DEVELOPMENT AND IMPEMENTATION OF POLICY FOR LOCAL CONTENT IN GHANA

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DEVELOPMENT AND

IMPEMENTATION OF POLICY

FOR LOCAL CONTENT IN GHANA

Presented by:

Richard Kofi Afenu

Manager, Sectoral Policy & Planning

Minerals Commission,

Accra, Ghana.

MINING & SUSTAINABLE DEVELOPMENT FORUM

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PRESENTATION OUTLINE

Development of the Policies

Definitions

The legal Framework

Implementation Framework

 Mining Companies

 Exploration

 Mine Support Service Companies

Concerns and Challenges

CONCLUSIONS and WAY FORWARD

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Definitions of “Local Content

”



World Bank definition for “domestic preference qualification” is based on the

percentage of local ownership

of the firm.



The

African Development Bank (AfDB) defines “local firms” based on place of

registration, a majority

of board members being nationals, and level of shares held by

nationals.



The

Trinidad & Tobago Local Content and Local Participation Policy aims to

maximize the level of

participation of its people, enterprises, technology, and capital

through the development and increasing use of locally owned businesses, local financing,

and human capabilities in the energy sector; defines local content and participation in

terms of

“ownership, control and financing by the citizens of Trinidad and Tobago.” 1 It

aims to support:



Local participation: maximizing the depth and breadth of local ownership, control, and

financing, in order to increase local value capture from all parts of the value chain created

from the resource, including those activities in which Trinidad and Tobago people,

businesses, and capital are not currently engaged, both within and outside of Trinidad and

Tobago

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Definitions of “Local Content

”

(adapted from world bank) in terms of value addition

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Definitions of “Local Content

”

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Definitions of “Local Content

”

(adapted from world bank) in terms of Spend Recognition Levels

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Development of the Policies

Draft Minerals & Mining Policy, African Mining Vision and

ECOWAS Mineral Development Policy



Inadequate local value addition to minerals produced;



Lack of local capital in the mining sector;



Developing, attracting and retaining local human resource in the sector;



Integrating the sector with the rest of the economy (ensuring backward, forward and

side-stream linkages)



Developing local industrial capacity for the mineral industry;



Contributing to the economic empowerment of Ghanaians by generating opportunities

for local entrepreneurship, increasing demand for local goods and services and

continuously creating employment opportunities for Ghanaians



Artisanal and Small Scale Mining;



Promoting the transformation of mining capital into other forms of development

capital;



Contributing to the economic empowerment of Ghanaians by generating opportunities

for local entrepreneurship, increasing demand for local goods and services and

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Minerals and Mining Act , 2006 (Act 703)

Section 11 (Application for mineral rights)



An

application for a mineral right

shall be accompanied

with ...,



proposals with respect to the employment and

training in the mining industry of Ghanaians.

Section 50 (Recruitment and training of Ghanaians)



(1) ...localization policy, ... programme for the

recruitment and training of Ghanaian personnel

as

prescribed.

The legal Framework

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Section 105 (Preference for local products and employment of

Ghanaians)



(1)

The holder of a mineral right shall in the conduct of mineral

operations, and in the purchase, construction and installation of

facilities, give preference

to-

materials and products made in Ghana,



service agencies located in the country and owned by



(i

) citizens,



(ii) companies and partnerships registered in Ghana



(iii) public corporations

(2) give

preference in employment to citizens



to the maximum extent possible and consistent with safety, efficiency and

economy.

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Mining and Sustainable Development

EXPATRIATE QUOTA

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Proposed Framework based on Categorization of Staff

into:



Unskilled Labour



Skilled

Labour

(

trades

men/artisans,

after

specified apprenticeship

)



Clerical Staff



Technical & Supervisory Staff (

after tertiary

education)



Management Staff



Implementation Framework

Mining Companies Exploration

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Commence

ment

2 Years

After

4 Years

After

6 years

After

Unskilled

Labour

100%

Skilled Labour

90%

100%

Clerical

100%

Technical,

Supervisory, &

Management

*

85%

90%

95%

• Minimum of 3 Expartriates Allowable

• * After 2 years, special cases where skilled labour is critical; this could be provided for

within this limit

Implementation Framework

Mining Companies

Ghanaian Proportions:

