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Description

INVESTMENT OPPORTUNITIES

Emphasis on investment promotion has been a major objective of the industry with a shift to a comprehensive vision that facilitates greater exploitation of Ghana's industrial minerals.

Investment opportunities in the industry are in the areas of exploitation or production and industrial processes. They include:

• The production of industrial minerals for both local and international consumption
• Applications/processing of industrial minerals in the areas of construction, ceramics, paints, electronics, filtration, plastics, glass, detergents and paper.

Production

• Companies to set up refinery facilities to serve the local industry for value-added products.
• Companies to exploit and produce solar salt. Potential exists for the utilization of part of the salt to produce caustic soda which is a raw material for the soap and detergent industry. The chlorine co-product can also be used as water treatment chemical and also serve as raw materials for the production of various health and sanitation chemicals.
• Companies to produce clinker for the mining industry. Demand for clinker is estimated at over one million metric tons per annum.
• Companies to exploit the extensive deposit of granite to produce high quality floor tiles.
• Companies to produce dimension stones for the building industry
• Suppliers to supply salt for the local market.

 

Engineering and Services
a. Service companies to provide support services, including contract drilling, assay laboratories, contract mining and geological consultancies to mining companies in the country.
b. Companies to set up manufacturing plants and machinery for the mining industry.
c. Companies to set up downstream production facilities to manufacture key input for the mining industry. Examples, mill balls, drill bits, cyanide and activated carbon.

 

 

 

Sector  Overview

Ghana is endowed with substantial mineral resources and has a well-established mining sector, which has grown considerably in recent years to represent an important pillar of the Ghanaian economy.

The general slowdown in the mining industry however resulted in medium and micro impacts in terms of loss of employment and other local socio-economic contributions, as operating mines and exploration companies restructured to cut cost in the face of falling gold price. The mining sector contributed GH¢1,285 million to Government revenue in 2015 as against GH¢1,193 million in year 2014. This represented an increase of 7.79% over the previous year’s figure. Pay As You Earn (PAYE) from the mining sector contributed GHC 478.1 million in 2015 as against GHC 291.73 million in 2014 representing a 63.88% increase. In 2015, a total of GHC 485.63 million was paid as mineral royalties. This represents a 3.24% increase over the 2014 value of GHC 470.37 million. It is however worthy to know that, cooperate income tax paid by mining companies decreased by (25.28%) from GHC 429.53 million in 2014 to GHC 320.94 million in 2015. 

In 2015, mining sector contributed GHC 1,285 million (14.14%) of a total Domestic Revenue Collection of GHC 9,091 million. It is worthy to note that, though revenue generated from the mining sector has been on the steady assent, the contribution of mining sector to total domestic tax collection has been declining. Figure 4.4 illustrates the trend of contribution of mining sector to total Domestic Tax collection over past ten (10) years.

Earnings from minerals exported during the year 2015 amounted to US$ 3,322.61 million compared to US$ 4,516.29 million earned in year 2014. This shows a decrease of 26.43%. The unfavorable price of gold, Ghana’s flagship mineral, on the international commodity market which resulted in a decline in gold production accounted for the decrease in revenue.  Of the total earnings from mineral exports in 2015 (US$ 3,322.61), gold accounted for US$ 3,212.59 million (96.68%), bauxite brought in US$ 41.06 million (1.24%), whilst diamonds contributed US$ 4.22 million (0.31%) and Manganese racked up US$ 64.74 million (1.95%)

In year 2015, data from the Bank of Ghana indicate that total merchandise export earnings were US$10,356.70 million compared to US$ 12,983.16 million in year 2014. The contribution of minerals to the earnings for the year was 32.0% of the total merchandise exports.  

 

The Market
Industry Composition

Globally, Ghana is renowned for four (4) important mineral resources, namely gold, diamonds, manganese and bauxite. The minerals extractive industry had fifteen (15) major large scale mining companies operating in 2015. Out of these, thirteen (13) produced gold whilst one (1) each produced bauxite and manganese. Below is a table of these companies and their type of mining operation.

