Reporting on Ghana’s mining sector - what Matters
The story of mining can sometimes be told in distorted forms; emotionally hyped narratives sometimes project images of rabid environmental harm and pollution; local people protesting activities of mining companies, particularly illegal miners, receive generously distorted and sometimes overly exaggerated media coverage.
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Ghana’s mining industry tends to get lots of media coverage and rightly so. Mining is Ghana’s biggest export earner, biggest sub-sectoral contributor to government revenues and to Gross Domestic Product itself.
Coverage of the mining sector ranges from the activities of illegal small-scale miners, popularly known as ‘galamsey’, to the operations of the biggest gold mining corporations operating in the country such as AngloGold Ashanti, Goldfields and Newmont.
The focus of media coverage is clearly on gold mining. This is understandable. Gold mining is obviously by far the most visible type of mining in Ghana and more importantly, accounts for over 90 per cent of the country’s mining revenues. The other key aspect of media coverage of Ghana’s mining industry is its emphasis on the social and environmental aspects and impacts of activities in the sector.
Most of the coverage is either about the environmental impact of mining, especially alleged infractions on the part of mining enterprises, or about mining companies, corporate social responsibility (CSR) or the lack of it. Such emphasis naturally makes the issue of galamsey mining, particularly attractive to journalists, because it has serious adverse effects on the environment and also a major impact on the social structures of the communities where it is carried out.
It also attracts extensive coverage of the CSR activities of the big, formal sector mining companies within the context of complaints of their host communities about socio-economic services and infrastructural neglect and the allegations of civil society about the negative efforts of mining operations on their local environments, especially with regard to economic dislocation and physical pollution.
The shortcomings
The aforementioned issues focused on by the Ghanaian media are certainly important ones. The environmental and social impacts of mining affect the lives of the host communities and help to define just how responsible mining enterprises are. Ultimately, whatever we do should be about improving lives and the media’s coverage of environmental and social impacts of mining strives to do just this.
Unfortunately though, it tends to address one part of a much bigger picture and even the part it does cover is often presented in a somewhat distorted fashion, albeit usually through no fault of the journalists themselves.
The distortions, or should we more charitably say inaccuracies, tend to relate to the level of environmental infractions, the amount of socio-economic neglect of the host communities by mining firms and the culpability of those mining firms for all this.
Simply put, environmental infractions and social neglect are often exaggerated, even though they are also often true. The term, I believe, is crying wolf, and this is the result of vested interests trying to attract attention. In some cases, those visited interest are members of host communities seeking sympathy from government and the general public which they can leverage in their interactions with the mining companies to get better deals with regard to jobs, compensation, social services and infrastructure.
In other cases, this is the result of the activities of civil society activities such as non-governmental organisations (NGOs) who are seeking publicity and relevance in order to attract funding for their activities and by extension for the livelihoods of their members.
Either way, journalists are sometimes inadvertently sucked into supporting the cause of complaints, and sometimes they support such causes simply because of financial rewards.
It must be emphasised here that these inaccuracies are in part, however, just because of the strong focus on social and environmental impacts to the detriment of micro and macro-economic issues, in the mining industry.
Indeed the lack of media coverage of those issues is the biggest shortcoming of all in our coverage. Stories about the contributions or lack of contributions to the natural economy are rare, as are stories about how the industry operators are coping with the need to contain costs and expand production or how the fiscal regime affects their activities.
Issues to cover
There is a saying that goes: “The good of the many should supercede the good of the few.” While this is somewhat simplistic, it is nevertheless fundamentally true, at least in an utopian situation. This is why national interest with regard to mining has to be elevated above that of the narrower interests of some members of mining host communities.
Thus, the most important issue for coverage of mining is its contribution to the national economy. This means journalists should seek to do stories on mining company taxation, levies and royalties. It is instructive that over the past couple of years, the government has been trying to significantly tighten the fiscal regime for the mining sector, and the mining industry has been protesting loudly but the foreign press has reported this more intensely than the local press.
Another issue of contribution to the national economy deserving media coverage is the effort, or lack of effort by the mining industry to give its linkages to the rest of the economy and expand it from being an enclave industry. I find it strange that we keep on saying that we are trying to integrate our new oil and gas industry with the rest of the economy because we have learnt from the mining sector’s failure to do so, yet we are still not challenging the mining sector to change its ways the way we are challenging the oil and gas sector. For instance, the media in Ghana is very interested in pursuing local content stories in the oil and gas industry, but rarely pursues local content stories in their coverage of the mining sector.
