Sulemanu Koney,
President,
Ghana Chamber of Mines
"Most mining firms they do not have the flexibility to ramp up overnight. This is why, as an industry, we should create an environment in which mining companies are encouraged to expand production proactively; we cannot wait for a pandemic, for geopolitical tensions, or for a global economic meltdown to realize the importance of the gold sector."

What have been the main effects of the pandemic on the mining industry in Ghana?

When the pandemic broke out, the government issued a lockdown to stall the spread of the virus, but the mining industry was exempted from it and therefore the consequences of the lockdown were milder on the sector. Mining companies continued work, but they had to comply with the COVID-19 protocols. The supply chain was not seriously disrupted; cargo was allowed to come into the country through the ports. Operators also resorted to chartered flights instead of the usual and more cost effective commercial flights. Whilst the provision of PPE to community members as well as health institutions in close proximity to the mines was necessary to abate the spread of the pandemic it entailed unbudgeted expenses that added financial strains to the industry.

With more than 95% of Ghana’s mining industry represented by gold, how is the country benefiting from the current bull market?

Most mining firms they do not have the flexibility to ramp up overnight. This is why, as an industry, we should create an environment in which mining companies are encouraged to expand production proactively; we cannot wait for a pandemic, for geopolitical tensions, or for a global economic meltdown to realize the importance of the gold sector. By virtue of its unique nature, the gold industry has the potential to boost the economy when other sectors struggle.

Ghana’s competitiveness as a greenfield exploration destination has been waning in recent years. How can policy incentivize investment in this sector?

Policy makers must understand that ongoing mining is impossible without conducting exploration. At the Chamber, we have done sustained advocacy on this matter, but, unfortunately, we have not yet received the kind of response we expect, such as fiscal reliefs to exploration companies.

Exploration is a high-risk endeavour and therefore we should significantly reduce entry barriers to firms who invest in that phase of mining. A big part of exploration firm’s expenses is attributable to assaying and drilling, and because these services are outsourced, they tend to bear VAT. The exemption from VAT for these services is a key advocacy point at the Chamber. There is general consensus supporting our advocacy among policy makers, however, this has not been translated into a policy review.

What have been the most important regulatory updates?

The Ghana Investment Promotion Centre (GIPC) has taken steps to review its Act, which covers a number of sectors of the economy. In the mining industry itself, early this year we started discussions with the Minerals Commission and the Ministry of Lands and Natural Resources regarding the review of the Minerals and Mining Act 2006, together with another key legislation. After 14 years, it is high time we reviewed the main legal architecture for the mining industry. The current expectation is that the update will include stand-alone local content and local participation legislation. Unfortunately, these developments have been slowed down by the pandemic.

Following a nationwide clampdown on illegal mining two years ago, and the implementation of “Community Mining,” what is the current relationship between the formal mining industry and its SSM (small scale mining) and artisanal counterparts?

As a Chamber, we endeavour to have very warm relations with small scale miners, and we encouraged them in the past to come together and formalize their operations; they have since organized into the Ghana National Association of Small-Scale Miners (GNASSM). This segment represents a significant part of the mining industry and they should be considered as such. Of course, SSMs need to be responsible players and respect their environmental, social, and fiscal commitments. Recent information indicates that there has been an increase in the amount of taxes they pay to the State. However, there are still issues around the fiscal framework for small-scale miners, but the best way to help them is to bring them into the mainstream sector.

What has been driving the agenda at the Ghana Chamber of Mines?

We have worked on expanding the frontiers of our mining industry, by strengthening both backward and forward linkages between mining and the rest of the economy. For instance, we have been at the forefront of engaging with stakeholders around gold refining in the country. We expect to have three refineries coming up in the country hopefully by the end of the year.

Do you have a final message?

Despite our long history in mining, we do not believe we are matured destination yet, because there is so much more to the industry, with many projects coming on-stream and more opportunities for greenfield exploration as well as for mine support services companies. We need to tell the mining story more comprehensively than we have done in the past- there is much more to the mining industry than fiscal contributions. We need to work together to harness the linkage opportunities around the mining industry to spur a broad based socio-economic development of our nation.