Thursday, March 8, 2007
A new era of gold in Ghana
· Newmont Ghana Gold
By: CLEMENT ATAGRA
AFTER the investment of almost half a billion dollars by Newmont Mining Corporation, one of the leading gold mining companies in the world, there is now gold production from the Brong Ahafo Region, an area of Ghana with no previous history of large-scale mining.
The first gold pour at the Newmont Ahafo project took place in July 2006 and the official inauguration of the mine by President Kufour was in November 2006. More than half a million ounces a year are expected to be produced from this area for a least twenty years. Newmont has already started paying royalties to the Government of Ghana from its gold exports.
Newmont’s second project in Ghana, in the Akyem project in the Eastern Region, is also in an area where there has been no previous history of large-scale gold mining. That project, while still in the feasibility stage, should be producing gold in a few years time, according to the indications given by Newmont.
Ghana has thus become the newest core operating district for Newmont. Indeed, the company is already embarking on exploration activities in other parts of the country, including the North of Ghana, hoping to find gold there too. Ghana is also the take-off point for other ventures by the company of Africa.
It is of great significance for Ghana, a country well known for centuries for gold, that new, sizeable reserves of gold are being found even in areas with no previous history of such large-scale mining and that a company like Newmont has established operations here.
Obviously, it was for good reason that the country was known for centuries, in colonial times, as the Gold Coast. As the country celebrates 50 years of independence, the major new mines being established by Newmont and the prospect of new gold finds bode well for the future of Ghana. Increasing revenue from gold exports should be a positive contribution to the country’s development.
Newmont obtained two concessions in the Ahafo and Akyem areas of Ghana with its acquisition of another company, Normandy Mining, in 2002. The reserves established at the time for the two areas were four (4) million ounces. Through further exploration, Newmont has increased the reserves in these areas from year to year and now holds about nineteen (19) million ounces of gold reserves in the two concessions.
Proprietary technologies of the company for gold exploration and highly skilled technical expects of the company have been the driving force for the company’s operations in Ghana and have led to these striking increases in reserves over the last five years. Both projects, when fully operational, are expected together to produce a million ounces of gold per annum.
An even more significant aspect of Newmont’s presence in Ghana is the emphasis that the company is placing on social and environmental responsibility. In line with the company’s Social Responsibility Guidelines, Newmont is attaching great’ significance to making a positive contribution to the welfare of communities in the vicinity of its operations in a manner that will outlast the mining projects and has been spending millions of dollars making significant community investments in both Ahafo and Akyem areas. These investments have included support for various educational institutions and activities – for instance, donating computers and accessories and providing building materials and other resources for school renovation projects.
The company is also partnering the Junior Graphic newspaper to educate Ghanaian children about what it takes to develop a gold mine and produce gold, thus stimulating the children’s interest in what has been a significant economic activity in the country and increasing the understanding of the community at large about gold mining.
Support for health projects has also been a key element in Newmont’s social investments in various communities. A community Health and Well Being Initiative (CHEWBI) has bee embarked upon with support from the Colorado University Medical School and involving local health authorities.
A Community Development Foundation has been launched by the Chairman and Chief Executive of Newmont, Mr. Wayne Murdy, to be funded with one per cent of net profit of the company and $1 for every ounce of gold that is mined by the company. Projects in the communities will be undertaken with these funds in consultation with the communities themselves.
Creating jobs and opportunities for business development to local people is to particular concern to Newmont.
From a very early stage in its Ahafo operation locals were encouraged to register to be part of a labour pool from which the company and its contractors obtained labour required for mine construction. Training programmes were organized in collaboration with the manpower pool to develop skills needed for the jobs at hand.
In 2006 the number of local businesses in the seven communities surrounding the Ahafo mine (Ntotroso, Kenyasi I, Kenyasi 2, Hwidiem, Nkasem, Wamahinso and Gyedu) that provide goods and services to the mine has more than tripled to 48 and procurement by Newmont from these businesses was valued at almost US$2,000,000.
