Ahafo indigenes gear up for business opportunities from Newmont’s next mine

Both Newmont Mining, the American gold mining titan and Ghana’s economy are on the brink of reaping huge rewards from the impending development of a new gold mine at Ahafo North which is expected to produce between 350,000 and 375,000 ounces of the precious metal each year over its projected 13 year mine life, starting from mid 2025 when it is scheduled to commence production. But the immediate – and biggest – beneficiaries will be the local communities in the area where the mine is sited. Newmont is already the biggest gold mining company in Ghana where its two mines currently operating – located at Ahafo South and Akyem respectively – cumulatively deliver close to one million ounces a year and  the company is also the biggest gold miner in the entire world, with mines in two other continents as well.

The Ghanaian economy itself is enjoying a surge in global gold prices to record highs of close to US$2,000 per ounce, propelled by global economic uncertainties and this is not only attracting lots of new investment into formal, large scale gold mining (two more new mines are planned to be developed in northern Ghana over the next few years) but is even encouraging the resumption of production in relatively high cost mines that had hitherto been closed because they were no longer financially viable.

But for the local communities in Ahafo North, Newmont’s impending new mine will  be a complete game changer, a situation made all the sweeter by the fact that over the past nearly two decades they have looked on enviously as their neighbours to the immediate south have benefitted  far more than them from the company’s oldest Ghana, the flagship Ahafo South mine which currently produces about 600,000 ounces a year, and whose operating life span has been extended further with the commencement of underground mining below its Subrika pit. While Newmont has prudently extended its largesse, given to host communities through its corporate social responsibility activities, to communities in Ahafo North, inevitably the actual host communities of the Ahafo South mine have enjoyed the biggest benefits.

Now however, the local communities in Ahafo North are coming into their own, even before actual mine construction begins. While civil society tends to assess the social responsibility of mining companies by their CSR expenditure, Newmont is looking to widen the scope by focusing more than any other mining firm in Ghana has ever done before on sustainable economic empowerment. This primarily involves preparing locals for both employment at the mine during both the construction and actual  mining phases and for exploiting unfolding business opportunities as contractors and suppliers. But the company, acutely aware that not everyone can be employed at the impending mine or can be a supplier or contractor, is also supporting initiatives that will enable locals earn their living from other activities too, particularly agriculture which traditionally has been the predominant field of economic activity in the area.

The Ahafo North mine will create 1,800 jobs during the construction phase although many of these will inevitably be temporary. But even when completed and in actual production , there will still be some 550 jobs provided. Newmont has already entered into a formal agreement which stipulates that this year, as mine construction commences, 40% of all the vacancies created will be filled by indigenes of the host communities, with this proportion rising to 53% within the next five years. Importantly Newmont aims to live up to its claim that diversity is one of its core corporate values – the company aims to ensure that 50% of those jobs go to women.

Mining is not just a highly technical industry; Newmont as industry leader insists on the highest standards. Furthermore, lacking any glamour, the mining industry is heavily male dominated too. This will present formidable challenges with regards to meeting those targets since the host communities lack skilled labour, particularly technically prepared women.

Consequently, a key component of Newmont’s preparedness effort towards developing  its Ahafo North mine is its construction worker training programme (CWTP).This is a three month programme established by Newmont to train, in batches, 168 artisans from the host communities in welding and fabrication, scaffolding, steel bending, carpentry, masonry, equipment operation, and crane operation , and offer temporary job opportunities through its contractors during the construction of the mine.

All 168 trainees are locals from the ten communities that host the impending Ahafo North mine and the Ahafo South mine which has been producing for nearly two decades. So far 72 trainees have completed their three month training in welding and fabrication, scaffolding and steel bending, with international, national and local training institutions. Importantly, the training will make them eminently employable by other extractive industry companies after the construction work at Ahafo North has been completed

Speaking at their graduation, Andries Havenger, the Project Director for the impending new mine affirmed that the training programme was established to  “enhance their capacity to meet required standards and approved certifications required for delivering work for Newmont and future work opportunities within the wider extractives industry.”

The remaining 96 trainees will be trained in four batches of 24  each. Training has commenced for 48 of them in carpentry and masonry while preparations are underway for training to commence in equipment and crane operation later this year. Communities from Ahafo North are getting 92 slots under the initiative while Ahafo South’s communities are getting the other 76. The aim is for women to get half of the slots available.

There will be lots of business opportunities on offer to local enterprises as well, who have contracts reserved for them.  Importantly Newmont has reserved a certain proportion for enterprises which it calls local-local, meaning businesses owned by indigenes of the 10 host communities where its two Ahafo mines are located. Specific proportions have also been reserved for businesses designated simply as local – which means enterprises owned by people from that part of the country but not necessarily the 10 host communities in Ahafo itself.

Not only has Newmont ringed fenced packages (goods and services) for local-local businesses; it is offering them  capacity building opportunities to enable them qualify as contractors and suppliers in the first place under the company’s strict  quality standards as well as for business continuity. This is being done under a structured enhanced local procurement Programme, ELPP. Here Newmont is enthusiastic  that its local sourcing will create even more employment opportunities indirectly provided through its contractors and suppliers.

To this end, Newmont has a register of local businesses (broken down into local-local and simply local sub -categories) )eligible for contracts and this register is being regularly updated as more qualified businesses  sign up.

Newmont Ahafo’s manager for external and community relations explains that the company is teaching local enterprises about the company’s procurement processes and requirements. He reveals that in 2023 alone, local-local enterprises will  be presented with business opportunities worth some US$3 billion. This is expected to grow further next year as construction of the mine accelerates.

One major opportunity reserved for local-local enterprises is the building of 250 houses for the resettlement of the households who need to be moved out of the mining area to enable the construction of the Ahafo North mine. The supply of construction materials for the mine itself will also offer substantial opportunities for local enterprises . Already, the diversion of an 8.5 kilometre stretch of the highway connecting Kumasi and Sunyani, which is being diverted at Newmont’s expense to accommodate the impending mine has been contracted by the Ghana Highways Authority, which is the project implementing institution, to a local contractor.

While most of the business opportunities being generated  are deriving directly from the development of the new mine itself, Newmont is deliberately seeking to create economic opportunities for the vast majority of these primarily agrarian host communities who will not have the ability to get involved in this. The best example of this approach is the installation of the Asutifi Processing Centre , a US$4 million facility which will provide the capacity to buy pepper and ginger from local farmers, process it and sell to both local and foreign markets. Most of the requisite equipment has already been installed and at full capacity the processing centre will be able to process some 550 metric tons of both crops, cultivated by about 2,500 local out grower farmers drawn from the 10 communities that make up both Ahafo North and Ahafo South. The farmers – who must be indigenes of the host communities and must belong to a recognized local farmers group – are being trained by GIZ, the German government’s international development assistance institution

Even before processing activities commence –  expectedly by May this year – the facility has already sold nearly eight tons of fresh pepper to the United States, through a company based in Tema. The centre will have the capacity to process 500 kilograms of ginger and chilli pepper per hour.

The farmers are enthusiastic. After all, Newmont’s crop compensation programme has provided local farmers with substantial financing which many of them have prudently used to expand land under cultivation (albeit in different locations from where they started out from) and to improve their farming techniques, including the introduction of mechanized farming. The processing centre will provide a guaranteed market for their pepper and ginger produce.

Newmont executives claim they want to leave their host communities much wealthier, when the mine’s life expires expectedly around 2038, than they are now. If that fails to happen it would not be due to lack of opportunity created by the mining company itself.