Newmont’s Akyem mine gets approval

The board of Newmont Mining Corporation has approved funding for its estimated 7.2 million ounces equity reserves, located in Akyem, in the Ajenua Bepo Forest in the Eastern Region, expected to start in early 2013.

Adiki Ofeibea Ayitevie, Regional Manager Communications of Newmont, told B&FT: “The approval of the funding would facilitate the awarding of critical mining contracts, purchasing of equipment and continuing the settlement of compensation.

“Newmont has so far concluded negotiations with communities and has started payment of compensation to displaced parties.

“More than 1,700 households are expected to be paid compensation for loss of immovable structures and farmlands. Out of that, about 300 households will be resettled - and so far 80 percent have been paid crop compensation.”

The project has about 15 years mining life and is expected to produce between 480, 000 and 550,000 ounces of gold annually for the first five years of its operation.

Initial capital cost is estimated at between US$700 million and US$1billion.

The Board has cleared Akyem through the fourth-stage gate in Newmont’s four-gate project review process, which roughly equates to bankable feasibility approval.

The company expects Akyem to add to its production base and payrolls while exhibiting leadership in safety, environmental stewardship and social responsibility.

Newmont views its Africa region as a growth-engine for the company, and the Board’s decision on Akyem reflects confidence in building on its successes in Ghana.

Newmont’s Ahafo Mine and Akyem Project together have approximately 17.4 million equity ounces of proven and probable gold reserves - representing about 20 percent of Newmont’s global equity reserves of 86.5 million ounces of gold as at the end of the 2008.

The Ahafo mine poured its first gold in 2006 and commenced commercial production in the same year. Ahafo sold 202,000 ounces of gold in 2006 and was expected to produce between 410,000 and 450,000 ounces of gold in 2007 as the mine entered its first full year of production.

It currently produces about 500,000 ounces of gold annually from its three mining pits, which also have 15 years of mine life.

Newmont purchased both the Ahafo and the Akyem projects as part of the Normandy Mining acquisition in February of 2002.

The company said it will continue to partner with its key stakeholders including local communities, local government, traditional authorities and local businesses to create shared value through jobs, workforce training and economic and social development in the areas around the project.

Newmont has recently been granted a mining lease and environmental permit from the Environmental Protection Agency to commence the Akyem project, and engineering for the project is about 70 percent complete, Ayitevi said.

“Following completion of further economic and power analysis to ensure sustainability, the project will advance to its next phase of development which will involve the building of the mining plant to pave way for the full-scale mining production,” she said.

“We are still engaged with the community to determine appropriate compensation. We are also undertaking a rapid access survey to help determine the real custodians of the land. It’s going to be to be a continuous process.”

Mrs. Ayitevie indicated that the company’s commitment to its social responsibility at the Akyem project has been studied extensively by international and national environmental experts, members of the communities living in the area, and by agencies and departments of government.

The Akyem project has for the past five years, been subject to a thorough environmental impact study, public consultation process and an independent review process.

“Newmont’s industry leading performance is reflected through Newmont Ghana’s high standards in environmental management, health and safety and creating value and opportunity for its host communities.

“In implementing our commitment, the company assures all individuals with farms and immovable properties, which have or will be impacted by our Akyem Project, that they will be duly compensated consistent with the express provisions in the Minerals and Mining Law and relevant provisions in the Constitution of Ghana.

“This will ensure that conflict at the mining community is minimised and also position the company as good corporate citizens,” Ayitevie stated.