Plans underway to regulate community development agreements in mining sector

Ghana will soon introduce a legislative instrument (LI) aimed at regulating community development agreements (CDAs) to ensure such agreements genuinely address the needs of local communities impacted by mining activities, President Nana Akufo-Addo has said.

Speaking at the inauguration of Cardinal Namdini Mine – operated by the Shandong Gold Group in the Talensi District of Upper East Region -the President reaffirmed the government’s dedication to sustainable and socially responsible mining.

“It cannot be right for you to post millions of dollars of profit while owners of the lands that give you these resources suffer,” President Akufo-Addo said, noting the need for fair distribution of mining benefits.

“That is why government has initiated discussions with the Ghana Chamber of Mines and other stakeholders to promulgate a legislative instrument that regulates community development agreements, to ensure these agreements truly reflect the people’s needs,” he added.

He expressed optimism that the LI will drive sustainable growth, improve living standards and enhance socio-economic progress in mining communities.

The President urged Cardinal Namdini Mine and its parent company, Shandong Gold Group, to follow exemplary standards in safety, environmental stewardship and community engagement.

“As you commence production, government expects that you will employ the best mining practices and adhere to all environmental and other regulatory standards for a safe and sustainable mining operation,” he said.

He further emphasised the importance of collaboration between mining companies, traditional leaders and local communities, urging firms to uphold their corporate social responsibility (CSR) commitments.

He affirmed the government’s commitment to managing resources for socio-economic progress: “Government is fully committed to the efficient and sustainable exploitation of our natural resources and their judicious use for our nation’s socio-economic development”.

He also revealed plans to amend the Minerals Development Fund Act, 2016 (Act 912), increasing the Ghana Geological Survey Authority’s (GGSA) budgetary allocation from mineral royalties from 8 percent to 13 percent to boost geological investigations.

He added that construction of new Regional and District Offices for the Minerals Commission in Tamale, Wa, Bolgatanga and Bole could not have been timelier.

With a US$1.1 billion investment, Cardinal Namdini Mine represents Shandong Mining Group’s first overseas green project. It is anticipated to become the country’s third-largest mining operation, with production projected at 300,000 ounces annually in its initial three years.

The mine’s inauguration is expected to boost domestic gold production – generating jobs, fostering local development and supporting the local and national economy.

“It will bring about a transformative change in this area, providing opportunities for growth and development that will benefit generations to come,” President Akufo-Addo added.

Similarly, Minister of Lands and Natural Resources, Samuel Abu Jinapor, confirmed that Cardinal Namdini Mine is the first greenfield mine in the country since 2013, when Newmont Akyem poured its first gold, and is one of the largest single-stream gold mines in West Africa.

He disclosed that another large-scale greenfield project is under development by Azumah Resources in the Upper West Region.

For his part, the Chinese Ambassador to Ghana, Tong Defa, noted that the project, among others, demonstrates the government of China’s commitment to deepening long-standing diplomatic relations.

He observed, for instance, that bilateral trade volumes between Ghana and China currently stands at US$11 billion with an annual growth rate of 10.4 percent.

The inauguration of Cardinal Namdini Mine and new mining projects in development are expected to solidify Ghana’s position as Africa’s leading producer of the precious yellow metal.

In 2023, Ghana achieved a record-high gold output of 4 million ounces – an 8.3 percent increase from the previous year, driven largely by a substantial rise in small-scale mining production which offset declines in the large-scale sub-sector.

This brought the small-scale sector’s share of total production to 27.7 percent in 2023, up from 17.6 percent the previous year after a 70.6 percent year-on-year production surge.

The country’s gold production is projected to increase further in 2024, with anticipated outputs between 4.3 million and 4.5 million ounces driven by both small- and large-scale producers. New projects, such as the Cardinal Namdini, are expected to supplement production from established mines and help solidify the country’s leading role in Africa’s gold industry.

Large-scale sub-sector output alone is forecasted to reach between 3.1 million and 3.3 million ounces in 2024.