Mineral Processing Sector
Ghana is endowed with substantial mineral resources and has a well-established mining sector, which has grown considerably in recent years to represent an important pillar of the Ghanaian economy.
The minerals extractive industry currently has thirteen large-scale mining companies and, over three hundred registered small scale mining groups and ninety mine support service companies. Industrial minerals are geological materials which are mined for their commercial value.
They are not fuel (fuel minerals or mineral fuels) and are not sources of metals (metallic minerals). They are used in their natural state or after beneficiation either as raw materials or as additives in a wide range of applications. Industrial minerals that are produced in Ghana include:
• Limestone / Dolomite
• Silica sand
It is government’s policy to diversify the exploitation of its mineral resources base from the traditional minerals like gold, diamonds, bauxite and manganese to include the exploitation of industrial minerals which could promote effective linkages in the economy, to reduce current over reliance on imported substitutes.
The industry operates under the objectives of the National Mining and Minerals Policy. The core aim of the Mining and Minerals Policy is to: “Conserve and sustain the development of the nation’s mineral resources and the maintenance of the environment”.
Some objectives in the Minerals Policy are :
• Ensuring that Ghana’s mineral endowment is managed on a sustainable economic, social and environmental basis and that there is an equitable sharing of the financial and developmental benefits of mining between investors and all Ghanaian stakeholders.
• Encouraging local and foreign private sector participation in the exploration for, and commercial exploitation of mineral resources, consistent with the government’s commitment to a freemarket enterprise economy.
The Government recognizes that private sector investors need to be able to operate profitably, be internationally competitive and satisfy their shareholders’ and employees’ expectations.
• Achieve a socially acceptable balance between mining and the physical and human environment and ensure that internationally accepted standards of health, mining safety and environmental protection are observed by all participants in the mining sector.
• Encourage and facilitate orderly and sustainable development of small-scale mining. There is considerable potential for small-scale minerals exploitation in Ghana and the Government recognizes that small scale mining can provide additional or alternative livelihoods in rural areas and can help to foster the development of Ghanaian mining skills, entrepreneurship and capital.
• Empower Ghanaians to become professional miners, mine managers and owners by maximizing opportunities for minerals-related education, training, career development and other support.
• Develop streamlined and effective institutional arrangements for the mining sector, together with adequate capacity to promote, authorize, monitor and regulate mining operations.
• Endow Ghanaian mining authorities with the capacities to gather, analyze and disseminate geo-data necessary for the promotion of minerals sector investment.
• Promotion of sustainable mineral resource management and utilization.
• Promotion of effective inter-agency and cross-sectoral linkages.
• Creation of an enabling environment for effective private sector participation.
• Promotion of effective community participation in multiple uses of mineral resources.
• Developing institutional capacity and capability for mineral service delivery.
ECOWAS Market :
In ECOWAS, not many countries have the potential for salt winning. Senegal and Ghana have the largest capacity for salt production in the region. Countries in the region including Mali, Nigeria, Burkina Faso, Cote d’Ivoire, Togo and Niger imported over 1 million tons of salt in the past decade.
It is on the export market that the contribution of salt to cooking, preservation, animal feed and oil production is measured. Nigeria presents potentially the biggest market in the region.
INVESTMENT OPPORTUNITIES :
Emphasis on investment promotion has been a major objective of the industry with a shift to a comprehensive vision that facilitates greater exploitation of Ghana’s industrial minerals. Investment opportunities in the industry are in the areas of exploitation or production and industrial processes.
• The production of industrial minerals for both local and international consumption
• Applications/processing of industrial minerals in the areas of construction, ceramics, paints, electronics, filtration, plastics, glass, detergents and paper.
• Companies to set up refinery facilities to serve the local industry for value-added products.
• Companies to exploit and produce solar salt. Potential exists for the utilization of part of the salt to produce caustic soda which is a raw material for the soap and detergent industry. The chlorine co-product can also be used as water treatment chemical and also serve as raw materials for the production of various health and sanitation chemicals.
• Companies to produce clinker for the mining industry. Demand for clinker is estimated at over one million metric tons per annum.
• Companies to exploit the extensive deposit of granite to produce high quality floor tiles.
• Companies to produce dimension stones for the building industry.
• Suppliers to supply salt for the local market.
Engineering and Services
• Service companies to provide support services, including contract drilling, assay laboratories, contract mining and geological consultancies to mining companies in the country.
• Companies to set up manufacturing plants and machinery for the mining industry.
• Companies to set up downstream production facilities to manufacture key input for the mining industry. Examples, mill balls, drill bits, cyanide and activated carbon.
INVESTMENT INCENTIVES :
Specific incentives to the sector include
• Depreciation 75% of the capital expenditure incurred in the first year of investment and 50% of the declining balance in subsequent years.
• Investment allowance of 5% in the first year only.
• Losses in each financial year not exceeding the value of the capital allowance for the year may be carried forward. Capitalization of all pre-production expenses is approved by the authorities when the holder starts development of commercial mining.
The Holder of a Mining Lease is also granted the following Benefits
• Exemption of staff from out of Ghana payments of income tax relating to furnishing accommodation at a mine
• Immigration quota for expatriate personnel free from any tax imposed by government for the transfer of foreign currency out of Ghana
• Exemption from the selective alien employment under the selective alien employment decree.
Ghana’s Minerals and Mining Act 2006, Act 703 has added some significant aspects to the country’s commercial law and they are
• Expenditure on exploration and development may be capitalized in accordance with regulate amortization provision for tax relief.
• Capital allowances have been designed to shorten the pay-back period and include 75% write off of capital in the first year and 50% annually thereafter on a declining balance.
• Retention of a proportion of revenue in foreign currency account for use in acquiring essential equipment and spare parts required for mining operations which would otherwise not be readily available without the use of such earnings
• Exemptions from import duties on imported plant and equipment