A top mining executive advocated here?on Thursday?an effective collaboration between governments of resource-rich countries and industry stakeholders for a win-win situation.
Nick Holland, group Chief Executive Officer (CEO) of Goldfields Limited, a South African-based international mining firm, said in the face of decline in margins (profits) for mining firms and the overhyped prospects of the industry, synergies, rather than nationalization of the mining industry, would save the situation.
?? Speaking on ?Resource Nationalism: How to Grow, Not Shrink, the Pie?, Holland conceded that it was the responsibility of governments to seek to earn enough from mineral resources extracted in their lands for the development of their people.
?? He however argued that the hugely profitable picture painted of the industry by mining firms was not real.
?? ?There is therefore the need to align national interests with those of investors by collaborative partnerships with miners who are better able to operate and develop ore bodies and who are good social partners,? added Holland.
?? ?At first glance, it might appear there is a bigger slice to take. Our industry has made this pie look more attractive than it is. In reality, margins and returns from mining are in decline,? he noted.
?? Holland cautioned that, with existing mines under pressure from price decreases and cost increases, greater taxes would aggravate the problem for the mines.
?? This, he noted, would jeopardize further investments and ultimately result in the loss of jobs and long-term government revenues.
?? ?What governments should be targeting is the growth in Gross Domestic Products (GDP) catalyzed by mining, as this is the most effective way governments can improve upon the quality of lives of their people,? he said.
?? ?GDP growth is essential for governments? targeting of effective transformation. Mining punches above its weight with its GDP multiplier effect, creates jobs and uplifts communities,? he added.
?? To sustain the industry and all of its benefits, therefore, Holland urged governments to put in place stable, competitive tax systems that would allow equity investors to earn competitive risk-weighted returns.
?? In addition, he urged governments to ensure that full impact of mining was taken into account when assessing economic viability and social acceptability.
?? This, according to him, requires a good understanding of the multiplier benefit as well as the full costs of mining.
?? The president of the Ghana Chamber of Mines, Daniel Owiredu, observed that Resource Nationalism had assumed and retained the number one risk ranking on the side of investors and operators.
?? He cautioned however that, regardless of how intimidating the hunch of nationalizing resources might be, the mining fraternity in Ghana, together with the government, should rather explore synergies and defy all odds regarding nationalization of resources to spur development.
?? ?Mining investment won?t go away as long as there is the prospect to make profit,? said Kofi Bentil, Vice President of local think-tank Imani Ghana, thus countering the assertion that higher taxes would cause mining investments to go away.
?? He advocated a review of the mining laws to ensure that substantial portions of resources from mining were dedicated to the development of mining communities.
