Ghana has technical capacity, but capital remains key constraint in mining sector – Dr Boateng

The Institute of Mining Research and Governance (IMRIG) at the University of Mines and Technology has argued that Ghana possesses the technical expertise and experience needed to develop its extractive sector, but continues to face a major constraint in accessing sufficient capital to fully exploit its mineral resources.

Speaking during a JoyBusiness Roundtable discussion on rethinking Ghana’s approach to gold mining, oil, and critical minerals, the Acting Director, Dr. Frank Boateng, noted that Ghana remains one of the most experienced gold-producing countries on the African continent, alongside global mining leaders such as Canada, Australia and the United States.

“Ghana is a matured country when you talk about gold. On the continent, Ghana is counted among the leading producers. We have the experience and the technology,” he stated.

He explained that the main barrier to scaling up mining operations is not skills or technology, but access to large-scale financing required for exploration and production.

“What we don’t have is the financial resources. We can deploy our human capital and knowledge to tap this from elsewhere and help the country do more,” he added.

According to him, successful mining ventures depend heavily on early-stage exploration investment and strong balance sheets before companies can access capital markets.

He cited an example from his professional experience, where a mining company raised about A$260 million on the Australian capital market after investing nearly A$90 million in exploration to establish viable mineral reserves.

“Before we went to the capital market, we had already spent close to $90 million in exploration. We were very clear that we had the resource and an appreciable life of mine,” he explained.

He noted that once the resource base was confirmed, a bank in Australia agreed to finance operations under structured conditions designed to manage risk and ensure accountability.

According to him, the financing arrangement included an equity stake for the bank in the mining operation to provide oversight and confidence in the project’s management.

“They said they want 7% equity stake in the mine… not because they are interested in mining, but because they want their eyes in the operations,” he said.

The expert added that the bank also introduced hedging arrangements to protect the company against volatility in global gold prices, helping stabilise cash flows and support production planning.

“We will hedge the gold for you at about $200 below the spot price at the time. This helped our cash flow projections,” he explained.

He said such structured financing models allowed the company to successfully begin production and repay investments over time.

The expert stressed that these examples demonstrate how innovative financing arrangements can be used to unlock Ghana’s mining potential if properly applied.

المصدر: MyJoyOnline (GH)