The activities of the businesses include carpentry, construction and maintenance services, landscaping, rental services, farm inputs, hardware stores, office materials and hospitality services. Newmont has also recently signed an agreement with the International Finance Corporation (IFC) aimed at supporting the development of local businesses to provide goods of local non-mining businesses to diversify the local economy.
In line with the company’s Social Responsibility Guidelines,
Newmont is attaching great significance to making a positive
contribution to the welfare of communities in the vicinity of its
operations in a manner that will outlast the mining projects….
Capacity development for local businesses through training schemes and long-term business support and other services is also part of the co-operation agreement with the IFC. Special emphasis is given in the cooperation agreement to the development of women entrepreneurs.
During 2006 Newmont entered into a Memorandum of Understanding with the United States Agency for International Development (USAID) and another mining company, Goldfields Ghana Limited to combine efforts to create lasting improvements in the lives of communities in Ghana. The three organizations thus established the Ghana Responsible Mining Alliance and pledges to collaborate on development activities of mutual interest by pooling their financial and technical resources as well as development expertise to create measurable improvements in mining communities in the districts where Newmont and Goldfields are operating.
Newmont is supporting the Ahafo Agribusiness Growth Initiative (AAGI), a community-based agricultural development initiative aimed at stimulating improvement in the livelihood of farmers by providing them training that builds on existing agricultural practices to strengthen productivity and business skills and facilitating access to markets.
AAGI is encouraging the formation of farmer associations to enable access to micro-finance and other assistance and support. Development Alternatives Inc. (DAI), Shore-bank International, two US-based organizations, as well as African Connections, a Ghanaian organization, and various Ghanaian agricultural experts, together with Newmont, have partnered with the Ahafo communities near Newmont’s mine in undertaking this Initiative.
Newmont is also committed to being a good steward of the environment in which it is working. This has been manifested in its land reclamation and stabilization efforts initiated even prior to active mining. The company has already reclaimed over 100 hectares of land between its two projects and established three plant nurseries, totaling more than 50 acres, for reforestation and future land reclamation.
Newmont has committed itself to replanting three acres for every acre used for mining, where forests are impacted. /the reforestation programme in the Terchire forest in the Brong Ahafo Region, embodying also an integrated avian aquaculture project from which poultry and fish are sold locally at low prices is a remarkable feat.
Over 60 endangered timber species which were on the brink of extinction have been revived. There are over 200 seedling species in the plant nurseries and Newmont has donated more than 350,000 seedlings to the President’s Special Initiative on Reforestation and the Ghana National Scholarship Beneficiaries Association (GNASBA) for their reforestation projects. Newmont has also enabled the people near the Ahafo mine find a beneficial use for the troublesome York tree which has been difficult to control in its growth.
Beating the bark of the tree to manufacture jute-like mats (known as ijuke mats) now provides a source of livelihood for people since Newmont purchases these mats for erosion control. The mats conform better to the ground surface and, therefore, are in some ways better then jute for the purpose. The mats also act as nutrients for the soil through decomposition and thus support the company’s aim of working towards the highest standards of environmental management.
Clearly, the gold mining industry in this new era of gold in Ghana, rather than be a source of environmental degradation, can be a catalyst development of forests and the overall environment.
Newmont has faced criticism and questions on a number of occasions from some stakeholders, particularly NGO’s and community members, about certain aspects of its operations in Ghana. The company has been ready to effect corrections where appropriate, as it did in respect of resettlement housing for relocated communities in the Ahafo area in response to complaints about room size. In this new era of gold mining in Ghana, companies have to distinguish themselves through their record of social as well as environmental responsibility.
Bill Zisch, Newmont’s Vice-President for the Africa Region, has expressed the company’s outlook very succinctly: “Combining leadership in technology with a high sense of social responsibility – which is true industry leadership – is the distinguishing ballmark of Newmont Ghana Gold”.
Daily Graphic - Thursday, March 8, 2007 Page: 19