Minister of Lands and Natural Resources, Samuel A. Jinapor has hinted that Ghana cannot transfor its economies if it continues to dig and ship.
The Minister made these remarks while speaking at the Africa Prosperity Dialogues 2024 held at the Peduase Presidential Lodge, Aburi Hills in the Eastern Region on Thursday.
He said "Firstly, value addition. We cannot transform our economies if we continue to dig and ship!!! That is why since assuming office in 2017, Ghana’s President Akufo-Addo has been working to ensure that we add value to our mineral resources"
"Today, for the first time in our country, Government has established, through a Public Private Partnership, a four hundred kilogramme (400kg) gold refinery to refine the gold we produce, and we are working to secure a London Bullion Market Association (LBMA) Certification"
He disclosed that the Ghana Integrated Aluminium Development Corporation (GIADEC) and the Ghana Integrated Iron and Steel Development Corporation (GIISDEC), which was established in 2018 and 2019, respectively, have been working to promote and develop integrated aluminium and iron and steel industries, from exploration, through refining, to downstream production.
"And work is far advanced for the commencement of the construction of a Four Hundred and Fifty Million US Dollars (US$450million) manganese refinery in Ghana"
"Secondly, indigenous participation. To derive optimal benefit from our natural resources, African peoples must participate, fully, across the entire value chain of the industry. Our peoples must have equity in the companies involved in the exploration, production, and processing of our mineral resources"
"It is for this reason that the Government of Ghana is working with the Ghana Chamber of Mines to ensure that large scale mining companies, operating in the country, list on the Ghana Stock Exchange, to enable Ghanaians acquire shares in these companies. We have, also, enacted the Minerals and Mining (Local Content and Local Participation) Regulations, 2020 (L.I. 2431), to promote local content in the mining industry"
"Pursuant to this law, we have increased the items on the Local Procurement List of goods and services reserved for Ghanaians from twenty-nine (29) to fifty (50), retaining, here in our country, some Three Billion US Dollars, (US$3,000,000,000.00), annually, which would have otherwise been exported"
"Excellencies, Ladies and Gentlemen, needless to point out that across the globe, wherever natural resources have benefitted a country and its citizens, whether in Canada, Australia or China, it has been hinged on these two fundamentals. We must, therefore, pursue value addition and indigenous participation in the exploitation of our natural resources with utmost vigour, resilience and resolution"
"That is why President Akufo-Addo insisted that until we develop a policy for the exploitation and management of our green minerals, NO lease should be granted for their exploitation"
"Consequently, we have developed a policy which provides for a minimum of thirty percent (30%) indigenous participation, a strict requirement to list on the Ghana Stock Exchange, enhanced local content, increased royalties, and mandatory establishment of a refinery to ensure that we do not export our green minerals in their raw state"
"Excellencies, we cannot talk about Africa’s prosperity, without talking about her natural resources, which, for years, have been the fulcrum around which most of our economies revolve. After years of mining, Africa still holds some thirty percent (30%) of the world’s mineral reserves, with large deposits of green and emerging minerals, including: Ninety-one percent (91%) of the platinum group of metals, Seventy-nine percent (79%) of phosphate rock; Fifty-three percent (53%) of cobalt; Forty-six percent (46%) of manganese"
"Thirty-five percent (35%) of chromite, Twenty-five percent (25%) of bauxite; Twenty-one percent (21%) of graphite; Six percent (6%) of copper; and Substantial deposits of lithium, iron ore, and rare earth elements"
"Regrettably, over the years, the exploitation of these resources has not optimally benefitted the African peoples. According to the 2023 Multidimensional Poverty Index Report, nearly half of the world’s One point One Billion (1.1 billion) poor people live in sub-Saharan Africa. And using the International Monetary Funds’ GDP per capita income, twenty-five (25) out of the thirty (30) poorest countries in the world are in Africa, including countries with large deposits of natural resources"
"Excellencies, the reason for this unfortunate situation is obvious. Over the years, our natural resources industry has been dominated by foreign interests, and the export of raw minerals, denying us of any value addition or linkages to other sectors of the African economy"
He revealed that a 2018 United Nations Economic Commission for Africa (UNECA) study, rightly concluded that Africa’s underdevelopment, despite the vast deposit of resources, is largely due to failure to attract sufficient investment in other diversified activities along the value chain of our resources, and overdependence on the export of raw materials.
"In my country, Ghana, for instance, despite mining gold for over a century, and despite being the leading producer of gold on the continent, we still lack refineries to refine this precious mineral. And even though we boast of the second largest smelter in Sub-Saharan Africa, the Volta Aluminium Company (VALCO), we have to export our bauxite resources in their raw state, and import alumina, which is refined bauxite, for VALCO to smelt into aluminium. This is, certainly, a sorry story"
"But this story is not different from other parts of the continent. For example, Democratic Republic of Congo, which holds the largest reserves of cobalt, estimated at fifty-one percent (51%) of global cobalt reserves, exports the raw ore or its concentrate; and Zimbabwe, which holds Africa’s largest lithium reserves, and ranked sixth (6th), globally, exports raw lithium ore"
"Yet, Bloomberg estimates that the global lithium industry, at the mining stage, is about Eleven Billion US Dollars (US$11,000,000,000.00), but the value of the industry at the highest end, that is, the production of batteries, is over Seven Trillion US Dollars (US$7,000,000,000,000.00)"
"Unsurprisingly, therefore, African countries involved in the exploitation of lithium are said to be making a paltry ten to fifteen percent (10% - 15%) of this Trillion Dollar industry"
"Distinguished Guests, Ladies and Gentlemen, there is no better time, than now, to interrogate this matter, particularly as the world transitions to green energy, with lithium and other green minerals becoming critical for this transition. The theme chosen for this Conference, “Delivering Prosperity in Africa: Produce, Add Value and Trade,” is, therefore, apt, and I have absolute confidence that the panellists for this discussion on “extracting greater value from our minerals” will proffer recommendations that will ensure that the exploitation of our natural resources delivers prosperity for the African peoples"
"It is on this basis that, last year, we signed our first lithium mining lease, which, in addition to the above, also, provides for a one percent (1%) Growth and Sustainability Levy, and an additional one percent (1%) Community Development Fund"
"We are aware of the challenges associated with building an end-to-end lithium – battery industry, with advanced mining countries like Australia, which accounts for over forty-three percent (43%) of global lithium production, exporting over ninety percent (90%) of their lithium spodumene to China, the only country with an end-to-end lithium battery industry. But we are poised to retain, as much as practicable, a significant amount of the value in our country to ensure that we construct linkages to other sectors of our national economy"
He hinte that if Africa will benefit from its natural resources, particularly in the wake of the emerging critical minerals, Ghana must adopt a common position on the exploitation and management of these minerals.
"It is self-defeating to have a situation where one country is insisting on value addition, indigenous participation and enhanced fiscal benefits, while another is opening its doors to companies to extract and export these minerals in their raw state"
"Working together, under the auspices of the African Continental Free Trade Area Secretariat, we can have the bargaining power to insist on the twin-prerequisites of value addition and indigenous participation"
"Africa can, and must benefit from her mineral resources. But it requires concerted efforts and the commitment of all. It requires policies and strategies that NOT only ensures that we mine sustainably, but, also, add value to what we mine"
"It requires policies and strategies that will promote intra-African trade for our mineral resources, to retain the value of these minerals in-continent. We are enjoined by the African Mining Vision to use the exploitation of our mineral resources to underpin broad-based sustainable growth and economic development"
Story by: Joshua Kwabena Smith
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