Supply-chain area claims 70% of mining expenditure in Ghana – Dr Aubynn
The supply-chain area in the mining sector receives more than half of the expenditure made in that sector, according to the Ghana Chamber of Mines.
Mining experts believe that an enhanced supply-chain area will boost local content if indigenes take full advantage of it.
Making a presentation at Newmont’s third annual Africa Supplier Summit in Accra, Chief Executive Officer of the Chamber, Dr Toni Aubynn said about 70% of mining expenditure goes into the supply-chain area, the Ghana News Agency reported.
“…about 70% of mining expenditure goes into the supply-chain area, hence the need to support the growth of local businesses to increase the provision of basic materials to mining companies,” Dr Aubynn was quoted as saying.
According to him, the country needs to develop a national vision on local content in the mining industry, if “we want to derive full benefit from mining”.
The GNA report also cited Mr George Brakoh, Regional Manager Local Contractor and Supplier Development at Newmont Ghana indicating that the miner is playing a key role within the industry to develop and execute a long-term sustainable policy for the development of local suppliers and contractors, and increase the country’s manufacturing base.
A study published by the World Bank in February 2012, called for increased local procurement in the sector to promote economic growth.
The study titled, “Increasing Local Procurement by the Mining Industry in West Africa”, says mining companies can boost economic growth in West Africa by purchasing more equipment, supplies and services from local companies.
It showed that raising the share of local procurement by mining companies would spread the benefits of mining more evenly across a country’s economy, creating jobs and stimulating the sustainable development of local enterprises.
The study focused on Ghana, Guinea and Senegal, and recommends that West African governments should work with mining companies, suppliers, and civil society to strengthen definitions and indicators for measuring local procurement, as well as urging mining companies to develop and implement local procurement plans.
Even though mining has been going on in Africa for over a century, African countries do not seem to benefit very much from the sector. Foreign mining companies operating on the continent are reported to make huge profits from their operations.
For instance in the first six months of 2009 gold mining companies in Ghana repatriated a total of $469.64 million from the country and the top 40 mining companies operating in Africa reportedly made net profits of about $110 billion in 2010 alone. And these companies have a net asset base which exceeds $1 trillion.
Commenting on the report, Obiageli K. Ezekwesili, the World Bank’s Vice President for the Africa region, said, buying local goods and services is a catalyst for private sector development and sustainable growth, adding that, a key message of this study is that mining companies need to be transparent about informing local communities on procurement opportunities, so that these communities can benefit economically from mining operations.
“Mining companies should not only extract wealth, they must inject opportunity,” she said.
The study indicated that West Africa supplies about 9% of the world’s bauxite, and 8% of its gold. This contribution, it says is expected to grow, with large gold, iron ore, and bauxite projects in advanced planning stages, along with unexploited uranium, copper and diamond deposits across the region.
By Ekow Quandzie