In what ways has the Covid-19 pandemic impacted mining activities in Ghana?
ERIC ASUBONTENG: Because most mining companies in Ghana are part of global mining institutions, they have generally been somewhat ahead of the curve in terms of planning. Global capacity and experience have allowed them to be more proactive in taking preventive measures, even before Ghana reported its first case. Many companies already had business continuity and contingency plans in place, as well as health interventions, for example, restricting travel for employees both locally and internationally.
However, once cases were reported, the government began to introduce its own directives. At that stage, mining companies were impacted on a practical level, particularly by the lockdown and the international travel ban. That said, even under the lockdown, the government exempted mining companies, provided they take the necessary precautions. Mining workers could therefore move in and out of work easily.
Moreover, most mining companies are located in remote areas, and the lockdown mainly affected the two big cities of Accra and Kumasi. The fact that mining companies were exempted and the lockdown did not generally affect the movement of goods has been helpful for mining companies, and operations have carried on without too many challenges.
Mining companies are better prepared than other sectors of the economy, and even though no mining company in Ghana has suspended production, we do not know what lies ahead of us. Whatever contingency and continuity plans we have in place need to be under constant review and subject to change as we move forward.
How will the surge in gold prices affect the mining industry, and to what extent are sector players working with the government in response to the crisis?
ASUBONTENG: Oil prices have collapsed amid the pandemic. The importance of the mining sector, and gold in particular, is even more critical now. Even before this crisis, gold was a key contributor to Ghana’s economy. The increase in the price of gold certainly helps the government, particularly in terms of boosting revenue, taxes and royalties.
However, it is equally important during this time that we are able to maintain production. This means that, hopefully, we can avoid losing control during subsequent waves of the crisis.
Thus far we have managed, but the crisis comes with its own set of challenges and introduces its own unexpected costs, and we do not know the full extent of that cost yet. For example, because of the impact on supply chains, companies are building up extra stock. That means they might be charged a higher premium by suppliers, which could drive up costs.
Mining companies are also supporting and working directly with their host communities to help respond to the crisis. It is obviously in our interest to do so, to ensure that companies and communities are prepared if cases spike, and if they do, that they are managed appropriately.
All mining companies in Ghana are presently working with their host communities. Some of them have hospitals that service both companies and communities. At one point, there was a shortage of hand sanitiser across the country; we moved in quickly with our own expertise, and, with approval of the Ghana Food and Drugs Authority, developed our own sanitiser, which we are distributing to communities. These count as additional costs, but the fate of communities and mining companies in this crisis is tied together.
At a national level, the members of the Ghana Chamber of Mines came together in early April to assist the government, providing $2m in support to cover ventilators, personal protective equipment and testing.
What are the most pressing challenges mining companies in Ghana will need to address in order to continue to work in a safe and sustainable manner?
ASUBONTENG: Health is the first and foremost challenge we face. Companies do not want to risk the health of their workers and communities.
As we manage the crisis, it is also important that we work closely with the government, so that they fully understand the impact of any new directives on mining companies and avoid unintended consequences. To that end the Ghana Chamber of Mines is in regular consultation with the government about the sector’s activities.
The other challenge is to protect and maintain supply chains, and ensure we have enough back-up for predictability purposes. Not only are supply chains potentially impacted by directives at home, but they are also impacted by directives imposed in other countries. When South Africa imposed its lockdown, our ships were no longer able to move, and our supplies were stuck. It took time before exemptions were made for specific cases to finally see our supplies trickle through. Therefore, getting supply chain under control is key.
Lastly, skilled personnel is another challenging factor. With many mining companies relying on specialist skills of expatriate workers and contractors, some of whom are currently stuck in their home countries, this could result in certain skills no longer being available in-country.
Source: www.oxfordbusinessgroup.com
