Chamber worried over cost of mining

THE Ghana Chamber of Mines (GCM) has expressed worry over the rising cost of mining in the country as it impacts negatively on the individual margins of the mining companies.

The chamber hopes that laudable economic policies will be implemented by the government in the wake of the oil production “to properly integrate the gas into other resources for industries to use.”

The Chief Executive Officer (CEO) of the chamber, Dr Toni Aubynn, who expressed the chamber’s worries to the Daily Graphic in an interview, said “mining companies in Ghana incur one of the highest operational costs in the sub-region,” a development he said was discouraging investors from investing in the country’s mining sector.



Dr Toni Aubynn, CEO, GCM



Such costs, he said, ranged from mining companies’ use of utilities, fuel and the provision of social amenities for mining communities to the cost of hiring expatriate labour due to the lack of skilled natives for specific jobs in the sector and the import of equipment and materials for their operations.

“Most of the mining communities don’t have social amenities such as roads, hospitals, schools and so on which forces the mining companies to provide those amenities at their own costs,” the CEO said.

He also explained that the rising cost of materials in the global arena impacted negatively on the local mining industry “because we import most of the equipment and materials that are used in the work. In effect, we import some of the costs although we could have sourced them locally at a much lesser cost if there were local companies supplying them,” he said.

The CEO also lamented the unavailability of specific companies in the country that could produce for the sector to help reduce costs in the sector while earning revenues for themselves and the country at large.

Dr Aubynn has, however, admitted that the establishment of an alternative power generating plant for use by mining institutions has reduced the cost of electricity in the sector but said it could even slow further should the gas generated from the oil drilling be used properly.

Mining companies in the country pay a specially rated price for diesel, far above the government subsidised ex pump price of the product.

On the whole, Dr Aubynn said “the rising cost is not making things easy and that is impacting negatively on revenues generated from the sector.”

He also called on Ghanaians not to look at the mining sector as an industry that should contribute to economic development only through taxes “but should look at how the sector can be properly integrated into the national economy to accelerate development.”

The mining sector alone contributed about 23 per cent to total revenues generated last year and the amount could even rise as global prices of diamond and gold continue to rise.