SEMS Exploration discusses the mining sector in Ghana.
SMS: SEMS Exploration has benefited from an ongoing industry-wide boom since 2009, through which we have been able to consolidate our offices around West Africa. Most importantly, we have been able to consolidate a very strong technical team; we are now hoping to expand the geographic coverage of the company across the region and continent as a whole. Even with the boom, the industry has slowed down in the past several months and it has been a struggle to survive for us just as much as everyone else; the best way to for us to survive is to spread our wings.
Despite the recent boom in West African mining, globally we have seen an economic downturn and a drop in the gold price; how have you seen this play out in the region?
SMS: The economic downturn and drop in gold price have indeed hit West African mining activity very hard. Since the middle of 2012 we have seen a significant drop in investment in West Africa because of security concerns, a third factor contributing to decreased activity. There has been some negative news coming out of the region from a security perspective, particularly in Mali, but this has since stabilized. SEMS has been able to maintain our team in the region and the sector is working to regain investor confidence.
Miners can be quite hesitant to adapt to new technologies, often preferring to do things the ‘old fashioned’ way. What opportunities do you see for innovation in the industry, and what is SEMS doing by way of technological innovation?
SMS: Many clients certainly are hesitant to adopt new technologies, but we have always tried to emphasize that besides bringing in profits, our role here is to develop the region as a leader in the mining industry. It is vital to raise the standards of service and technology that foreign investors will find here. To this end, we are looking at a great deal of new technology to incorporate into our work. We are particularly excited about the use of unmanned aircraft. Small drones that can carry out airborne surveys allow us to provide these airborne surveying services at a fraction of the cost they are currently available for.
To what extent have you been able to incorporate local knowledge into the team at SEMS?
SMS: It would be impossible for us to label ourselves a local company without having local staff. Ghana has a long history—over 100 years—of mining, and SEMS is particularly proud of having local staff in leading positions across the region. Our business model revolves around establishing ourselves well enough that anyone coming into the region can turn to us for services beyond those we advertise; local staff is key to this. When we do bring in expatriates, they are residentially based in-country and spend 11 months of each year here. As much as we try to draw on local talent for our staffing needs, we feel it is equally important that the expatriates we rely upon integrate with the local communities as much as possible.
Another good example of how SEMS is trying to promote improved skills and technology in the industry is through our MapInfo software training. For over five years, SEMS has been an accredited partner to Pitney Bowes. We were the first accredited training center in Africa for the MapInfo suite of software, which we offer at our offices in Ghana, Burkina Faso and Cote d’Ivoire. We do sales, maintenance and training programs for MapInfo. We run these programs in French and English, either here in the office or at client sites if they have groups of six to eight people.
What are some of the challenges to doing business in Ghana as compared to the rest of the region?
SMS: Ghana has numerous advantages, particularly its infrastructure and qualified workforce. Perhaps one of the biggest aspects working against Ghana is its history in the mining sector. It is a very mature market relative to the rest of the region, which means we are seeing less grassroots and junior-level exploration projects. All of the major mining companies—Newmont, Goldfields, AngloGold Ashanti—are here, but junior presence is significantly less. Also, as the industry matures further, certain regulations get tightened up. The involvement of the Environmental Protection Agency (EPA) in particular has become greater over the past few years. Though this is a good thing and shows respect for environmental regulations, the level of scrutiny companies have to comply with makes it slower and less cost-effective for smaller companies to operate. Ghana needs to work at keeping the system efficient and fast-paced.
What are your expectations for Ghana’s exploration sector in the coming year?
SMS: There are several issues Ghana needs to resolve before we can expect anything from the exploration sector. Chief among these is the amount of artisanal activity throughout the country. To this end, there is a renewed effort on behalf of the government to clamp down on these activities and this will help to legally establish smaller-scale mining activities owned and run by Ghanaian business people.
Many of the current projects in Ghana are funded out of Europe and elsewhere. When the global market takes a turn such as this, there is a great opportunity for private investors to acquire properties. A significant proportion of our work now is being funded through private groups. Ghana still needs to clean up its mining regulations in order to keep pace with other regionally attractive destinations such as Burkina Faso and Cote d’Ivoire; we expect to see an increased focus on doing so from the government.
This interview was conducted as part of the research conducted on African mining jurisdictions by Global Business Reports (GBR) as part of our partnership with African Mining Indaba LLC. The aim of this partnership is the production of the single most comprehensive intelligence report on the continent’s mineral sector. The Official Mining in Africa Country Investment Guide, will be launched next February 2014, as the only official publication providing country-specific information at Africa’s top mining event, the 2014 Investing in Africa Mining Indaba™ held in Cape Town, South Africa.