Mike Allen Hammah, outgoing Minister for Lands and Natural Resources has observed that even though the country produces over 3.8 million ounces of gold per annum, the country has not been able to add value to the product.
“In spite of this level of production, there are only small scale refineries which refine gold produced by small scale miners in the country. Bullion from large scale production continues to be exported for final refining outside the country,” the Minister remarked.
Mr Mike Hammah was speaking at the 19th Investing in African Mining Indaba Conference in Cape Town in South Africa last week.
The conference, which is held annually, is the biggest mining event in Africa and the world, and over 7,000 delegates representing international organisations from 100 countries, as well as government delegations, attended the event.
Mr Hammah noted that the establishment of a major gold refining facility in Ghana will also serve other gold producing countries within the sub-region. He therefore called on investors with the technical know-how and financial capacity to consider the project.
Touching on the salt industry, the Minister said Ghana possesses one of the largest proven renewable solar salt production potential along the entire West African coastline stretching over a distance of over 500km.
He said effective exploitation of the industry would enable the country to supply the salt needs of the entire sub-region.
He announced that government has completed a study to identify and demarcate areas that will be suitable for salt winning, which would soon be made available to investors.
“Indeed Ghana has the requisite mining environment that serious investors need. This includes: availability of abundant mineral resources with basic geoscientific data, political stability, attractive investment framework, improved institutional framework to reduce corruption, eliminate discretion & enforce the rule of law and transparency in the management of our mineral resources.”
Below is the full statement
SPEECH BY GHANA’S MINISTER FOR LANDS AND NATURAL RESOURCES AT THE 19TH MINING INDABA, CAPE TOWN, SOUTH AFRICA, FEBRUARY 5, 2013
MR. CHAIRMAN, COLLEAGUE MINISTERS, MEMBERS OF THE MINING BUSINESS FRATERNITY, FELLOW PARTICIPANTS, DISTINGUISHED GUESTS, LADIES AND GENTLEMEN.
Mr. Chairman, allow me also to thank the organizers of the conference for inviting Ghana once again to speak at this important forum. This has given me the opportunity to justify why Ghana has been and continues to be the preferred mining investment destination in Africa.
Ghana continues to participate in the Mining Indaba because of its significance in providing a huge platform for global mining professionals as well as a medium where many mining deals have been struck resulting in significant Foreign Direct Investment into the mining value chain in Africa. I expect this trend to continue due to the considerable increases in precious metal prices but with a paradigm shift from the exportation of raw minerals to the promotion of value addition along the entire value chain.
Indeed Ghana has the requisite mining environment that serious investors need. This includes: availability of abundant mineral resources with basic geoscientific data, political stability, attractive investment framework, improved institutional framework to reduce corruption, eliminate discretion & enforce the rule of law and transparency in the management of our mineral resources.
Ladies and Gentlemen, the favourable investment climate has succeeded in attracting significant mining sector investment of about 12 billion US dollars since the onset of the Economic Recovery Programme in 1983. It is gratifying to note that two new mining companies from Australia started full scale operation in 2012. Leading multinational mining companies in the world, such as AngloGold Ashanti, Newmont, Goldfields, Golden Star Resources and others continued to operate in the country. The key results of these investments have been: • Significant increases in production of virtually all the major minerals viz; gold, manganese, bauxite and diamonds. The production of gold, the flagship mineral in Ghana, increased by 70% from 2.24 million ounces in 2002 to over 3.8 million ounces in 2012 (Provisional based on 11 months). Similar increases occurred in the production of the other major minerals.
• The proportion of the country’s total merchandise exports, accounted for by minerals has risen from under 20% in the mid 1980s to 42% in 2012, gold generally being the single largest contributor to the economy since 1991.
The sector, however, has potential to significantly improve its contribution if it is more fully integrated with the rest of the economy.
Other major minerals currently being mined on commercial scale are diamond, bauxite, manganese and salt. But the goal of Government is to broaden and optimize the production and development of Ghana’s mineral resources, thereby maximizing the benefit for all the stakeholders and along with it, reducing poverty.
With the assistance of the European Commission, various geo-scientific studies were carried out from 2002 to 2010. These studies include detailed geological mapping, VTEM and GEOTEM surveys over a vast area which forms more than one-third the land mass of Ghana. These studies were to unearth the mineral potential in the Voltain and Keta Basins which also have potential for hydrocarbons.
