Prime News Ghana

Major boost for local banks, Ghanaian-owned insurance companies with implementation of Minerals Commission’s procurement list

By Vincent Ashitey
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The Minerals Commission has commenced the implementation of the fifth edition of the new procurement list which now has 50 items for the provision of goods and services.

This replaces the fourth edition of the procurement list which was published by the Commission in early 2022.

According to the Chief Executive Officer of the Minerals Commission Mr. Martin Kwaku Ayisi, the Minerals and Mining (Local Content and Local Participation) Regulations, 2020 (L.I. 2431) came into force on December 22, 2022.

The purpose of the Regulations among others is to promote job creation using local expertise, goods and services in the mining industry and their retention in the country.

The law is also to achieve the minimum in-country spend for goods and services and create mining and mineral related industries that will sustain economic development.

Pursuant to Regulation 7 of L.I. 2431, the Commission is required to publish a local procurement list which stipulates the goods and services with Ghanaian content which are to be procured in the country. Regulation 7(3) of L.I. 2431 further states that the Commission shall review the procurement list annually.

For instance, all mining companies are expected to ensure that at least sixty percent (60%) of financial services including revenue from the sale of minerals go to the local Banks.

He disclosed that receipts from the sale of minerals is over US$ five billion, a figure which is likely to go up significantly as new mines come on stream and added the existing ones to expand their operations, the local banks such as CBG, National Investment Bank, Ghana Commercial Bank and Agricultural Development Bank are likely to benefit greatly.

“The same applies to insurance services which also require a minimum of 60% of all insurance and reinsurance placements be made with Insurance companies exclusively owned by Ghanaians”, he said.

Mr. Ayisi in a statement said the increase in the items on the list comes at the time when receipts from mineral revenues and investments hovers around US$10 billion. For instance, there are four huge new projects with investment of about US$ 1.7 billion. The new projects are the US$ 850 million Ahafo North gold mine project by Newmont Ghana Gold Limited, US$ 500 million gold project currently under construction by Cardinal Namdini Mining limited in the Talensi District of the Upper East Region, the US$ 200 million gold mine to be constructed in the Upper West Region and the US$ 125 million lithium project at Ewoyaa in the Central Region.

Additionally, Mr. Ayisi stated that some mines are undertaking expansion and redevelopment. The undergoing expansion include the Ahafo South mine of Newmont which now covers the Subika underground. Golden Star Resources is spending about a billion dollars to expand the Wassa underground mine.

The mines being redevelop are the Anglogold Ashanti Obuasi mine where a billion dollars has been expended and the Bibiani mine of Mensin Gold Ghana Limited which started production in the last quarter of 2022. The redevelopment of the Bibiani mine is over US$200 million.

It is the expectation of the Minerals Commission that these investments will support the growth of the economy and boost local participation under the new procurement list.