Sustained funding in exploration efforts stays the surest approach of guaranteeing long-term development and sustainability for the mining sector, Chief Executive Officer (CEO)-Ghana Chamber of Mines, Dr. Sulemanu Koney, has stated; emphasising the necessity for a conducive surroundings and coverage initiatives to facilitate better exploration.
“Effective and efficient exploration is the foundation of a thriving mining industry. It’s not solely about immediate income but the groundwork for future development,” the Chamber’s CEO stated in an interview with B&FT.
While the nation’s exploration price range rose considerably from US$107million in 2021 to US$114 million in 2022, excessive taxes stay a major obstacle. This straight limits firms’ capability to sufficiently allocate funds towards the vital drilling and evaluation actions elementary to exploration.
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Mr. Koney stated taxes on exploration actions must be addressed, as they aren’t solely affecting discovery of recent minerals however lowering the nation’s attractiveness as a most popular vacation spot for mining funding on the continent.
With respect to Africa, exploration spend elevated 12 % to US$1.3billion in 2022; pushed by nations like Mali, DR Congo, Côte d’Ivoire and Ghana. However, funding in Ghana has declined over latest years. This has severe implications, given mining’s fiscal and foreign exchange income significance.
Ghanaians maintain a large proportion of native exploration licences however wrestle to lift capital for high-risk and excessive capital-intensive actions. “Given that Ghanaians hold a large share of exploration mineral rights, they stand to benefit if the hurdles of exploration in terms of upfront costs are reduced,” the Chamber of Mines outlined in its 2023 trade report.
The relevance of exploration is to make sure a pipeline of future viable tasks, as that is the single-most vital exercise that ensures a steady manufacturing of minerals and discovery of recent mineral assets – to complement manufacturing from current mines or change the output of mines whose financial ore physique is exhausted.
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However, in keeping with the Chamber of Mines, exploration funding in Ghana has declined considerably lately. This is alarming for a rustic the place mining is vital for foreign exchange and monetary income technology.
“Frustrating exploration with high taxes before commercial viability isn’t justifiable,” asserted Dr. Koney. “Investments benefit the companies, but also provide valuable geological data even if unsuccessful.”
The mining trade depends closely on finite mineral assets, making new discoveries crucial for long-term sustainability. Concurrent exploration, improvement and mining ensures easy transitions, however bureaucratic delays in securing permits and licences typically hinder progress.
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Dr. Koney urged “an incentive scheme to reduce exploration costs and attract critical investments into this high-risk business”. Exempting VAT on main expenditures may enhance money flows and competitiveness.
Such delays additionally financially affect smaller exploration companies regardless of promising discoveries. Lowering obstacles and addressing taxation may spur funding, suggested Dr. Koney. Favourable regimes like that in Canada display such incentives’ long-term financial deserves.
Dr. Koney additionally emphasised localising the whole mining worth chain, together with manufacturing and worth addition.
“There’s untapped potential for local manufacturing, given the captive market within industry,” he remarked. “We need action in converting discussions into investments to nurture competitive local growth.”
Overall sector efficiency was combined in 2022. Gold and diamond manufacturing rose considerably, however bulk minerals declined. Attributable gold output elevated 32% in 2022 to three.7 million ounces, owing to large- and small-scale development.
With over 3.2 million ounces projected from Chamber members in 2023 plus small-scale contributions, whole 2023 gold output is forecast between 3.3-3.5 million ounces. Ghana Manganese Company additionally plans to lift manufacturing from 3.2 to five million tonnes.