2.0 GHANA’S ECONOMY Mr. Chairman, Ghana’s stable multi-party democracy and prudent management of the economy has contributed to the successes chalked so far. Some of the recent macroeconomic indicators are:
• Estimates for 2012 showed general economic growth of 7.1 percent over 2011. The Services sector, which is also the largest sector, recorded the highest growth of 8.8 percent, followed by Industry (7.0%),
• Inflation which was 18.1% in 2008 now stands at 8.8% in December, 2012. This single digit inflation is real and has been sustained for 31 consecutive months, the longest period in our economic history. This was due to the prudent fiscal policy of the government and continued monetary control which helped anchored inflationary expectations;
• Indeed, the declining inflation has created a conducive environment for businesses to plan on long term basis, thereby enhancing business investment, which has helped put the economy on a higher growth path;
• The Industry Sector recorded significant output growth in 2012. The output of the Extractive Industries sub-sector, that is, Mining Quarrying and Petroleum output grew by 5% over that of 2011. The Electricity and Construction sub-sectors recorded appreciable growth rates of 12% and 11.8%, respectively, whilst the Manufacturing sub-sector grew by 4.3%.
3.0 RECENT POLICY INTIATIVES
The results of work done under the Mining Sector Support Programme and the current Natural Resources and Environmental Governance Programme have shown indications of occurrences of other minerals apart from the traditional ones currently being exploited. Especially in the Buem Formation, results received so far indicate appreciably high values of Manganese, Cobalt, Copper, Nickel, Uranium and Chromite. This is suggestive of base metal occurrences and other minerals in the area.
Mr. Chairman, Colleagues, Ghana is no exception to the new wind of mineral commodity dependent countries introducing new provisions into their fiscal regime in order to share in the favourable metal prices. The review of these fiscal policies were carried out through broad stakeholder consultations.
To provide the support framework, the adoption of good Governance practices by both Government and investors is being facilitated by Government through both legal and institutional means. Government would ensure that principles of transparency and accountability are applied in the administration of mining laws and regulations. Thus, while Ghana has adopted the Extractive Industries Transparency Initiative (EITI) and is one of the few countries to become fully EITI compliant, the Ghana Model of EITI has developed principles that go far beyond the general EITI requirements all in the attempt of improving transparency in the minerals sector;
• Government also encourages mining companies to develop a participatory and collaborative approach with stakeholders in the sector to mine planning, development and decommissioning, taking into account the needs of local communities in line with their role as responsible corporate citizens;
• In compliance with regional and international protocols, Ghana endorses and implements principles that are established in regional and international conventions as well as other instruments and undertakings that are relevant to mining such as banning trade in illicit minerals. Ghana is thus implementing the ECOWAS’s guiding principles on the harmonization of Mining Policies in the Mining Sectors. Also, action plans for implementing the Africa Union Commission’s Africa Mining Vision have been developed.
4.0 SOME HIGHLIGHTS OF THE MINERALS AND MINING ACT (2006), ACT 703 AND THE NEWLY PASSED REGULATIONS
Firstly, I will like to remind investors and other stakeholders that the highlights of the Minerals and Mining Act promulgated in 2006 was aimed at making the mining sector in Ghana attractive while at the same time ensure that Government takes a fair share in revenues that accrue from mining.
Mr. Chairman, under the Act, a framework for grant of mineral rights was improved upon to ensure that a more transparent system is in place to assist prospective investors make informed decisions. Regulations have been passed and Guidelines for mineral licensing have been developed to give effect to the relevant provisions in the Act dealing with mineral rights.
Ladies and Gentlemen, to strengthen the regulatory framework governing the management of the minerals and mining industry, six (6) mining regulations have recently been passed by Parliament in June 2012 to operationalise the Minerals and Mining Act, 2006 (Act 703).
A key feature of these regulation is to ensure that holders of mineral rights shall in the conduct of mineral operations, and in the purchase, construction and installation of facilities, give preference to materials and products made in Ghana as well as service agencies located in the country and owned by citizens. The regulations also give preference in employment to citizens to the maximum extent possible and consistent with safety, efficiency and economy.
5.0 SOME MEASURES BEING PURSUED BY GOVERNMENT
5.1 Provision of Geological Data. Mr. Chairman, Colleague Ministers, Members of the Mining Business Fraternity, mining, especially of gold, has taken place in Ghana for well over a century. The logical consequence of this is considerable reduction in known mineral resources. This implies that mineral production may decline in the near future if necessary action is not taken to find more resources.
To forestall this, Government has implemented an European Commission funded Mining Sector Support Programme aimed at unearthing more resources of the existing minerals as well as discovering new minerals for exploration and exploitation. Under this programme, new airborne geophysical surveys of nearly one-half of the country including Time Domain Electromagnetic Surveys (GEOTEM and VTEM) were conducted over promising areas.
