Local content initiative constrained by capacity
The Ghana Chamber of Mines has said local companies must step up their efforts in delivering goods and services in the mining industry if the country is to fully realise its objective of enhancing local content in the sector.
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The chamber explained that although it was currently advocating for more local participation, failure of the local companies to deliver the required services for players in the industry on time was constraining the initiative.
The Director of External Relations and Communications at the Chamber, Mr Ahmed Nantogma, said “you cannot just force the companies in the industry to do local content, you have to encourage them and that is what we are doing. The local companies must step up their game, because you have some of them not meeting demands.”
Speaking at the sixth regional media training on oil, gas and mining in Accra, Mr Nantogma added, “If you are supposed to supply iron rods today, and you come back with 1,000 reasons why you cannot deliver, then it doesn’t wash. These are companies that are ready to do business.”
Local content in the mining sector focuses on three areas, namely, employment and promotion of a local workforce, procurement of locally produced goods and services, and additional licensing and reporting requirements.
Prior to the passage of the Minerals and Mining (General) Regulations, 2012 (L.I. 2173), which was supposed to guide the implementation of local content in the sector, it was envisaged that the limited capacity and high cost of goods and services produced by locals would affect the initiative.
The success, therefore, would depend largely on how the industry, local companies and the government institutions work together to overcome these obstacles.
Driving local content in mining
Mr Nantogma explained that the Chamber was collaborating with the Minerals Commission and IFC under the National Supplier Development Programme to support resident Ghanaian companies to produce selected inputs in the mining industry.
Currently, the items on the procurement list that mining companies are expected to buy from Ghanaians include general lubricants, quicklime and hydrated lime, emulsion explosives, heavy duty electric cables, grinding media, HDPE & PVC Pipes, cement and cement products and tyre-retreading.
“This programme is intended to economise on forex as well as serve as a catalyst for the local production of mining sector inputs that could be produced competitively in-country,” he said.
The case of oil and gas
For the oil and gas sector, the Local Content and Local Participation Regulation (L.I.2204), was passed in 2013 and it took effect in 2014.
An officer in charge of local content at the Petroleum Commission, Mr Abdul Karim Adam, who also spoke at the same training said, companies delivering services or participating in the oil and gas sector must increase their capabilities.
“The need for local companies to increase their capacity is very important. Some of them are too comfortable and with the law, the requirements are more stringent now, so you need to work more to participate in the sector,” he said.