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Expanding the frontiers of mining
Posted on: 23-Aug-2012         Source: thebftonline.com
A total of US$11.5billion has been invested in the mining industry since Ghana’s Structural Adjustment programme was introduced in 1983-2011.

These investments came from producing, exploration and support service companies -- by the end of 1999 the sector had attracted over US$3billion worth of foreign direct investment, with exploration licences mainly in the domain of gold.

Cumulatively, the investment inflow into the sub-sectors from 2000-2011 amounted to over US$6.2billion -- as at the end of December 2011, 235 local and foreign companies held prospecting and reconnaissance licences.

Dr. Ben Addo, speaking on the topic “Expanding the frontiers of mining technology”, explained that currently there are 14 mines in active operation -- 12 gold, one bauxite, and one manganese.

He said total mineral revenue of producing member companies of the Chamber of Mines rose significantly from US$4.78billion in 2011, representing an increase of 28% primarily on the account of the good price of gold.

He added that the industry contributed 38.27% of Ghana’s total corporate tax earnings, 27.61% of government revenue and 42% of total merchandise export.

He pointed out that gold dominates the mining sector and Ghana is Africa’s second most important producer of gold after South Africa, the third-largest producer of manganese and a significant producer of bauxite and diamonds.

Dr. Addo said the industry has increased its contribution to gross foreign exchange earnings and appears to have attracted substantial foreign direct investment funds over the years.

The sector, he said, now accounts for 7% of the country’s Gross Domestic Products -- according to the Bank of Ghana, the mining industry’s contribution to total merchandise export was about 40% in 2011.

He explained that mining in itself is not sustainable; rather, the best way of propelling development is to develop infrastructure and human resource capacity to facilitate the growth of other related business.

“The enhancement of local content to integrate the economy is of paramount importance; rather than focusing solely on tax, mining should be integrated into the system/economy -- a lot more should be invested into local content,” he said.

Further, a new local content law for mining firms as part of regulations under the Minerals Act of 2006 has just been passed by parliament -- under the law, mining firms will be required to submit a five-year procurement plan implementing the law to the Mineral Commission for approval.

This, he explained, will have to do with how they intend to promote local content -- that is, what local content they are using or plan to use and the mechanisms they will put in that develop local enterprises to support the local content agenda.

“We, as Ghanaians, should develop businesses to take advantage of opportunities such as this,” he advised.

By Juliet AGUIAR, Tarkwa