Mr. Chairman, results of the airborne and mapping activities have helped us in updating the geological map of Ghana. Additional to the geological map, prospectivity maps of uranium, phosphorous, gold and diamond have also been generated in the Volta River and Keta basins for the first time. Investment opportunities in these areas should be of much interest to investors.
5.2 IMPROVING COST OF DOING BUSINESS - EFFICIENCY
Government is conscious of the need to control the cost of doing business in Ghana. Some of the initiatives are:
(a) Consistently improving upon the time needed to process mineral rights application. To achieve this, specific time limits during which processing of applications must be completed have been provided in Minerals and Mining Act 703. Minerals and Mining (Licensing) Regulations 2012 (LI2176) have provided detailed time limits on the various activities to be carried out at various stages of the mineral licensing process.
(b) An enhanced portal for Ghana’s mining industry (www.ghanamining.org) has been commissioned and all mining sector institutions have been linked by a wide area network (WAN) to promote dissemination of information on a timely basis. Government is aiming at in the not distant future to make it possible for prospective investors to apply for mineral rights on-line.
(c) In the area of Infrastructural Development, Government has also put in a lot of resources and commitment to improve and expand the road and port infrastructure. A number of interventions including the completion of the 600 Mega Watts Bui Hydroelectric Project, a third hydro-electric power generation project, which will start producing power in June this year, and various additional power generation projects underway, are not only to improve power availability but also stabilize the cost of power usage in the country are being pursued.
6.0 OTHER INVESTMENT OPPORTUNITIES Mr. Chairman, besides investing in exploration and exploitation of minerals, other opportunities exist in the industries associated with mining. These include:
6.1 Gold Refinery and Value Added Products Ghana is already producing over 3.8 million ounces of gold per annum. In spite of this level of production, there are only small scale refineries which refine gold produced by small scale miners in the country. Bullion from large scale production continues to be exported for final refining outside the country. Establishment of such a major gold refining facility in Ghana will also serve other gold producing countries within the sub-region. This is a project that investors with the technical know-how and financial capacity would wish to consider.
Opportunities also exist for the establishment of a facility to cut and polish diamonds.
6.2 Iron and Steel Development Occurrences of iron mineralisation are relatively common in Ghana. Over the years the Government has devoted considerable effort to the assessment of iron resources and the promotion and development of an iron and steel industry making use of the Opon-Mansi, Shieni and the Pudo deposits.
The development of these deposits is of priority to Government and investors are welcome to review documentation that exists on them.
6.3 Solar Salt Production and Chlor-Alkali Industry Mr. Chairman, Ghana possesses one of the largest proven renewable solar salt production potential along the entire West African coastline stretching over a distance of over 500km. Effective exploitation would enable the country to supply the Salt needs of the entire sub-region. Indeed, Government has completed a study to identify and demarcate areas that will be suitable for salt winning. Such Salt Land banks will be made available to investors.
Mr. Chairman, the development of the Salt industry has become particularly important following the production of crude oil in Ghana as it would assist in the development of the petrochemical industry in Ghana.
6.4 Service and Engineering Sector
Mr. Chairman, Colleague Ministers, there are several companies in Ghana providing support services including; contract mining and drilling, assay laboratories, mining and geological consultancies to mining companies. Using Ghana as a base, these companies have ventured and expanded their activities into the West African sub-region. Government has encouraged such companies to continue investing in Ghana through provision of incentives. Investment opportunities exist for investors to set up manufacturing components for or assembling of plants and machinery that are required for the mining industry.
7.0 CONCLUSION Mr. Chairman, Colleague Ministers, Members of the Mining Business Fraternity, in addition to the numerous mining sector investment opportunities, the attractiveness of Ghana’s investment climate is buttressed by a revised legal and regulatory framework and an improved infrastructure. These, supported by the availability of a pool of skilled labour to service the industry makes Ghana a preferred destination of choice for mining sector investment.
More importantly, the country has enjoyed decades of political stability and the proverbial Ghanaian hospitality awaits you all. The Government also continues to demonstrate its commitment in making the private sector the engine of growth in the economy.
As I encourage and invite you to join us in our “Better Ghana agenda” of economic development, I do so against the backdrop of very friendly relations and fruitful cooperation that exists between Ghana and the rest of the world.
I now wish to kindly invite you, particularly investors, to contact our staff at the Ghana Booth number 4404 at this conference for more information about investment opportunities in the mining industry and also follow up and visit Ghana to take advantage of the opportunities to invest in Ghana.