OBG talks to Nii Osah Mills, Minister of Lands and Natural Resources

Interview: Nii Osah Mills

What can be done to mitigate the effects of the ongoing retrenchment in the industry?

NII OSAH MILLS: The socio-economic impacts of these lay-offs, in the context of a pre-existing high unemployment levels, are dire, potentially leading to an increase in crime, other social vices or unrest. Other potential impacts include an increase in illegal mining activities and the concomitant negative environmental consequences as well as possible migration out of mining areas to urban centres. The most reliable long-term solution is to diversify the mineral resources exploited, as well as the broader economy. This would reduce the country’s vulnerability to shocks from international markets.

By maximising linkages – backward, forward and horizontal – and generating multiplier effects in the extractive value chain, Ghana can develop further significant socio-economic activities related to mining. Over time, these economic activities could actually take over as key sectors, either during rough patches or when the mines are exhausted. We have seen countries like Canada, Australia and the Scandinavian countries promote the development of these linkages, bringing about a range of alternative activities that continued to bloom even after mining ends. Also, the development of alternative livelihood programmes in mining communities has the potential of not only absorbing excess and retrenched labour, but also mitigating the development of ghost towns after cessation of mining.

Corporate social responsibility projects have also supported local economies through the downturn. However, the ministry is coordinating a collaborative approach among stakeholders to achieve as close to a win-win situation as possible, given the circumstances.

What must be done to ensure the government continues to make gains against illegal mining?

MILLS: The decline in gold has led to some lay-offs in the mainstream sector, and some of these miners are now looking for new jobs. There is evidence that some of these retrenched workers are applying for small-scale mining licenses, to mine legally. It is also conceivable, though, that some of the laid-off workers have migrated into illegal mining. The government’s operations are supported by the National Security Sub-committee on Illegal Mining. Under the direction of the Inspectorate Division of the Minerals Commission, the ministry has formed regional task forces in the Eastern, Western, Central, Greater Accra and Ashanti Regions.

Additional interventions include district mining committees and artisanal and small scale mining (ASM) associations; education and training; logistical support for ASM; capacity building for the Minerals Commission to monitor ASM activities; collaboration with security agencies on illegal mining; and the development of environmental management guidelines for ASM in conjunction with the Environmental Protection Agency.

How can Ghana’s mineral operations be diversified?

MILLS: The minerals currently being produced on a large scale are gold, diamond, manganese and bauxite. The government has promoted diversification into bauxite and iron ore, and investors are exploring these minerals. Other minerals, like limestone and solar salt, are also being given more serious attention. Two large-scale limestone producing firms – Savanna Cement Ghana, in Buipe, and Earth Worx Construction Ghana, in Nauli – are at the development stage, while significant funds are being mobilised for the salt industry by investors. In West Africa, only Ghana and Senegal possess favourable climatic conditions for commercial salt production. With production at 600,000 tonnes per year and consumption in ECOWAS estimated at 4.5m tonnes per year, there is a huge deficit currently being served by imports from Brazil, Australia, Namibia and Europe.

Projects executed under the Mining Sector Support programme, funded by the European Commission, have led to the discovery of the occurrence of minerals not previously known to exist in Ghana, including base metals, phosphate, nickel, chromium and uranium. These discoveries create new opportunities for the sector.