Background on Mining in Ghana

Speaker: Mr. Sulemanu Koney – Director, Analysis Research and Finance, The Ghana Chamber of Mines

The Ghana Chamber of Mines is an organization that represents the collective interest of its member mining companies, about 90% of companies by production volume. Below is an account of Mr. Koney's presentation to our group. Next week we will be conducting site visits of this and several other industrial processes currently operating in Ghana so that we can judge for ourselves the accuracy of all testimonies we hear.

Mining History

Ghana is in the middle of a third gold rush, marked by technological changes from underground to surface mining operations. Part of the reason for the intensity is due to the historically weak mining regulations and environmental standards. Ghana was once known as the Gold Coast due to the significant amount of gold mined within its borders. Though the industry has wained over the years, the government has encouraged gold mining sector rejuvenation since 1984. Interestingly, however, the mining sector, especially gold mining has experienced a shift in ownership from state control to control by foreign investors.

Some of the traditional and potential materials mined in the African nation of Ghana  include:

• Traditional: gold, manganese, bauxite, diamonds
• Nontraditional: kaolin, salt, clay, marble, mica, limestone etc.

Regulation and Oversight

In Ghana, all natural resources are owned by the government, so the extraction of these materials are monitored by the same means. All companies must possess a license from the Sector minister to mine in Ghana. The Minerals Commission (MINCOM) oversees all regulation of the legal process, recommending mineral policy, promoting mineral development, advising the government, and serving as a liaison between industry and the government. Similar to the U.S., the Inspectorate Division of the Minerals Commission conducts the health and safety inspections, as well as the maintenance of mining records. The Ghana Environmental Protection (EPA), however, is responsible for dealing with all environmental issues. One of its major contributions to ensuring mining is done safely is referred to as the AKOBEN audit. The AKOBEN is a symbol connoting vigilance. This audit involves environmental and social performance reporting whereby companies are ranked according to their performance and implications of the mining process. Perhaps this is a task that could be adopted by the U.S. EPA's personnel - given adequate funding of course.

Another fantastic operation in place in Ghana regarding the mining process is the country's adoption of the Best International Governance Practices, which are part of EITI (Extractive Industries Transparency Initiative). If you are remotely interested in government/industry transparency, thisis an interesting initiative to look into.

By the Numbers

According to the representative, the gold mining industry contributes significantly to the government and society via royalties, leases, levies, taxes, and foreign direct investment (FDI). Records from the Minerals Commission show that FDI in the mining sector shot up from $6 million (US) to $770 million (not inflation adjusted). 2010 estimates indicate that the mining industry in Ghana directly employs 15,861 people - 98% Ghanaian, 2% expatriate.

Check back soon for a follow up review of the mining sector in Ghana.