"Mining communities in West Africa are generally characterised by high levels of poverty, so the direct and indirect benefits of mining investment can be great."

John Kwofie & Ivan Doku

PRINCIPAL MINING ENGINEER AND COUNTRY MANAGER & PRINCIPAL RESOURCE GEOLOGIST AND COUNTRY MANAGER-DESIGNATE, SRK CONSULTING

November 19, 2020

Could you start with a brief overview of SRK’s history, main expertise, and reach in West Africa?

JK: SRK Consulting registered its local office in Ghana in 2011, offering geotechnical engineering services focused on open pit slope stability, tailings dams and site investigations. Early work included a number of slope stability projects in Sierra Leone, Guinea, Mali, Burkina Faso, Ivory Coast, Ghana, and in a few other countries outside West Africa, including Sudan. Tailings dam and site investigation work has been focused on Ghana. The company has provided mining engineering support services to a mine in Mali, and conducted an economic evaluation for a dimension stone project in Togo. It has also conducted geological work on two mineral exploration projects in Liberia.

What are some short and long-term effects of the pandemic on the mining and mining services sector?

ID: Most operating mines in the region have not been materially impacted by the pandemic; their locations are not in the vicinity of hotspots and so movement is less restricted. Indeed, with the strong price of some commodities like gold throughout the pandemic, many mines’ gross revenue over this period is likely to exceed budget.

Mining consultancy services, however, have been negatively impacted-a common outcome when there are uncertainties in the mining industry. At the start of the pandemic, many mining operations declared force majeure, putting on hold several consultancy service agreements. This has also impacted the bottom-lines of companies providing exploration services. International travel restrictions remain an aggravating factor.

What have you noticed to be the main trends concerning community relations and the reception of mining companies in the region?

ID: Mining communities in West Africa are generally characterised by high levels of poverty, so the direct and indirect benefits of mining investment can be great. Among the challenges in many instances, however, are the legacy issues that become evident towards the end of a mine’s life. Lack of legislative instruments that demand a social and labour plan before a mining permit is issued, mean that community development is often only planned later. There may also be a lack of effective enforcement of license conditions. This curtails the process by which mining communities could engage with miners on the issue of shared value from mineral development projects.

While communities welcome the possibility of investment, there is no ‘free ride’ for mining companies, who need to earn their social license to operate through consultation and commitment to agreements with local communities. Affected communities are also very concerned about environmental impacts and sustainability issues, both during the operational and post-operational phases.

Could you give us an understanding of the geotechnical particularities that Ghana presents from an exploration perspective, and how are technical innovations helping SRK to both tackle challenges and find sustainable solutions?

JK: SRK applies a wide range of services and modern technologies to facilitate improved geotechnical data confidence during and after exploration. These include experienced professional site supervision and technical oversight, and standardised digital geotechnical core logging and database management. We apply the latest downhole geophysical wireline technologies and surface and aerial geophysical techniques through SRK-vetted geophysical service providers; experienced SRK geophysicists oversee, review and interpret the data.

Among other technologies we apply are the latest hyperspectral core imaging technology, digital photogrammetric modelling techniques for both terrestrial and drone mapping technologies, and augmented reality technology for geological and structural data.

Our work sees the application of various data science processing and representation technologies developed by SRK South Africa’s Mining Geotechnics and Data Services departments. This includes the application of the Australian Centre for Geomechanics (ACG) mXrap software for processing, interpreting and viewing complex data streams including seismic and blast vibration modelling.

Our various mining, civil engineering and environmental departments are constantly seeking technologically advanced solutions in conjunction with our newly established Data Services department by applying the proven developments in Data Science, Artificial Intelligence (AI), including machine learning techniques for data processing and interpretation. Our experienced geotechnical professionals – located in offices in South Africa, Ghana and the DRC – review and oversee mining project and operational activities, operating collaboratively with our extensive global network of consulting practices.

With the run in the gold price, how do you think the exploration sector will react in Ghana, but also in less explored markets like Ivory Coast, and new frontiers such as Cameroon?

ID: Investment decisions about exploration are in general not based on a sudden bullish market environment, but rather on a long-term view of the market. This, together with a host country’s national policy framework on mining, underpins decision-making – and the importance of political stability cannot be overstated.

So, with the gold price at one of its highest points in history, there is no indication that it will yield positive exploration investment in Ghana in the short-term. Other factors seem to be having greater impact. The Minerals and Mining Act, 2006 of Ghana (amended in 2015), for instance, gives leverage to investors to negotiate royalties payable to government – subject to the price and value of their investment. On-going discussions to consider changes to this specific clause have led to a ‘wait and see’ attitude being adopted in the investment community. While potential for exploration still abounds, the targets are not easily explorable. This means they will require significant capital, good geological expertise and sound techniques to ‘ground truth’ the mineralised zones.

Although Ghana is currently Africa’s leading gold producer, other gold-producing nations in the region such as Ivory Coast, Mali and Guinea seem to be booming. Reasons may include the differences in policies, but the exploration targets in question are relatively easy to prospect in comparison to current potential targets in Ghana.

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