Interview: Sulemanu Koney
What benefits will result from the formalisation of small-scale mining (SSM)?
SULEMANU KONEY: The SSM segment is an important source of employment for a significant proportion of the local work force. With respect to employment statistics, the Minerals Commission (MC) – the sector regulator – has emphasised that there are over 1m jobs in the sector, which is quite significant in a country with a population of more than 25m. These job numbers are critical to the country’s development and infrastructure. The challenge for SSM will be formalising it so that those whose lives are dependent upon mining can make a living, be proud of their trade and know they are adding real value to their society in a manner that does not adversely impact the environment and other members of society.
Ghana must strive to extract real value from a regulated and controlled segment, despite the additional challenges that illegal SSM presents. If SSM is formalised and more closely monitored, the MC will receive safety reports, production targets and more concrete employee figures.
Borrowed from larger mining companies, the same principles apply for SSM. Larger companies have a vested interest in ensuring that mining at all levels is carried out with due diligence and adheres to health and safety requirements.
In what ways have SSM firms adapted to the sector’s changing dynamic?
KONEY: SSM firms have formed the Ghana National Association of Small Scale Miners and regularly cooperate with the University of Mines and Technology. The two entities have designed training competency programmes and agreed upon capacity building, as well as health, safety and environmental regulations. These remain necessary in addition to certification, proper methodology and engineering skills, all required by the MC for SSM companies. Experienced graduates from the university are continuously providing the SSM segment with the employment it so desperately needs to grow and be formalised. SSM should be able to tap into a pool of certified consultants from Ghana’s Environmental Protection Agency, the Inspectorate Division of the MC and the Chief Inspector of Mines. These affordable, cost-effective measures on a per-contract basis will decrease the hazardous effects that can result from SSM and assure quality across the segment.
How will the national mining policy make the sector inviting to foreign investors?
KONEY: Ghana has maintained its reputation as a very strong mining investment destination, and was one of the first sub-Saharan countries to have mining legislation enacted to bring private capital into the sector. Production in-country remains robust, but real reform will need to take place in exploration. With the help of key stakeholders, including the MC and the Ministry of Finance and Economic Planning, reform will allow the sector’s value chain to continue to strengthen.
In the last few years the government has looked at provisions of the Minerals and Mining Act of 2006. The law supports entering into “stability agreements” between mining companies and the national government. Some companies are taking advantage of these agreements because the act looks at reforming the current tax regime to accommodate the mood swings of the mining industry.
Future changes within the tax regime, alongside incentives, could attract foreign investment not only for larger companies, but also for small and medium-sized enterprises. Although a small number of companies have accessed the sliding scale fiscal regime, it would be prudent to extend it to all mining companies in order to create a uniform and predictable environment for their operations.
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