 

NO.	COMPANY	TYPE OF COMMODITY	SURFACE OPERATIONS	UNDERGROUND OPERATIONS
1	Golden Star (Wassa) Ltd.	Gold	
2	Golden Star (Bogoso/Prestea) Ltd.	Gold	
3	Gold Fields Ghana Ltd.- Damang Mine	Gold	
4	Gold Fields Ghana Ltd. - Tarkwa	Gold	
5	AngloGold Ashanti Iduapriem Mine	Gold		
6	AngloGold Ashanti Obuasi Mine	Gold		
7	Med Mining Company	Gold	
8	Chirano Gold Mines Ltd	Gold		
9	Newmont Ghana Gold Ltd–Ahafo Mine	Gold		
10	Mensin Gold Bibiani Ltd	Gold		
11	Perseus Mining Ghana Ltd.	Gold	
12	Adamus Resources Ltd.	Gold	
13	Newmont Golden Ridge Ltd. Akyem	Gold	
14	Ghana Bauxite Company Ltd	Bauxite	
15	Ghana Manganese Co. Ltd.	Manganese	

 

Additionally, there were over three hundred registered small-scale mining groups and ninety mine support service companies. The small-scale mining industry is reserved for Ghanaians.

Minerals Prospecting  

The Minerals Commission issued 1,261 permits in 2015 compared to 1,366 in 2014 to regulate various mineral operations as detailed below

 

OPERATION	No. OF PERMITS
	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	Total
Mining Operating Permit	29	5	1	0	35
Salt Operating Permit	3	0	1	0	4
Clay / Kaolin Operating Permit	0	0	1	0	1
Quarry Operating Permit	52	16	5	7	80
Sand / Gravel Winning Permit	91	14	18	3	126
Gold / Diamond Digging Permit	47	28	28	9	112
Prospecting Permit	37	38	9	6	90
Permit to Purchase Explosives	57	20	8	4	89
Permit to Store Explosives	112	19	6	0	137
Permit to Transfer Explosives	91	95	111	73	370
Explosives Transport	3	0	0	0	3
Explosives Manufacture	4	0	0	0	4
Mining Services Operating Permit	109	26	29	8	172
Explosives Truck / Van Operating Permit	37	0	1	0	38
Mercury License	0	0	0	0	0
TOTAL	672	261	218	110	1,261

 

2015 Production Summary 

The year 2015 witnessed a mixed performance in the production of the traditional minerals. Gold and Diamonds production witnessed a significant fall in production whilst manganese and bauxite saw increases in production. A total of 3,623,740 ounces of gold was produced representing 18.96% decrease over 2013 production of 4,471,573 ounces.

Small scale miners’ contribution to total national production amounted to 1,031,176 ounces (28.46%). The reduction in production was mainly attributed to the poor performance of the gold price on the world market during 2015.

Diamond production for the review year was 174,364 carats. This represents a significant decrease of 27.72% over 2014 figure of 241,235 carats. In 2015, a total of 1,014,605 metric tonnes of bauxite was produced compared to 798,114 metric tonnes in 2014. This represents an increase of 216,491 metric tonnes (27.13%) over the previous year. Manganese production also increased marginally by 2.01%, from 1,531,394 metric tonnes in 2014 to 1,562,769 metric tonnes in 2015.

Investment Inflow into the Mining Sector

Total Direct Investment into the mining sector in 2015 amounted to US$965 million. Out of this, US$862 million (89.33%) went into mining; US$84 million (8.70%) was spent on exploration projects, whilst US$19 million (1.97%) was spent by Mine Support Services Companies.

Table below shows investment inflow by type of activity from 2000 to 2015.

 

Year	Producing Mining (US$m)	Exploration (US$m)	Mine Support Service (US$m)	TOTAL
2011	703.80	242.00	24.50	970.30
2012	1,170.90	246.20	26.90	1,444.00
2013	896.70	235.10	22.30	1,154.10
2014	796.00	135.00	19.40	950.40
2015	862.00	84.00	19.00	965.00

 

The figures above shows a considerable dip in investments into the mining sector, especially in exploration and production operations. The major reason was the declining gold price. Among companies that invested significant amounts in the Ghanaian mining sector were Newmont Ghana Gold Limited, Adamus Resources Limited, GoldFields Ghana Ltd, Chirano Gold Mines Ltd and Perseus Mining Company.

Employment

There was a marginal decrease in the mine labour, from 21,922 in 2014 to 19,956 employees in 2015.  This is as a result of the decline in gold price on the global commodities market. This is expected to dwindle further in 2016 unless the metal price goes up. It is noteworthy that, out of the total mine labour of 19,956 employees in 2015, expatriates represented 1.5% (291) compared to 1.6% (342) of a total mine labour of 21,922 in 2014. 

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