Ahafo locals gear up for business opportunities from Newmont’s next mine
Newmont Mining and Ghana are on the brink of reaping huge rewards from the forthcoming development of a new gold mine at Ahafo North which is expected to produce between 350,000 and 375,000 ounces of gold each year over its projected 13-year mine life.
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The mining giant is expected to start production from mid-2025 to pour the first gold.
But the immediate – and biggest – beneficiaries will be the local communities in the area where the mine is located.
Newmont is already the biggest gold mining company in Ghana, where its two mines currently operating in Ahafo South and Akyem respectively - cumulatively deliver close to one million ounces a year.
Ghana’s economy itself is enjoying a surge in global gold prices to record highs of close to $2,000 per ounce, regardless of the global economic uncertainties.
The gold price surge is not only attracting lots of new investment into formal large scale gold mining but is also encouraging the resumption of production in relatively high cost mines that had hitherto been shut down because they were not financially viable.
For the local communities in Ahafo North, Newmont’s forthcoming new mine will be a game changer, a situation made possible by the fact that over the past nearly two decades they have looked on enviously as their neighbours to the immediate south have benefitted far more than they have from the company’s oldest flagship Ahafo South mine which currently produces about 600,000 ounces a year, and whose operating life span has been extended further with the commencement of underground mining at its Subika pit.
Now, however, the local communities in Ahafo North are realising how the benefits will be like even before the actual mine construction begins.
While civil society tends to assess the social responsibility of mining companies by their CSR expenditure, Newmont is looking to widen the scope by focusing more than any other mining firm in Ghana has ever done before on sustainable economic empowerment.
This primarily involves preparing locals for both employment at the mine during both the construction and actual mining phases, and for exploiting unfolding business opportunities as contractors and suppliers.
Contractors, suppliers
But the company, acutely aware that not everyone can be employed at the forthcoming mine or can be a supplier or contractor is also supporting initiatives that will enable locals to earn their living from other activities, particularly agriculture which traditionally has been the predominant field of economic activity in the area.
The Ahafo North mine will create 1,800 jobs during the construction phase although many of these will inevitably be temporary.
But even when completed and in actual production, there will still be some 550 jobs which would have been provided.
Newmont has already entered a formal agreement which stipulates that this year, as mine construction commences, 40 per cent of all the vacancies created will be filled by indigenes of the host communities, with this proportion rising to 53 per cent within the next five years.
Importantly, Newmont aims to live up to its claim that diversity is one of its core corporate values – the company aims to ensure that 50 per cent of those jobs go to women.
Mining is not just a highly technical industry; Newmont as the industry leader insists on the highest standards.
Furthermore, lacking any glamour, the mining industry is heavily male dominated.
This will present formidable challenges with regard to meeting those targets since the host communities lack skilled labour, particularly technically prepared women.
Consequently, a key component of Newmont’s preparedness effort towards developing its Ahafo North mine is its construction worker training programme (CWTP).
Training in batches
This is a three-month programme established by Newmont to train, in batches, 168 artisans from the host communities in welding, fabrication, scaffolding, steel bending, carpentry, masonry, equipment operation and crane operation as well as offering temporary job opportunities through its contractors during the construction of the mine.
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All 168 trainees are locals from the ten communities that host the forthcominging Ahafo North mine and the Ahafo South mine which has been producing for nearly two decades.
So far, 72 trainees have completed their three-month training in welding and fabrication, scaffolding and steel bending with international, national and local training institutions.
Importantly, the training will make them employable by other extractive industry companies after the construction work at Ahafo North has been completed
Speaking at the graduation ceremony, Andries Havenger, the Project Director for the forthcoming new mine, affirmed that the training programme was established to “enhance their capacity to meet required standards and approved certifications required for delivering work for Newmont and future work opportunities within the wider extractives industry.”
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The remaining 96 trainees will be trained in four batches of 24 each.
Training has commenced for 48 of them in carpentry and masonry, while preparations are underway for training to commence in equipment and crane operation later this year.
Communities from Ahafo North are getting 92 slots under the initiative while Ahafo South’s communities are getting the other 76.
The aim is for women to get half of the slots available.
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Opportunities
There will be lots of business opportunities on offer to local enterprises as well.
Importantly Newmont has reserved a certain proportion for enterprises which it calls local-local, meaning businesses owned by indigenes of the 10 host communities where its two Ahafo mines are located.
Specific proportions have also been reserved for businesses designated simply as local – which means enterprises owned by people from that part of the country but not necessarily the 10 host communities in Ahafo itself.
Not only has Newmont ringed fenced packages (goods and services) for local-local businesses; it is offering them capacity building opportunities to enable them to qualify as contractors and suppliers in the first place under the company’s strict quality standards as well as for business continuity.
This is being done under a structured enhanced local Procurement Programme (ELPP). Here, Newmont is enthusiastic that its local sourcing will create even more employment opportunities indirectly provided through its contractors and suppliers.
Local-local cliché
To this end, Newmont has a register of local businesses (broken down into local-local and simply local sub -categories) eligible for contracts and this register is being regularly updated as more qualified businesses sign up.
Newmont Ahafo’s manager for external and community relations explains that the company is teaching local enterprises about the company’s procurement processes and requirements.
He said in 2023 alone, local-local enterprises will be presented with business opportunities worth some Ghc3 billion.
This is expected to grow further next year as construction of the mine accelerates.
One major opportunity reserved for local-local enterprises is the building of 250 houses for the resettlement of the households which need to be moved out of the mining area to enable the construction of the Ahafo North mine.
The supply of construction materials for the mine itself will also offer substantial opportunities for local enterprises.
Newmont executives claim they want to leave their host communities wealthy when the mine’s life expires, expectedly around 2038.