Mining in
Sector Focus
T: +44 20 8204 4962 | F: +44 20 8206 2860 | E: info@platinumintegrations.com | W: www.platinumintegrations.com | 16 Freetrade House, Lowther Road, Stanmore, Middlesex HA7 1EP
Companies based in Ghana also have high expectations for their gold production. The Newmont Mining Corporation anticipates an increase in gold production by 2014 to 1.2 million ounces. While certain regions in the country, such as the Brong Anato region, look forward to increasing gold production by 1.7 million ounces by 2017. Limestone is also a fast growing export for Ghana as it has multiple uses such as being used to manufacture clinker for cement. Hydrated lime is also used in gold mines and its estimated that gold mines consume approximately 60 000 million tonnes of limestone.
T: +44 20 8204 4962 | F: +44 20 8206 2860 | E: info@platinumintegrations.com | W: www.platinumintegrations.com | 16 Freetrade House, Lowther Road, Stanmore, Middlesex HA7 1EP
Despite having a variety of minerals available to investors, Ghanas biggest mineral export is gold. Gold production grew from 63 tons in 2004 to 80.5 tons in 2008. In 2011, gold contributed to 44% of the total export earnings and 5.5% of Ghanas GDP. The Chamber of Mines in Ghana expects a further rise in gold production in 2012.
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T: +44 20 8204 4962 | F: +44 20 8206 2860 | E: info@platinumintegrations.com | W: www.platinumintegrations.com | 16 Freetrade House, Lowther Road, Stanmore, Middlesex HA7 1EP
benefiting from well developed infrastructure such as roads, airports and sea ports. The government has made its priority to encourage and foster foreign and local investments, so much so that the Ghanaian constitution protects investments from expropriation. The demand for the mining sector has increased as investment inflows in 2010 increased to $770 million while export revenues in the mining sector reached $5 billion in 2011. Money to invest in new projects has also increased as the Ghana Stock Exchange has shares that have been oversubscribed by 100-300%. Ghana has several regulatory bodies and programmes that support Ghanas mining sector. These include the Mining for Development Forum, Double Taxation Agreements and Ghanas Economic Recovery Programme. Ghanas Mining for Development Forum was established in 2012 and was created by the Ghanaian government in order to help solve challenges in the industry as well as discuss how mining can be a catalyst for economic growth and development. This
forum will gather quarterly to assess and analyse the sector, but more importantly opens communication channels for stakeholders, media and the public to discuss the mining industry as well as interact with leaders in this sector. Investors can also benefit from Ghanas Double Taxation Agreements (DTA). Ghana signed the DTA with countries such as the UK, France, Belgium, Italy, South Africa, Germany and Switzerland. Investors from these countries save money as they dont pay taxes in both their country and Ghana, therefore double taxation is avoided while investments in Ghana are encouraged. Ghanas Economic Recovery Programme (ERP) is also beneficial to stakeholders. The ERP was created in 1983 and introduced macroeconomic policies which further attracted investors. It led to the establishment of the Minerals and Mining Law in 1986 and the Minerals Commission which regulated and liberalised the mining sector. As a result of the latter, many companies are interested in investing in Ghana and the country was voted as one of the top emerging markets for mining.
Ghana is also a signatory of the World Banks Multilateral Investment Guarantee Agency (MIGA) convention and creates a safer environment for investors by insuring them against non-commercial risks.
Platinum Integrations
Platinum Integrations Ltd (Pi) is a one stop international consulting firm that assists companies wishing to do business in Africa. We provide International (or aspiring International) companies with assistance in trading with Africa. To discuss your companys strategy for entering or expanding in Africa please call +44 208 204 4962 or see our website at www. platinumintegrations.com.
Possible Risks
The mining sector has not become a dominant one in Ghanas economy and the industry has been growing slowly. The government is addressing this problem by creating bodies such as the Mining in Development Forum. Corruption could become an issue in the future despite institutions being established to prevent corruption such as the Serious Fraud Office and the Public Procurement Authority. There has been a lot of criticism that the judicial system isnt independent and can be influenced by political officials.
T: +44 20 8204 4962 | F: +44 20 8206 2860 | E: info@platinumintegrations.com | W: www.platinumintegrations.com | 16 Freetrade House, Lowther Road, Stanmore, Middlesex HA7 1EP
Ghana also has many resources available and investors can benefit from the skilled and unskilled labour force in Ghana which are both affordable. Investors can also acquire land easily as long as it is done through credible agencies and agents.
Conclusion
The huge potential of Ghanas mining sector has not gone unnoticed as there are multiple actors interested in this sector such as NGOs, international companies and traditional authorities. Due to its stable business environment and rich resources, its no wonder Ghana was ranked as the 8th most favourable country to do business in.
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