Former Minister for Power, Dr. Kwabena Donkor, has called for a strategic shift in Ghana’s mining sector, urging the country to develop its iron ore deposits with a focus on domestic value addition rather than raw material exportation.
Dr. Donkor, who previously served as Member of Parliament (MP) for Pru East, argues that Ghana possesses significant iron ore deposits in locations including Oti, Sheni, and Opon Mansi, with additional reserves being discovered. He describes these resources as a major economic opportunity that requires careful management to avoid repeating what he characterizes as mistakes made in the gold sector.
Speaking in an exclusive interview with The High Street Journal, the mining consultant emphasized that Ghana must not replicate its approach to gold mining when developing iron ore resources. He pointed out that despite being among the world’s leading gold producers, Ghana has historically exported the precious metal in raw form with minimal domestic processing.
“What is the effort that we are putting in as a nation-state to develop these resources in a manner that does not replicate what we have done with gold?” Dr. Donkor questioned during the interview.
He noted that iron ore deposits often contain valuable by-products such as silver, enhancing the economic potential of developing a domestic iron mining industry. However, he stressed that simply extracting and exporting raw ore would fail to maximize benefits for the Ghanaian economy.
Dr. Donkor envisions establishing an integrated iron and steel manufacturing sector that produces finished products for local construction, supports industrialization, and generates export revenue. He believes this approach would retain a larger percentage of mining profits within Ghana’s borders.
“That is our next huge opportunity. The strategy is for us not to export the ore. The strategy will be for us to turn the ore into steel products for our building industry, for export, and for industrialisation,” he stated.
The former minister acknowledged that developing an iron and steel industry requires substantial capital investment. However, he expressed optimism that international financing could be secured through careful structuring of investment partnerships and ownership arrangements.
“Capital is available internationally. It’s just how we structure our involvement. If we structure it well, the benefits of iron ore, a large percentage of the benefits will be retained in the Ghanaian economy,” Dr. Donkor explained.
Energy requirements present another significant challenge for iron ore processing. Converting raw ore into steel demands intensive power consumption, which Dr. Donkor identified as a potential obstacle that Ghana must address through deliberate policy interventions.
He suggested that many countries subsidize electricity costs for their iron and steel industries, recovering these subsidies through taxes and other revenues generated by the sector. Dr. Donkor proposed dedicating a portion of Ghana’s natural gas production from offshore oil fields to power steel furnaces, arguing this would prove more economical than relying on grid electricity.
“If we were to dedicate a portion of our gas find to fire that furnaces, we have to calculate the cost. How much will it cost? It will definitely be cheaper than using grid electricity. But how cheap? And if there’s a need for subsidy, the subsidy must be deliberate. And the subsidy must be recouped from the gains of the industry in the form of taxes and other tail-end products,” he elaborated.
Looking toward longer-term energy solutions, Dr. Donkor also discussed nuclear power as a potential resource for supporting industrial development. While describing himself as a believer in nuclear energy, he acknowledged that establishing nuclear capacity typically requires approximately ten years to complete regulatory requirements and feasibility studies.
“I am a believer in nuclear power, but in nuclear power terms, the short term is about 10 years. To get all the regulatory requirements and studies done takes time. Do we have to wait?” he remarked, suggesting Ghana needs interim solutions while pursuing long-term energy infrastructure.
The mining consultant called for development of a comprehensive national mining policy that extends beyond gold to encompass strategic planning for other mineral resources. He emphasized that Ghana must approach mining sector development with greater deliberation and attention rather than leaving outcomes to chance.
“We have to take mining far more seriously. Our mining policy must be comprehensive. We should look beyond gold,” Dr. Donkor emphasized.
He characterized Ghana’s iron ore deposits as representing a second opportunity for the country to implement mining practices that prioritize domestic economic benefits. Dr. Donkor argued that with proper planning and execution, iron ore development could contribute significantly to Ghana’s industrial transformation and economic diversification goals.
