Mining sector analysts and commodity economists are increasingly worried that the Ghana Gold Board’s (GoldBod) impending traceability system could fundamentally alter the economics of the country’s artisanal and small-scale mining (ASM) sector, potentially exposing a significant proportion of its gold purchases as ineligible.
The concern stems from rising suspicions that a substantial portion of the gold currently purchased and traded by GoldBod may be traced back to illegal mining operations, commonly known as galamsey. GoldBod’s traceability programme is intended to ensure that Ghana’s rapidly expanding official gold-export pipeline does not become a channel through which illegally mined gold is legitimised. The Board’s responsible-sourcing policy commits the institution to international standards, including the OECD Due Diligence Guidance and the London Bullion Market Association’s responsible-gold principles.
The Scale of the Boom
This issue has become particularly critical because ASM has become central to Ghana’s external finances. GoldBod purchased, aggregated and exported about 104 tonnes of ASM gold in 2025, generating nearly US16.1 billion. Notably, 98 per cent of these purchases originated from the ASM sector, with small-scale mining output for the first time exceeding production from Ghana’s large-scale mining industry.
The Traceability Challenge
However, GoldBod’s critics and industry analysts point out that the formalisation of ASM has not kept pace with its economic importance. Research has historically estimated that 70–80 per cent of Ghana’s small-scale mining operations were unlicensed, with academic literature putting the informal share even higher. While this does not mean that 70–80 percent of GoldBod’s purchases are currently illegal, it does create the possibility that a significant proportion is.
Currently, GoldBod sources through licensed aggregators rather than directly from miners, creating a screening layer between the mine and the Board. However, it has not yet put a process in place that confirms the claims of aggregators that they indeed purchased the gold from legitimate, licensed small-scale mines. A fully developed traceability system should go considerably further: identifying the originating mine, confirming its licence, recording production and transaction information, and creating a digital chain of custody through aggregation, assaying, refining and export.
GoldBod has initiated the implementation of a technology-driven system capable of tracing gold through the entire supply chain, and an April 2026 report indicated that the system was being advanced to cover gold from extraction to export. The Board is developing a blockchain-powered track-and-trace system scheduled for deployment by the end of 2026. It announced in January that it would begin by engaging about 600 ASM mines in a pilot traceability programme, and has subsequently moved towards procurement of technical services for the design, development, implementation and support of a Traceability and Assurance System.
The Hidden Cost: What Happens When Traceability Begins?
The most difficult question is what happens when traceability actually begins excluding gold that cannot be linked to licensed production. An informed estimate by industry experts is that 20–30 per cent of GoldBod’s present ASM purchases could ultimately be exposed to exclusion or require additional verification, with a 40 per cent reduction representing a severe but plausible worst-case stress scenario during the early stages. This is deliberately below the 70–80 per cent estimate for unlicensed mining because GoldBod already sources through licensed aggregators.
The Broader Environmental and Health Costs
Beyond the immediate economic concerns, the artisanal gold boom carries severe environmental and health costs. Research indicates that artisanal mining has degraded about 40 per cent of Ghana’s groundwater resources. The sector is associated with issues such as child labour, gender discrimination, land degradation, wildlife extinction, air pollution, and contamination of water bodies. Water treatment costs have increased by nearly sixfold in affected areas. Scientists have raised the alarm that more than 60 per cent of the country’s water bodies are now polluted by illegal mining activities.
Mercury contamination is particularly severe. Studies show mercury concentrations in 75 per cent of water sources in ASM areas exceed the maximum contaminant limit by approximately 361 times. Mercury exceeded reference thresholds in all soil and sediment samples tested in the Talensi mining district. Miners and gold traders exposed to mercury suffer neurological damage, respiratory diseases, and kidney failure. Radiologists have warned that the indiscriminate use of mercury and cyanide in illegal mining is contaminating water bodies and exposing millions of people to long-term organ damage. Non-carcinogenic risk affected 38 per cent of children and 10 per cent of adults exposed to sediments in mining areas.
The Formalisation Challenge
The formalisation of the ASM sector has been hampered by decades of inadequate state support. GoldBod CEO Sammy Gyamfi has attributed Ghana’s persistent galamsey crisis partly to inadequate investment in training, capacity building, equipment, monitoring and environmental reclamation. Successive governments failed to establish effective systems to register and monitor mining equipment, geofence mining operations and track activities across mining areas. Stakeholders have also highlighted long-standing challenges including licensing complexity, weak district capacity, environmental governance gaps, and fragmented institutional coordination.
The Way Forward
As the pilot phase of GoldBod’s traceability system is expected in late 2026 or early 2027, the country faces a critical juncture. The system could either legitimise Ghana’s gold exports and unlock access to premium international markets, or expose a significant gap between formal purchases and licensed production—with potentially severe macroeconomic consequences.
GoldBod has reaffirmed its commitment to responsible gold sourcing, stating that it sources through licensed aggregators and subjects the trade to strict anti-money laundering and counter-terrorism financing controls. The Board has also partnered with the World Gold Council to explore strategic partnerships on ASM formalisation and traceability. However, the success of these efforts will ultimately depend on whether the formalisation of small-scale mining can catch up with its rapidly growing economic significance.
