The role of contractors in the Ghanaian mining industry - a case study at Ashanti Goldfields Company Limited

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Ashanti Goldfields Company (AGC) Limited, Africa’s largest private mining company outside South Africa is set out to transform itself from a gold producer with a single mine to a group with several mines. As a result of pressure on gold price, being cost-competitive is essential if AGC is to remain not simply mining but to maximise returns from its huge investments. To this end contracting is playing a significant role in the operations of AGC. The mine now evaluates contractors during the tender phase to ascertain, in addition to their cost-effectiveness, the contractors’ commitment and performance towards health and safety. The contractors used comply with all the procedures on the mine including, inter alia, induction on the mine, equipment standards, training of safety representatives and compliance with safety and environmental programmes. The selected contractors perform tasks that include underground development, exploratory drilling, top soil removal, load-haul-dumping and supply of explosives. They have been found in most cases to be cost-effective and provide the mine with short-to medium-term benefits. This research opens up with why contracting was not phenomenal up to the late 1980’s in Ghana, particularly at AGC. It then addresses the advantages and disadvantages to the company as a result of the use of contractors, looks at the future of contracting at AGC and then concludes that the latter have established themselves as a necessary and integral component of AGC’s operations. Competitive bidding, review of certain contracts, contractor’s participation at the planning stages of projects and partnering relationship with contractors are recommended to give AGC maximum benefits of contracting.
A thesis submitted to the Board of Postgraduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirement for the award of Postgraduate Diploma in Mining Engineering, 1997