Newmont Mining Africa: Creating a golden future in Ghana

Africa’s gold miners have endured a tough time over the past few years, but there are positive signs of improvement now, which are good news not only for bottom line figures, but for communities. One such company that is enjoying and sharing the benefits of both is US-based Newmont Mining Corporation, one of the world’s largest producers of gold.

Newmont Image 3The Colorado-headquartered company has active mining operations in Nevada, Indonesia, Australia, New Zealand, Ghana and Peru. Holdings include Santa Fe Gold, Battle Mountain Gold, Normandy Mining, Franco-Nevada Corp and Fronteer Gold. Newmont also has many joint-venture relationships.

2015 saw the centenary of a company founded in 1916 in New York by Colonel William Boyce Thompson as a holding company to invest in worldwide mineral, oil, and related companies. According to company lore, the name “Newmont” is a portmanteau “New York” and “Montana”, reflecting where Thompson made his fortune and where he grew up.

In 1929, Newmont became a mining company with its first gold product in by acquiring California’s Empire Star Mine. By 1939, Newmont was operating 12 gold mines in North America.

The company’s first involvement in Africa came when it acquired interests overseas around the middle of the 20th century, by which time Newmont had a controlling interest in the Tsumeb mine in Namibia and in the O’Okiep Copper Company in Namaqualand, South Africa.

By 1987 Newmont’s growth became fast-tracked and a series of acquisitions over the next couple of decades reinforced the company’s strength.

Within Africa, the company runs the Ahafo operation, (which it owns 100 per cent) and which is located in the Brong Ahafo Region of Ghana, approximately 180 miles northwest of Accra.

Commenting on its operations, the company website explains its history in Ghana:

“Newmont’s presence in Ghana includes the Ahafo mine in the Brong-Ahafo region and the Akyem operation in the Eastern region near New Abirem. Newmont began working in Ghana with the acquisition of Normandy Mining in 2002.

“Production commenced in 2006 at our Ahafo mine and at our Akyem mine in 2013. We are also pursuing profitable expansion projects of our mines and mill in Ahafo.”

Ahafo is located along the Sefwi Volcanic Belt, a northeast-southwest trending volcanic belt in western Ghana and is an open mine, with one underground portal.

According to the company website, Ahafo has 2 primary ore zones: Ahafo South and Ahafo North. Mining is currently underway at Ahafo South and as of December 2013, the operation was producing 570,000 ounces per year.

Newmont’s Akyem operation is located in the Birim North District of the Eastern Region, approximately 111 miles northwest of the capital city of Accra. Newmont obtained the mining lease for Akyem in 2010 and began commercial production in 2013.

The company believes that investing in its people will create a lasting legacy. To that end, Newmont released a study in October 2014, called its ‘Shared Value Initiative’, as the corporate website describes:

“Done right, mining and natural resource development can be catalysts for economic and social progress in developing countries, as well as poor and subsistence communities. In a study released in October, the Shared Value Initiative identifies pathways for the oil, gas and mining industries to deliver positive social outcomes by tying business success to the prosperity of host communities and countries.

“Ahafo 2014 apprenticeship program benefits graduates and continuing students. While the downstream products and services of these industries create tremendous benefits for society in the form of energy and minerals, the report focuses on the communities where the minerals come from and establishes a framework for identifying ways to address societal issues and deliver real business value.

“All graduates of the program are offered employment in a variety of roles including control room operators, process operators, tradesmen, welding and maintenance. Since the program began in 2005, virtually all of the graduates have been employed by the company.”

Newmont Image 8The socio-economic impact of the Ahafo Mine was examined by Steward Redqueen in 2009 and reported on the Newmont website. It makes for compelling reading, with some of the headlines 6 years ago indicating that at that time:

Newmont Ghana Gold Limited (NGGL) on a national level: supports USD 360 million value added in terms of economic activity (0.95 per cent of GDP for Ghana); contributes directly USD 160 million to government tax income (2.56 per cent of national tax revenues of Ghana), USD 39 million to household incomes and USD 31 million as carried interest income to the government (to be paid when dividends are declared by NGGL); supports 41,000 jobs (0.39 per cent of the total labor force in Ghana), of which 1,921 jobs are directly attributable to NGGL; value added has grown by 135 per cent since 2009 but the number of jobs declined by 15 per cent.

The Report stated: “From a visual impression of the pathways through which NGGL’s spending trickles through the economy, we conclude that for a mine, it is relatively deeply connected to the Ghanaian economy. 

“A part of this economic impact is created in the Brong-Ahafo region (the region within which the Ahafo mine is located), which is home to 10 per cent of the Ghanaian population and contributes approximately 10 per cent to Ghana’s GDP.

“The impact of NGGL in the Asutifi district of the Brong-Ahafo region where the Ahafo Mine is located is much larger; approximately 8 per cent of the district’s (estimated) GDP and 10 per cent of (estimated) employment. The Newmont Ahafo Development Foundation (NADeF) amplifies this economic effect with another 23 per cent in terms of value added. 

“NGGL’s presence and its need for skilled labor has caused in-migration of people from outside the region in search of work at the mine, leading to higher prices for products and services in the region.

“NGGL’s economic impact has translated into higher disposable income for its employees, who spend almost twice as much as people outside NGGL’s catchment area. Households without members that work directly for NGGL (including NGGL’s contractors) and whom reside in the catchment area have 11 per cent more to spend than households outside the catchment area;

“A majority of people in the catchment area believe that the overall situation has improved since NGGL’s arrival, with people employed by NGGL holding favorable opinions but the people who were resettled mostly negative ones. To a certain extent, the Newmont Ahafo Development Foundation has contributed to this overall improvement by delivering infrastructural and social amenities including community libraries, teachers’ and nurses’ quarters, ICT centers and school buildings for the communities.”

“The main recommendations for NGGL are the continuation, and where possible, intensification of local sourcing and business activities. Although the low-hanging fruit may already have been picked, we think there are still areas where NGGL together with its suppliers and contractors can bring about positive changes. We also recommend that NGGL conveys its most successful programs to the Akyem mine in order to reproduce the positive impacts that are currently generated at the Ahafo mine.”

Newmont Image 1Newmont is acutely aware of the need to forge long-lasting ties with the local population and within Ghana, has worked hand in hand with HelpAge Ghana, an advocacy organization that supports senior citizens through income-generating projects, training programs, and health services. It also enhances the quality of life of its patrons by providing a new sense of purpose and companionship.

“Thanks to Newmont Ghana, the organization is now able to help even more people through its recently established recreational center. Newmont donated several items, including furniture, household electrical appliances, carpets and curtains to furnish HelpAge Ghana’s new multi-purpose day centre at Teshie, providing the elderly a comfortable environment to socialize, volunteer, and receive services,” says the company website.

“The donation was facilitated by United Way Ghana (UWG) through its Gifts in Kind Program, which connects corporations with non-profit organizations to help communities. Two other non-profits, Share Care Ghana and Street Girls Aid, also benefited from Newmont Ghana’s philanthropy.

“In addition to helping the elderly, through Newmont’s donation to Share Care Ghana, children with physical disabilities now have a refurbished physiotherapy facility. Also, for girls and young mothers who are living on the streets in Accra, they are now in a better position to improve their lives thanks to the catering equipment donated to Street Girls Aid for training purposes.

“Long-time collaborators Newmont Ghana and UWG have worked together since 2006 on various community service initiatives, including United Way’s Day of Caring and Newmont Ghana’s Workplace Giving Program, where employees give their time and a portion of their salaries to worthy causes. “