Mining sector needs support to deliver more
Experts in the extractive industry have converged on Cape Town, South Africa, for the largest global gathering on mining.
The four-day conference on African mining, dubbed “African Mining Indaba”, featured an array of speakers and participants, including three Heads of State and a Prime Minister.
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The 2022 Investing in African Mining Indaba, which ends today, is the largest mining dialogue platform in Africa and the largest mining investment conference and exhibition in the world.
This Mining Indaba is taking place at a time the world is recovering from the effects of the COVID-19 pandemic.
It is important to note that almost every industry is having to adapt to new circumstances and confront new challenges and be prepared to seize new opportunities; the mining industry in Africa is no different.
As it responds to the effects of the pandemic, the mining industry also needs to manage the risks and potential benefits of rapid technological change, shifting market demand, climate change and geo-political uncertainties.
After more than 65 years of independence, mining remains a critical pillar of the country’s economy. It is a significant contributor to export earnings and an important source of foreign direct investment, which directly employs several hundreds of people.
It is important to note that the revenues from mining increased from $4.572 billion in 2019 to $5.140 billion in 2020, the year COVID-19 struck.
The 12.4 per cent upturn in mineral receipts was due to the record level of gold price which subdued the impact of the downturn in production.
Indeed, the 27 per cent year-on-year growth in gold price offset the 4.7 per cent decline in production to occasion an expansion in receipts from $4.156 billion in 2019 to US$4.999 billion in 2020.
As mining remains one of the mainstays of the country’s economy, we must take steps to improve the functioning of our railways and ports, and more importantly, ensure a secure and reliable supply of affordable electricity. These tasks are at the forefront of our economic reconstruction and recovery efforts.
The Western railway line, which is the primary mode of hauling bulk minerals to the Takoradi Port, has deteriorated over the years as a result of obsolescence and limited investments.
Consequently, the bulk mining companies have had to make use of the more expensive road system. This for us, makes mining more burdensome.
We, therefore, urge the government to expedite action on the development of an effective rail network system since mining has the inherent potential to generate revenue to pay back the initial investment cost.
The Daily Graphic, therefore, calls on the government to give exploration companies some incentives to spur growth in the mining sector since exploration is the single most critical activity that guarantees continuous production of mineral resources to supplement production from existing mines or replace output of mines whose economic ore body is exhausted.
For us, the country stands to benefit if the hurdles of exploration in terms of upfront costs are reduced to facilitate effective exploration and consequent commercial finds.
As a first step, we request the government to exempt exploration companies from the payment of VAT on big ticket cost items such as drilling and laboratory services.