This shortcoming in local content coverage cuts across both local suppliers and products, and local employment at the highest managerial and technical levels.
Media attention
The next broad issue which currently does not receive media attention but which deserves to is the micro-economics of the mining firms; their cost versus revenue positions. The profitability of mining companies in Ghana is not only the concern of their shareholders. If it was, then only AngloGold Ashanti and Golden Star Resources’ profitability would be of any interest to the public that the Ghanaian media serves.
However, it is the level of profitability that determines how much investment every mining company makes in exploration and expansion of their production capacities. This in turn influences actual production into the future, which in turn affects their production and ultimately our export earnings,
Issues to cover
There is a saying that goes: “The good of the many should supercede the good of the few.” While this is somewhat simplistic, it is nevertheless fundamentally true, at least in an utopian situation. This is why national interest with regard to mining has to be elevated above that of the narrower interests of some members of mining host communities.
Thus, the most important issue for coverage of mining is its contribution to the national economy. This means journalists should seek to do stories on mining company taxation, levies and royalties. It is instructive that over the past couple of years, the government has been trying to significantly tighten the fiscal regime for the mining sector, and the mining industry has been protesting loudly but the foreign press has reported this more intensely than the local press.
Another issue of contribution to the national economy deserving media coverage is the effort, or lack of effort by the mining industry to give its linkages to the rest of the economy and expand it from being an enclave industry. I find it strange that we keep on saying that we are trying to integrate our new oil and gas industry with the rest of the economy because we have learnt from the mining sector’s failure to do so, yet we are still not challenging the mining sector to change its ways the way we are challenging the oil and gas sector. For instance, the media in Ghana is very interested in pursuing local content stories in the oil and gas industry, but rarely pursues local content stories in their coverage of the mining sector.
This shortcoming in local content coverage cuts across both local suppliers and products, and local employment at the highest managerial and technical levels.
Media attention
The next broad issue which currently does not receive media attention but which deserves to is the micro-economics of the mining firms; their cost versus revenue positions. The profitability of mining companies in Ghana is not only the concern of their shareholders. If it was, then only AngloGold Ashanti and Golden Star Resources’ profitability would be of any interest to the public that the Ghanaian media serves.
However, it is the level of profitability that determines how much investment every mining company makes in exploration and expansion of their production capacities. This in turn influences actual production into the future, which in turn affects their production and ultimately our export earnings, which determine our external financial position, our ability to finance imports, our foreign credit-worthiness and crucially, the value of the cedi against other major international trading currencies through the exchange rate of the cedi against the US dollar.
Fiscal regime
Here again, this is currently a very topical issue. Government is tightening the fiscal regime for Ghana’s mining industry largely because it believes the industry is enjoying windfall profits because of the high gold price. The mining companies, however, argue that they are not trying to distinguish between their direct productions costs, known as cash cost per ounce of gold, and their overall operating costs, including exploration and business expansion costs, known as notional cash expenditure. So far, the Ghanaian media has failed to focus on examining the financial arguments presented by each side.
All of this is important because the media needs to play its part in establishing the right balance between the state getting the best sustainable terms from the mining companies and those companies being satisfied enough to keep producing at full capacity and investing new money in discovering more gold and expanding their production levels.
Operational life span
It must be understood that while the issue of CSR, the current focus of media spotlight on the mining industry, is very important, it would sooner or later become moot if mining companies decide that Ghana is no longer a competitive investment destination and choose to start winding down their operations rather than put more money into extending the operational life spans of their existing mines and establishing new ones.
These, though, should be additions to the media’s coverage of Ghana mining industry, not a replacement for CSR and environmental issues, which remain as pertinent as ever. However, journalists need to be more circumspect in the coverage of those two issues. The key is to get both sides of every story – the complaints and the mining companies.
In the case of environmental issues, the Environmental Protection Agency’s own position should be sought.
One important aspect of social impact that is not being covered intensely enough by the media is what government and the traditional authorities in mining communities are doing for those communities. It should be remembered that government has an obligation to provide those communities with socio-economic services and infrastructure; the mining companies, although expected to do same as good business practice, do not have the same obligation because CSR is voluntary. The mining companies have complained that both government and the traditional authorities divert monies away from host communities which should have been for the good of their larger populace. The media needs to follow this issue and keep everyone on their toes.