Mining

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Ghanaian Proportions:

EXPLORATION

Commence

ment

2 Years

After

4 Years

After

6 years

After

Unskilled

Labour

100%

Skilled

Labour

90%

100%

Clerical

100%

Technical &

Supervisory

95%

100%

Management

_*

Up to 2

Up to 2 Up to 2 Up to 2

•No. of Expats

•After 4 years, special cases where skilled labour is

Implementation Framework

Exploration Companies

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Implementation Framework

General Transitional Arrangements

:

Existing mining operations have up to 2 years to restructure

General Special Cases

:

• Extra Expats. will be considered under

justifiable instances, e.g.:

•Specialized Technology

•Significant comparable Ghanaian Expats

•Where training (being done but) would require

longer than transition period

• ≥ 5 Concessions – for

Exploration

Co’s

• ≥ 2

Mining

Operations – (2 for Head Office)

•Regional Offices – to be justified

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Implementation Framework

Special Cases

(contd)

:

Consideration of any such application/request

would entail:

• Review/audit of existing Expat positions

• Review of proposed additions

• Recommendation for Minister’s approval

Discovery of a company’s flouting of provisions,

without prior approval



Sanction: payment of one (1) year salary of the

expatriate involved for each month, or part thereof,

worked to Government.

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Implementation Framework

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Implementation Framework

Service Companies

1. Mining contractors (large scale)

2. Support to small scale miners

3. Assay laboratories

4. Exploratory drilling

5. Fabrication of equipment &

manufacture of consumables

6. Supply of equipment & technical

services

7. Haulage

8. Mining Consultancy

9. Mineral exploration services

10. Supply of explosives & chemicals

11. Manufacturing of

explosives/chemicals

12. Engineering construction & mine

infrastructure development.

13. Buying and export of gold

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Implementation Framework

Service Companies

Guidelines have been developed to cover the various activities

offered under mine support services companies:



Unskilled labour, skilled labour & clerical

categories reserved for Ghanaians, except for the

Special Cases



Considerations may be given to expatriate staff to

work in companies’ Regional Offices



Company must have other active operations including

offices and staff in the sub-region to get recognition for

regional office



Expatriates engaged for day to day activities in

another

sub-regional

country

-

Will

not

be

recommended for permit

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

Companies to submit localisation & training

programme within

4 months of coming into

force

of

Regulations

or

Registration

(whichever is earlier), for consideration



Companies to submit report on training done

during

period

of

the

permit

and

the

implementation of the training plan for the

Ghanaian counterparts.

-

Recommendation for grant and renewal of visas,

work/residence permits contingent upon these

Implementation Framework

Service Companies

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Implementation Framework

Service Companies

Guidelines recognise

Management/Investors

in the mine support

service.

(i) Certain number of expatriates are recommended

for each Company

(ii) A company which provides more than one service

can benefit only once from (i) and not in multiples

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Implementation Framework

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

Government has 10% free carried interest in

all mining operations (section 43)



Government has right to acquire up to further

participation as may be agreed with the

holder of the mineral right.



Are these provisions adequate ?? Can Local

capital be employed more in mining which

can lead to increased participation ??

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Concerns and Challenges

•Skilled Ghanaians accepting expatriate positions outside Ghana

(Disparity in GH/Expats Conditions of Service)

•Lack of confidence on part of some personalities of mines in the

ability of Ghanaian staff to deliver in the absence of expatriate

staff.

•Non-availability of some products used by mines locally

•Inadequate support for local supplier development and quality

suppliers

•Narrow range of products currently within manufacturing scope.

•Need to broaden the scope to encourage local production of high

value-added products

•Monopoly supplier in-country supplying uncompetitive priced

products

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•Limited local production capacity of the products which is an

opportunity for LOCAL COMPANIES to go into the production of these

products

•Health, Safety and Environment concerns

…. Local Companies need

to comply with internationally acceptable (SHE) standards

•Energy supply and Quality issues

…. Inadequate and Opportunity for

Local or Other Investors

•Whether local companies could produce to required specifications

and standards…….

training and technology transfer to achieve these

•Lack of intellectual capital and Limited R&D in the country..

C

onscious

Government policy to achieve these

•Need to optimize local content in the mining industry; integrating

mining industry fully with the rest of the national economy.

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