Mining firm Gold Fields operates two mines in Ghana – Tarkwa and Damang Mines and it recently went into a joint venture with Asanko Gold. The company recently launched its 25th anniversary in Ghana, with Mr. Alfred Baku, the firm’s Executive Vice President and Head of West Africa is expected to lead it into its new phase of development and expansion.
In this interview, Mr. Baku shares some insight about the company’s dealings in Ghana and plans for the year. He says he wants to grow the company’s output to 1 million ounces per annum.
How would describe the past 25 years in Ghana?
It has been exciting, brilliant because we have done a lot over that period. We have ensured that at least 70,000 employment opportunities are always available. In terms of our host communities, we have developed the host communities through our foundation. We have set aside bursaries and scholarships and out of which we have been able to churn out doctors, accountants, among other professionals.
I would say the past 25 years have been brilliant if you look at how much we given back as dividends to the shareholders, including the Ghana government it is approximately GH¢1 billion.
Financially, we’ve paid around US$1 billion in dividends to shareholders, since the beginning of our surface mining operations in 1998. Of this amount, the Government of Ghana, having a 10% ownership through a free-carried interest, has earned in excess of US$100 million in dividend payments. In addition, Gold Fields has paid over US$1.2 billion directly to the Government in corporate taxes and royalties. Let me hasten to add that even though we’ve been around for 25 years, the first three to five years was spent developing the mine.
How are the two mines (Tarkwa and Damang) performing?
Operationally, we have turned the low grade Tarkwa deposit into a flagship mining operation that delivers returns to shareholders, including the Government of Ghana, year-on-year. The Damang mine, which was on the verge of collapse, was given a fresh breadth of life with a US$1.4billion investment approved by the Gold Fields Board in 2016.
Our Tarkwa and Damang mines create over 7,000 direct and indirect jobs annually. Even with a conservative multiplier effect calculation, we positively impact the livelihoods of between 70,000 and 100,000 people year-in year-out, mostly within our host communities and along our supply chain.
Your decision to do contract mining at Tarkwa was met with resistance from the Mineworkers Union at beginning of this year, why?
We believe in sustainability and we actually review our business models every on and then. And where we were heading to, we didn’t see light at the end of the tunnel, so changing the business model was the only way to sustain our operation.
This however, brought an impasse between us and the union, but thankfully, it is all over now. The union has withdrawn the case from court. We have started the contract mining and the good news is that we actually estimated that about 80 percent of the people affected were going to be rehired but as we speak, we have exceeded 85 percent.
The remaining 10 – 15 percent are people who said they have had enough of mining and therefore, do not want to get back into mining.
The change in business model is going to give the country, host communities and the shareholders more benefits.
How was your performance in the first quarter of 2018?
The performance in the first quarter has been great for the two operations. At Tarkwa, we exceeded our target or budget and at Damang, we also exceeded our target in terms of production, cost and financials.
So, we have a very good year ahead of us, though I can’t give out figures now.
What does the future hold for Gold Fields Ghana?
With the ongoing optimisation of our operations, our focus on exploration, and the extension of our footprint in Ghana through our recent joint venture with Asanko, we see a Gold Fields that is poised for greater things in the years ahead.
The future is exciting because we have also lined up a lot of exploration activities. We believe that there is so much potential of the lease that we operate. We have set aside huge sums of funds for exploration.
Also, we recently entered into a joint venture with Asanko and we believe that is going to increase our footprint in Ghana. We will be able to give more opportunities in terms of employment, royalties and corporate taxes and more benefits to the host communities as well.
Our vision, with my team is to grow the region to 1 million ounce per annum in the next two to three years. We are currently doing 7,000 with the current mines. Even with Asanko, we will not be able to get that but we will be very close. So, we need maybe another mine to get us there.
So, at the moment we are looking in country and outside Ghana’s shores as well for expansion. But our focus is more within Ghana.
While we look back to our 25 years of existence in Ghana with a huge sense of pride, we are even more optimistic about the future. We see a Gold Fields that is poised for greater things in the years ahead.
Mr. Baku’s profile
Mr. Baku first joined Gold Fields Damang Mine in 2002 as Mine Manager and a member of the senior management team.
He was then appointed as General Manager of the Damang Mine in 2008, General Manager of Tarkwa Mine in 2010, and subsequently VP of Operations for both Mines.
In 2013, Alfred was promoted to Senior Vice President for West Africa; becoming a member of Gold Fields Group’s Executive Committee.
And in February 2014, he was made Executive Vice President and Head of the company’s West Africa region.