relying solely on direct revenues in GDP calculations.
I conclude that we must hasten slowly with our drive for increasing gold production and take a holistic view of social and environmental impacts. Development is not only about economic growth but also environmental sustainability.
BY EMMANUEL MARFO (PhD)
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