How do you describe Newmont Ghana and its operations?
Newmont has two gold mining operations in Ghana, the Ahafo Mine in the Brong-Ahafo region and the Akyem Mine near New Abirem. In 2002, Newmont secured an operating position in Ghana for USD500 million that has grown to a total investment of USD3.4 billion today. We account for 32% of Ghana's gold production. The Ahafo operation began production in August 2006 and Akyem in 2013. The two operations have produced more than 7 million ounces of gold, and the region still remains highly prospective. We have also established two development foundations for our host communities funded with USD1 per ounce of gold produced and 1% of net profit from each mine. These foundations are led by the community and funded wholly by Newmont. We have invested about USD37 million into these over the last decade, from which various community and infrastructure development projects have been completed and handed over to the host communities. Over the same period, we have also paid more than USD1.1 billion in taxes. In 2017, our Akyem operation was named the best company in Ghana by the Ghana Investment Promotion Center for the second consecutive year.
What is Newmont's current growth strategy in Ghana?
We currently have two growth projects in Ghana, the Subika Underground and the Ahafo Mill Expansion. Subika Underground started production with the first ounce of gold produced in June 2017, and commercial production is slated for September 2018. The Ahafo Mill Expansion will start commercial operations in 2H2019. These projects will generate between 225,000 and 300,000 ounces of combined gold per year. We have conducted various studies to further advance underground potential in the region. Our next growth project, Ahafo North, will come up for a full funding decision in 2019. If approved, the project will consist of nine deposits over a 14km strike length and is located about 30km north of our current Ahafo operations. Overall, we have a total of 12.8 million gold ounces in reserves and an additional 6.8 million gold ounces in resources in Ghana.
Are you considering regional expansion as well?
Currently, our expansion efforts are focused mainly on Ghana. Though, we see many opportunities to grow in the region and are conducting exploration in Ethiopia, where we have been conducting preparatory work for a number of years and have recently started to see encouraging results. However, it is still too early to make any firm predictions at this point. While expanding beyond Ghana is important, we look at a number of different factors before we make a decision to develop a gold mining operation in a new country. We look beyond technical feasibility to issues of safety, political stability, contractual certainty, infrastructure, accessibility, and workforce availability to help guide our investment decisions. Our growth investments rely on our country, social, infrastructure, environmental, and economic risk analyses to help assess our prospects.
What is your strategy with regards to contractors?
We perform our core business activities ourselves and use contractors as business partners to supplement where needed, particularly in the development of new projects. We evaluate contractors based on a number of criteria: safety track record, quality of service, service delivery, and their alignment with our values of integrity, responsibility, and sustainability. We do not treat contractors differently; we see them as business partners, and it is extremely important that they align with Newmont's purpose and values.
What measures and policies would you like to see from the government to enhance operators like Newmont in Ghana?
We recognize that the government is committed to fostering a business-friendly environment to spur investment, job creation, and economic development. However, most importantly for us as a mining business with potential to grow, we seek a predictable regulatory framework and a permitting process that will encourage increased capital investment. It is important for us to be able to convince our shareholders of the long-term sustainability of business here.