Ghana’s mining sector performed well as the output and receipts rose on most minerals mined in the country. The sector also employed 1,790 additional people in 2019, increasing the total workforce engaged directly by mining companies to 11,899 from 10,109 in 2018.
In the 2019 Annual report of the Chamber of Mines which was released on, Friday, 29 May 2020, the President of the Chamber, Eric Asubonteng, said the 18% growth in employment was primarily due to additional recruitments at Newmont’s Ahafo Mine, Asanko Gold Ghana Ltd, Golden Star Wassa Ltd and the redeveloped AngloGold Ashanti Obuasi Mine.
He noted that out of the total number of direct mine employees, only 1.2% are expatriates while the overwhelming majority remain Ghanaian nationals.
“Let me state emphatically that gone are the days when expatriates occupied all the key management roles on mine sites. Today, highly skilled Ghanaian mining professionals are occupying key positions at all levels of our industry, much to the satisfaction of our now actively discerning investors and stakeholders.”
“Interestingly, Ghanaian mining professionals are in high demand on the global market, as many of our colleagues have taken up management roles as expatriates, in both developed and emerging mining destinations across the globe,” he added.
Mr Asubonteng also noted that although the Chamber is proud of the increased indirect jobs, it is important to recognise that direct jobs created by large-scale mining are but a fraction of the multiplier effect of mining operations on employment.
The value chain of mining, according to him, creates a huge pool of opportunities that ensure that support service providers such as input suppliers, food producers and vendors as well as social entrepreneurs are able to take advantage of the inherent opportunities to generate sustainable employment.
He, therefore, touched on the importance of focusing on a well-structured small-scale mining sector for more job creation.
“We are all aware that thousands of our brothers and sisters are engaged in illegal mining financed by persons who are able to afford heavy machinery that are posing a major risk to our environment. If properly structured, small-scale mining could create many more decent jobs for the teeming youth of our dear nation, who would have the added benefits of pension contribution and plan for their future. It also has the potential to open up a pool of revenue generation streams for the state, if modelled in a worker-friendly manner,” Mr Asubonteng emphasised.
The country’s gold output rose 6% in 2019
Gold output for Ghana in 2019 surged to 2.989 million ounces compared to the 2.807 million ounces that were produced in 2018.
However, gold analysed by the Precious Minerals Marketing Company, PMMC, on behalf of Licensed Gold Exporting Companies, which represents small-scale production, decreased from 1.984 million ounces in 2018 to 1.588 million ounces in 2019.
This 20% decrease in the small-scale mining sub-sector resulted in a decline in total gold production from 4.792 million ounces in 2018 to 4.577 million ounces in 2019.
Consequently, the large-scale sector improved on its contribution to national gold production, from 59% in 2018 to 65% in 2019 whereas the small-scale sector accounted for 35% of national gold production in 2019; a decline from 41% in 2018.
Meanwhile, the bulk minerals sector, manganese and bauxite, recorded 18% and 10% improvements in output respectively.
The shipment of manganese by the country’s sole producer, Ghana Manganese Company, increased from 4.551 million tonnes in 2018 to 5.383 million tonnes in 2019 as a result of the company’s business model which is designed to increase production to meet global demand for its product.
Similarly, Ghana Bauxite Company recovered from the previous year’s slump in production to record year-on-year growth. Improvements in operational activities of the company resulted in an increase in shipments from 1.011 million tonnes in 2018 to 1.116 million tonnes in 2019.
The purchases of diamonds by PMMC, however, fell from 0.057 million carats in 2018 to 0.033 million carats in 2019 due to a 41% fall in production.
“The persistent decline in purchases of diamonds largely reflects low recoveries from small-scale winners and the continued shut down of the only large-scale producer of diamonds in Ghana,” Eric Asubonteng disclosed.
Domestic receipts of mining and quarrying sector rose in 2019
The Chamber of Mines also revealed in its Annual report that the mining sector’s total fiscal contribution, at 7.7% of domestic revenue in 2019, was the second-highest after the financial and insurance sectors.
This notwithstanding, the share of the mining and quarrying sector in total direct domestic receipts mobilised by the Ghana Revenue Authority, GRA, improved by 70% from GHS2.36 billion in 2018 to GHS4.02 billion in 2019.
“This growth was occasioned by the simultaneous increase in production and price of some minerals, particularly, gold,” the President of the Chamber said.
Likewise, the expiration of the Stability Agreements between the Government of Ghana and some mining companies further resulted in changes that boosted revenue for the State. Specifically, corporate tax receipts from the sector realised an 89% increase to GHS2.27 billion in 2019 from the previous GHS1.20 billion in 2018.
Moreover, the income tax (Pay As You Earn) receipts of mining sector employees rose from GHS 457.16 million in 2018 to GHS 736.26 in 2019, representing a growth rate of 61.1%. Also, mineral royalty payments increased from GHS 705.26 million in 2018 to GHS 1.01 billion in 2019 representing a 42.7% increase while other taxes stood at GHS 0.67 million in the same period.
In terms of total government revenue, the mining and quarrying sector’s contributions increased from 4.9% in 2018 to 7.6% in 2019.
Mr Asubonteng stated that “data from the Bank of Ghana shows that the increase in receipts from minerals expanded the sector’s share in gross merchandise export receipts from 39% in 2018 to 43% in 2019, consolidating the mining sector’s status as the leading source of foreign exchange from export earnings.”
“In fact, the mining sector comes into its own, when you add the equivalent contribution of crude oil and cocoa, which stood at 29% and 15% respectively in the same period. It is equally vital to note that out of their realized mineral export revenue of US$ 4.5 billion in 2019, the producing member companies of the Chamber returned US$ 3.3 billion to the country, representing 73% of export proceeds. As has always been the case, the mineral revenue was returned through the various commercial banks; a critical factor in stabilising Ghana’s currency and fiscal outlook.”