Overaged cocoa farms to be rehabilitated

Over 10,000 hectares of diseased and overage cocoa farms in the Western North and Eastern regions are to be treated and rehabilitated this year by the Ghana Cocoa Board (COCOBOD).

Under a project spearheaded by the Cocobod, the project will involve the removal of 11 million trees for replanting.

Currently, about 17% of cocoa area, that is about 309,830.73 hectares, surveyed is affected by the Cocoa Swollen Shoot Virus Disease (CSSVD) while about 23 per cent (411,086.41 ha) of the country’s cocoa tree stock is more than 30 years and economically unproductive.

Executive Director Cocoa Health and Extension Division (CHED), Emmanuel Opoku, who disclosed this at a workshop on smart cocoa financing said the Board would commence another country-wide survey to map out and update CSSVD outbreak areas in all the 60 CHED Districts.

He said this would involve a total of 4,185 proposed sectors.

The Climate-Smart Finance workshop was organised by Rainforest Alliance with support from partners, including World Cocoa Foundation, Root capital and Climate Change Agriculture and Food Security, to identify concrete solutions and ways to unlock climate smart agriculture finance in the Ghanaian Cocoa sector.

It was on the theme: “Designing Investment Mechanisms to Finance Climate-Smart Cocoa in the Ghanaian Cocoa Sector.”

Mr. Opoku said Cocobod would provide farmers with plantain suckers, economic tree, and hybrid cocoa seedlings, which are early-bearing, high-yielding and disease tolerant to replant all treated and rehabilitated farms and also rendering effective back-up extension services to all the farmers.

Mr. Opoku said the Board would continue its intensive rehabilitation and control programmes next year 2017/18 cocoa season through the removal of 118,757,158 diseased trees (107,961.5 ha) and replanting of 58,909.09 ha of unproductive farms country-wide.

He said the Board also hoped to complete a resurvey of 4,185 proposed sectors to map out outbreak areas to facilitate disease control and to effectively maintain a total of 596,533.84 hectares of productive (‘A’, ‘B’ and C classes) cocoa through mistletoe removal and pruning.

Mr. Opoku said Cocobod envisaged to recoup the investment cost through improved yields after successful treatment and replanting of the farms.

He said it was important stakeholders bring to bear their ideas on how to finance the cocoa sector to make it buoyant to be able to sustain the economy going forward.

Mr. Corne de Louw, Senior Project Manager Rabo Development, said access to finance was critical to increase productivity and to implement climate-smart agriculture practices.

Newmont’s Ahafo expansion to produce 1.8m ounces of gold

Newmont Mining Corporation has announced plans to extend profitable production at its Ahafo operations in the country by building a new underground mine and expanding plant capacity by more than 50 percent.

The Subika Underground mine is expected to produce 1.8 million ounces of gold over an 11-year mine life, and features ore grades of 4.7 grams per tonne.

The mill expansion is expected to improve margins and support profitable production at Ahafo through at least 2029.

“We are building on strong performance and solid infrastructure by investing in the next generation of profitable production at Ahafo,” said Gary Goldberg, President and Chief Executive Officer.

“The Subika Underground mine will also create a platform to support even longer-term growth. Recent exploration results demonstrate considerable upside within the Subika deposit and adjacent Apensu Deeps deposit.”

The projects have been optimized to improve internal rates of return to more than 20 percent at a US$1,200 gold price. In the first five full years of production – or from 2020 through 2024 – they are forecast to add incremental gold production of between 200,000 and 300,000 ounces per year at Ahafo for total average annual production of 550,000 to 650,000 ounces.

The projects are also expected to lower unit costs during the same time frame. Costs applicable to sales (CAS) are expected to decrease by between US$150 and US$250 per ounce compared to 2016 for total average CAS of US$650 to US$750 per ounce.

All-in sustaining costs (AISC) are expected to decrease by between $250 and $350 per ounce compared to 2016 for total average AISC of US$800 to US$900 per ounce.

Newmont received its environmental permit to build and operate the Subika Underground mine in March 2017. The resource has been studied for 11 years and execution and technical risks are well understood. The Company expects to reach first production at the mine in the second half of 2017 and commercial production in the second half of 2018.

The Ahafo Mill Expansion will increase annual mill capacity by 50 percent to nearly 10 million tonnes by adding a crusher, grinding mill and leach tanks to the circuit.

The expansion supports more efficient processing of harder, lower grade ore from existing surface mines, as well as Ahafo’s stockpiles and the Subika Underground mine. Newmont expects first gold production at the mill expansion in the first half of 2019 and commercial production in the second half of 2019.

Development capital of between $300 million and $380 million will be funded through free cash flow and available cash balances. Newmont will uphold local hiring and procurement commitments and existing bargaining agreements through construction and operation.

Newmont has one of the strongest project pipelines in the gold sector. Last year, the Company built its Merian operation in Suriname on time and US$150 million below budget, and completed the first phase of its Long Canyon mine two months ahead of schedule and $50 million below budget.

Commercial production at Ahafo began in 2006 and the operation achieved five million ounces of production in October 2016. Three surface mines – Subika, Awonsu, Amoma – feed a conventional gold mill with a carbon-in-leach circuit. A fourth surface mine, Apensu, is currently being used for water storage.

GroFin assures SMEs of easy access to financing

Mr. Samuel Sedagah, Country Manager of GroFin, a business loans company, has assured Small and Medium Enterprises (SMEs) in the country of the company’s commitment to supporting them to boost wealth creation and increase employment.

In an interview with the B&FT, Mr. Sedagh said: “SMEs must disabuse their minds that access to finance is a limitation to their business and can rely on GroFin to invest in their businesses.”

He was speaking on the sidelines of a day’s workshop which brought together financial sector players, SME operators, business executives and entrepreneurs, aimed at exposing GroFin to partners about its broad based operational strategies of assisting SMEs with easy access to unlimited funds for business expansion.

Mr. Sedagah emphasised that GroFin, which was established in 2004 with the sole aim of developing and managing SME funds, currently manages 10 SME funds with total capital commitments in excess of US$500 million.

He also said GroFin is being supported by more than 30 leading international investors, adding that the company’s target is to assist committed entrepreneurs to access tailored finance and experienced business support.

Since the inception of GroFin, Mr. Sedagah explained, it has approved over 750 transactions, sustained 95,125 total number of jobs and 480,000 total family members impacted by investees, as well as sustained 28,500, representing 30% female jobs and added US$700 million economic value.

“We ensure that the businesses have a measurable impact and that SMEs that provide indirect job opportunities like training, skills development and or environmental services such as water, waste, energy, ecotourism are also attractive to GroFin.

Our minimum financing is US$100,000, cedi equivalent and maximum is US$1.5million…, repayments are normally in local currency except where the client wants the currency in dollars,” he said.

Mr. Raymond Denteh, GroFin’s Senior Investment Manager, added that the SME sector holds the key to accelerated development and must not be underestimated.

“As many as 70-90% of all SMEs fail in their first three years of existence and their success is dependent on access to finance, business skills and the enabling environment for growth,” he said.

GroFin’s pre-investment business support data of over 8,000 entrepreneurs shows that 72% have no formal accounting system, 43% are not compliant with local regulations, 66% lack environmental, safety and governance standards, 57% have no formal business plan, 63% of capital at risk.

“And these are all being recorded in a difficult SME enabling environment, Mr. Denteh stated.

He added: “GroFin delivers business support to clients prior to the investment and during investment period, focusing on improving business viability, sustainability and growth.

For this reason, entrepreneurs need to be receptive to receiving advice and implementing recommendations, normally around improving formalisation of their business.”