Government needs to strengthen the
capacity of local mining firms and assist in mobilising resources to explore and
execute contracts to ensure active local participation in the mining sector, Mr. Ibrahim Mahama,
Chief Executive Officer of Engineers and Planners (E&P), has said.
“Local content does not mean give locals the job and that is
it. Local companies must be helped to mobilise the needed resources; and when given
that advantage, there is no job that a local person cannot do.”
The mining sector, which is currently dominated by foreign
companies, has the potential to unbolt significant socio-economic benefits,
reduce poverty and grow the economy. However, this has not been the reality in
the past in a sector dominated by foreign companies.
“The sector has not been as well-managed and regulated as it
should be,” Mr. Mike Hammah, Minister for Lands and Natural Resources, admitted
in a recent interview.
The protracted delay in the passage of the local content
bill, currently before Parliament, has not helped matters. “The passage of the
bill has taken too long. If government wants to ensure local content
participation, it must do things quickly,” Mr. Mahama, who heads the only wholly-owned Ghanaian contract mining company,
said.
Foreign mining firms seeking to own a mining concession or engage in an
exploration activity in the country oftentimes have the financial support of
their governments or a financial institution. The situation is different
locally where local businesses, in a capital intensive industry, are expected
to solely raise capital to undertake exploration activities or to acquire the
machinery to undertake contract mining.
“We need to build the capacity of local firms to ensure they have an edge.
Foreign companies who apply for concessions here in Ghana have the backing and
support of their governments, banks or other financiers. Government should
listen to businessmen, not technocrats; people who are walking the walk and
talking the talk.”
E&P, which undertakes contract mining services, equipment hiring,
and construction of bridges and dams, is currently engaged by Golden Star
Resources Limited to mine its Mpoho concession in the Western Region.
The company operates not only in
the Ghanaian mining industry but is currently undertaking contract mining
across the West African sub-region for major private mining firms.
It has a presence in Liberia, where it is engaged in the mining of iron ore for the world’s largest
steel and mining company, ArcelorMittal, at its Yekepa Mine concession.
It is also in
Sierra Leone and Senegal and has been engaged to start contract mining in the
DR Congo and Congo Brazzaville.
The company has over the years completed key
contracts for land-clearing and construction of access roads on mine sites for
various mining companies including Bonte Goldmines and Sankara Goldfields.
It has also
undertaken earthmoving and haulage of ore materials for mining contractors PW
(Ghana) Ltd, Tarkwa Goldfields Ltd, Abosso Goldfields Ltd, and Bogoso
Goldfields Ltd.
The company has 100% local staffing at all its mines in Ghana
and is set to replicate that module in its operations in other African states.
It recruits students from the University of Mines and Technology (UMAT), trains,
and employs them: it does not retrench its workers after the closure of a mine.
The mining industry accounts for about 7% of the country’s
GDP. Mineral exports account for 42% of total merchandise exports. Export
revenue from the mineral sector in 2011 amounted to about US$5billion. The
sector also contributed about 17.5% of the state’s total corporate tax receipts
and 28.3% of government revenue.
Government
in its 2012 budget statement announced that the corporate tax rate for miners
is being increased from the current 25% to 35%, while a windfall profit tax of
10% will be imposed. The new tax regime has generated a lot of debate among
players in the industry, but the government has further moved to renegotiate
mining contracts.
Source:BFT
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