Côte d’Ivoire aims to produce 55 tons of gold in 2024. However, two companies expected to contribute significantly to this goal, with a combined maximum production of over 16 tons from four gold mines, experienced power outages in the second quarter.
Allied Gold’s Production Loss
Intermittent power cuts in Côte d’Ivoire prevented Allied Gold from producing an additional 8,625 ounces of gold in the second quarter, the Canadian company stated in a report released on August 8th.
At the gold price on Friday, August 9th, approximately USD 2,432 per ounce, this represents a value of USD 20.9 million or 12.57 billion FCFA.
Endeavour Mining’s Increased Costs
Allied Gold, which operates the Agbaou and Bonikro mines, is not the only mining company to have suffered the consequences of the electricity supply deficit in recent months in Côte d’Ivoire.
According to Endeavour Mining, the leading gold producer in West Africa and owner of the country’s largest mine, the power cuts have led to increased costs at the Ity mine.
In its second-quarter results, the company indicates that it had to produce electricity on-site, which cost an average of $0.28 per kWh, compared to $0.18/kWh for electricity supplied by the national grid.
As Côte d’Ivoire supplies Burkina Faso with electricity, Endeavour faced the same challenge at its Houndé and Mana mines in Burkina Faso.
At the end of the second quarter, changes in energy availability led to a $52 per ounce increase in the overall cost of gold production.
Companies’ Mitigation Strategies
To mitigate the unavailability on the national grid, Allied Gold also directly produced electricity by installing generators at its operations in Côte d’Ivoire.
The company is also in discussions with a turnkey solar energy solution provider to help power its mines in the long term and reduce dependence on the national grid.
In Mali, for example, companies were not affected by the power cuts in the first quarter of 2024 because they have autonomous solutions for their electricity supply.
This includes a mix of solar power plant energy and the use of generators.
Causes of Power Shortages and Outlook
The electricity supply difficulties in recent months in Côte d’Ivoire are mainly due to technical problems encountered by the Azito thermal power plant and the Compagnie Ivoirienne de Production d’Electricité (CIPREL).
These two producers account for 75% of the national electricity production. According to Endeavour, the situation is nevertheless improving with the return of the rainy season, which favors hydropower production, and the resolution of problems at CIPREL.
Production Targets
As a reminder, Côte d’Ivoire produced 51 tons of gold in 2023 and is aiming for at least 55 tons in 2024.
With the Ity mine and its new Lafigué gold mine, Endeavour is on track to produce between 10.2 and 11.6 tons in 2024, up to 21% of the expected national production.
As for Allied Gold, its two mines, Bonikro and Agbaou, together delivered 73,198 ounces in the first half of 2024. Allied’s goal is to produce between 180,000 and 200,000 ounces in Côte d’Ivoire this year, a maximum of 5.6 tons of gold.