The Mining Sector in Ghana's Economic Recovery Programme
Kwame Poku
On Wednesday February 5, 1986, Ghana's Secretary responsible for the mining industry gave a press conference at which he talked extensively about the mining sector of the economy. Kwame Poku reports.The Secretary for the Ministry of Lands & Natural Resources, Mr Kwesi Renner, took his turn on the ministerial rota to 'meet the press' on February 5, 1986.
He recounted the systematic decline of output from the mining industry 1982 and 1983 and stated that gold production had declined at an average annual rate of 8% from 500,000 fine ounces in 1972 to 232,000 f.oz in 1982. Bauxite production has fallen at an annual rate of 15% from about 474,000 metric tonnes in 1974 to 64,000 metric tonnes in 1982. Manganese production was about 540,000 metric tonnes in 1972 dropping to about 160,000 metric tonnes in 1982. 2.34 million carats of diamonds were mined in 1975, falling drastically to 675,000 carats by 1982.
The Secretary attributed these to a number of factors including inadequate investments in the industry to take care of rehabilitation and exploration, shortage of skilled labour, relatively low ore deposits and other factors. He stated that the 1982-1985 programme was targeted to halt the decline and even here, the sector was not able to fulfill its targets due to enor- mous constraints including delays in the 1983 import programme and the Ministry's inability to conclude invest- ment agreements.
'Modest growths were recorded though' emphasised the secretary. In gold production, 285,000 f-oz were recorded in 1984 showing a 2% increase on 1983 which de- creased slightly to 224,000 f-oz by September 1985. Manganese showed a 14% increase in 1984 and a further 6% increase in 1985 to 258,000 metric tonnes. For diamonds, 1984 registered an 8.1% increase which jumped to 496,000 carats in 1985. Output of bauxite fell considerably due to, according to the Secretary, "a real railway freight problem".
The Secretary attributed these to a number of factors including inadequate investments in the industry to take care of rehabilitation and exploration, shortage of skilled labour, relatively low ore deposits and other factors. He stated that the 1982-1985 programme was targeted to halt the decline.
For the 1986-1988 programme, the secretary stated that a number of concrete steps are earmarked for the sector which will consolidate efforts at rehabilitation and expansion in all the mines, intensifi- cation of exploration and prospecting, organisation of management and training programmes, etc. etc. Mr Renner was optimistic that international assistance will be forthcoming this time round as a total of $300 million will be required during the period to revamp the whole mining sector.
The Ashanti Goldfields Corporation will require $156 million to implement an expansion programme to increase gold output from around 200,000 f-oz to 340,000 f-oz by 1988 and to 400,000 f-oz by the 1990's. Of this requirement, the International Finance Corporation has approved a $55 million for shaft sinking operations while extra finance is being sought to meet the balance.
On the State Gold Mining Corporation (SGMC), which has been wholly state- owned, the secretary intimated that the SGMC will be assisted to undertake a $67 million rehabilitation programme. He also made mention of the management agreement with a Canadian Mining group. Under this agreement which was initiated last year, a Ghana-Canada Mining Group has been established to re- organise to take full management control of the Tarkwa, Prestea and Dunkwa Mines under the terms of a $30 million agreement between the SGMC and the Canadian Group, which is being financed by an IDA loan payable in 50 years with a 10 year grace period.
The Secretary did not elaborate on the expected turnover from this rehabilitation exercise for the SGMC but it does perpetuate the practice of leaving our mining sector in the management hands of foreign expertise.
For Manganese, the Secretary mentioned briefly that plans are being worked out' for the development of under- ground operations to mine and treat the remaining reserves of carbonate deposits at Nsuta. Bauxite, it was emphasised, depends on the integrity of the Ghana Railways Corporation for survival and that major rehabilitation works at the mine and collaborative ventures with the Railways will be stepped up in the coming years so as to be able to reach a target of 200,000 tonnes per year by 1988. For Diamonds, the Secretary said an $18 million programme of exploration and excavation including the installation of a 10km conveyor belt system will be put into effect.
Last year saw major movements in the diamond mining sector. The Ministry commissioned the C500 million Birim River Diamond Project which is going to shift the area of active mining from Akwatia to Akyem Takorawasi near Oda and enable the continuation of mining activities in the area for at least another fifteen years. This was the culmination of prospecting activities in the Birim river Valley which started in 1983 with a $2.3 million assistance for the United Nations Development Programme and expected to yield around 15 million carats over the period. The government also approved, through the Ghana Diamond Marketing Corporation, an agreement with a London-based gems firm, Scotia Diamond Company to undertake polishing and refining of rough stones from Ghana.
He was keen to encourage an 'integrated' mining industry which will also see major governmental action on the Tarkwa Gold Refinery, the Kibi Bauxite Deposit programme.
The interest in Gold mining, mainly of the alluvial type by private investors is coming up gradually. New prospecting licences have been issued for exploration works in the Awaham, Akanteng and Nyafomang in the Birim and Pra river valley respectively. An abandoned gold mine in the Lake Busumtwi basin near Bekwai, at Obuom in Ashanti has been licensed for reactivation and the Asantehene, Otumfuo Opoku Ware is re- ported to have cut the sod for works to begin. The venture is being jointly operated by a Ghanaian company P G Donkor Agencies Inc. in conjunction with a French Geological company. BRGM of Paris, with a joint initial capital of FF40 million.
A Ghanaian-German prospecting Team published their geological survey results last year which established that a gold reef deposit of potential mineral boom' has been uncovered at Kyekyerewere in the western Region which if actively developed might yield close to 7.2 million f-oz per year.
In concluding his press conference on the mining sector, Mr Renner expressed the hope that if these action programmes are successfully carried through, the export earning of the sector is expected to reach $150.3 million in 1986 increasing to $173 million in 1987 and $195 million in 1988.
He was keen to encourage an inte- grated' mining industry which will also see major governmental action on the Tarkwa Gold Refinery, the Kibi Bauxite Deposit programme and the Oppong Mansie iron and steel project. He added that we shall, to see our way through all these, continue to rely on bilateral and external financing, but in the long terms, it is the area which will create jobs for the future.
