Better late than never

Dr. Toni Aubynn, Chief Executive Officer of the Ghana Chamber of Mines, says the country has not derived maximum benefits from mining because of its inability to devise a comprehensive vision on local content for the sector.

“We need to develop a national vision on local content in the mining industry if we want to derive the full benefits from mining.

“This comprehensive national vision will spell out and promote local participation in the mining sector. You cannot blame the current government or the past government [for not developing one]. Maybe as a nation we have failed,” he told the Business & Financial Times in an interview.

He advocated a strengthening of local participation in the extractive sector, especially in the different ends of the supply chain since it is an avenue that can boost the economic advancement of the country. But he maintained any such effort should be situated within a policy framework and vision.

“The best way to keep the mining industry as an integral part of the country’s economy is to put in place deliberate and sustained local content and capability-development policies, backed by legislation and enforcement mechanisms -- and not just resorting to appeals or pleas to mining exploration and production companies.”

He disclosed that as a major step towards incorporating local content in mining, the Chamber of Mines, Minerals Commission and the International Finance Corporation (IFC) of the World Bank have entered into a Memorandum of Understanding (MoU), where 29 key areas have been identified to deepen local participation.

He said the MOU is intended to support the growth of local businesses working in the mining industry.

Extractive industry watchers have observed that the sector is fully taken over by foreigners, though locals have equal capabilities in many areas of the industry.

Many reckon that if the necessary support had been provided, Ghanaians who would have ventured into the sector and raised capital from within to manage their own operations.

An estimated 34 percent of the value of annual mineral exports, currently enjoyed by foreign firms and expatriates providing mining services in the country, could revert to locals if they were able to provide these services.

Estimates by the Minerals Commission show that these services procured by the mining firms in 2008 alone came to US$680 million, and they continue to go to foreigners because the locals have not positioned themselves to take advantage of these opportunities in the sector.

In a recent interview, Lands, Forestry and Natural Resources Minister Mike Hammah said new regulations have been finalised to boost participation of local contractors in the mining sector.

These regulations, which constitute subsidiary legislations for the industry, are targetted at giving effect to the new policy on local content introduced by the government to enhance the development of Ghanaian enterprises. It seeks essentially to confine the provision of specific products and services in the mining sector to local contractors.

“Apart from creating jobs and economic opportunities for locals, this is an effort to enhance the outcome of mining operations on indigenous populations -- a vexed issue that has been a source of strife between mining companies and inhabitants of mining communities,” Hammah said.