Interview: Douglas Macquarrie
What challenges does the Ghanaian mining sector face when it comes to encouraging development and attracting investment?
DOUGLAS MACQUARRIE: Mining is an important contributor to Ghana’s GDP and accounts for the largest portion of the country’s exports by value, at nearly 50%. As such, continuing to strengthen the sector will create jobs and have wider economic benefits. Progress has been made to digitalise many of the operations within the Minerals Commission and the Registrar General’s Department, which has increased the sector’s efficiency and made investment more attractive.
Exploration activities must increase if Ghana is to continue being Africa’s largest gold producer. Junior mining companies do not have operating mines to fund their exploration activities, and instead use risk capital. The government should tailor policy to attract more exploration companies to Ghana to search for new mineral deposits. The Ghana Stock Exchange is actively seeking new listings and can be a source of capital for these junior companies. Asante Gold has applied to co-list on the Ghana Stock Exchange – hopefully the first of many new mining listings.
Many juniors fail, but others are successful and make large-scale discoveries that become profitable, job-creating and tax-paying mines. Their limited funding should be focused on acquiring concessions, developing targets and drilling holes. For the sector to reach its potential, junior companies need generous tax, land-access and regulatory-fee exemptions to allow them to maximise their exploration spending. These exemptions should extend beyond the exploration period to encourage investors to fund the high-risk exploration.
In what ways will digitalisation and the adoption of new technologies impact the mining industry?
MACQUARRIE: Mine exploration has long been at the forefront of developing technology to see deeper into the earth and discover new deposits. Geophysics has adopted digital solutions to increase the sensitivity and resolution of various exploration techniques, and has tapped cloud-based technologies to reduce processing times, increase the availability of data for decision-making and enable collaboration.
However, mining has lagged behind other sectors in terms of digitalisation and the adoption of new technologies. This is changing, with many companies embracing digital and electric vehicle solutions wherever possible. It is expected that the sector will soon see fully electric underground mining operations and electric, driverless surface mining fleets as the new normal. Adopting new technological solutions in the coming years will assist the industry in improving its environmental, social and governance (ESG) impact, while growing revenue. For example, Asante Gold is studying the use of proven vertical cutter technologies used in the construction industry to mine a vertical slot to depths of up to 250 metres. By applying this to narrow, near-vertical sections of its Kubi deposit, the mine could see significant ESG benefits, as ore will be mined directly – and more efficiently and safely – compared to traditional means.
How is sustainability being factored into future plans in the mining industry?
MACQUARRIE: Ghana has a strong regulatory framework for mining that is compliant with international standards. This, together with the fact the country is home to multiple large, high-grade and long-life gold deposits, makes the industry naturally sustainable and an attractive destination for investment.
At the same time, the global conversation around ESG standards is becoming increasingly important. Investment in ESG is a two-way street and cannot be the responsibility of the private sector alone. It is important for the government to support these endeavours and provide incentives. Doing so will help support the economy, create jobs through local production and import substitution, and ensure a more sustainable future.
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