1. business and industrial
2. mining industry

THE EVOLUTION OF THE MINING INDUSTRY - A COMPARATIVE TREND IN RELATION TO
THE SOCIO-ECONOMIC DEVELOPMENT AND THE UGLY REMUNERATION DISPARITIES –
PERSPECTIVE OF GHANA MINEWORKERS’ UNION OF TUC (GHANA)
Mr. Prince William Ankrah, General Secretary of GMWU
By the Office of the General Secretary, Ghana Mineworkers' Union of TUG (Ghana)
gmwu_gtuc@yahoo.co.uk
Overview
Ghana started mining over 100 years ago. Our peers in the mining industry in the developed
countries rode on the back of mining receipts to develop their economies. Notable among
these are the popular American, Australia and the South African examples. The California
example is by all standards the envy of the world. Mining transformed the Californian
economy drastically moving it from the most sparsely populated state in America to the most
populous one in recent times mainly due to the foresight of successive leadership and the
governance structure of the United States of America in ensuring that the economic fortunes of
California was sustained beyond mining. It is therefore not surprising that, California as a state
is classified the eighth largest economy in the world according to the Center for Consulting
Study of the California Economy in 2012. This did not happen per chance but rather as a
result of a well thought-out plan envisaging into the future that placed it in such a niche
position. The American situation became popularly known as the ‘California Gold Rush’ and
South Africa also experienced a period of gold rush which bolstered its economy to the
present levels.
Australia over the last 25 years generated almost 250 billion US dollars from mining which
has really helped the Australian economy to build the needed resilience to withstand any
shocks. It was not surprising to global economic watchers that Australia escaped the
debilitating impact of the 2008/9 financial crisis that crippled major economies around the
globe. Indeed, one fundamental thing which escaped most analysts is the stability that has
been created over the years in the Australia economy; a strategy rooted in its job market,
particularly in its mines where competitive remuneration is put on both nationals and nonnationals (including Ghanaian nationals) who receive appropriate skill-based remuneration.
The Australian government is able to generate huge tax revenues as pay-as-you-earn from
the competitive skill-based salaries of its workers. This coupled with proper management of
mining receipts has kept its economy going where other similar economies have fallen and are
struggling to recover.
In this regard, a national debate as to how mining has benefited our country becomes urgently
imperative. We need to use this platform to hold government accountable and demand a
roadmap meant to make mining and for that matter the extractive industry more beneficial to
our economy. A stitch in time saves nine approach, in our view should be the impetus towards
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this realization.
It is unfortunate that the situation in the mining sector of Ghana leaves so much to be desired.
After years of exploitation, our visionary first president Dr. Kwame Nkrumah took over the
mines and placed them in the hands of Ghanaian management. Indeed, most of those mining
companies were virtually declared non viable by our colonial masters. However, their
operations were sustained for several years until we witnessed the diversification of most of
the state owned enterprises. It also offered many young Ghanaians domiciled in those
catchment areas a source of employment and livelihood. To an extent, the mines did virtually
cater for the infrastructural development of these townships. Disappointingly, mining townships
are in the league of the unplanned ones in our country. They therefore become ghost towns
beyond mining. Akwatia, Bibiani and Prestea, among others have had their share of total
neglect after mine closures. The recent Obuasi panic that engulfed our nation emanating from
AngloGold Ashanti's decision to reposition the Obuasi mine with its associated redundancies
heightens the need for sustainable and alternative future of such mining driven local
economies. Tarkwa/Bogoso at the moment have six mining companies operating within their
catchment areas but still have haphazard developmental patterns and huge infrastructural
deficit. These pointers are factually at variance with the mining flagship economies described
in this article.
Hitherto, incomes in the mining sector were so low that most of the indigenes of the mining
towns did not want to take up jobs in the mining industry. Hence, the industry relied heavily on
our brothers from the northern part of the country for its labour. These ex-miners, who hardly
had any decent remuneration at the time the industry was under the control and management
of the state, retired as paupers.
The New Era of Mining
In the mid 1980s, when the Rawlings led administration introduced the Structural Adjustment
Programme (SAP); the sector became the leading foreign direct investment (FDI) attraction into
the Ghanaian economy. This saw the influx of private mining companies such as Bogoso Gold
Resources, Cluff Mining, Golden Ray among others which subsequently paved the way for
global mining conglomerates like GoldFieds, AngloGold Ashanti, Newmont Ghana Gold,
Adamus Mining, Perseus Mining etc into the industry. The influx of global mining capital into
Ghana’s mining sector came with it massive numbers of expatriate staff from different parts of
the world.
Around the same time, the workforce led by the Ghana Mineworkers’ Union of TUC (Ghana),
decided to change their destinies by pursuing policies and strategies aimed at improving their
living standards. The Union succeeded in getting its members’ salaries indexed to the US
dollar. This initiative was supported by two key visionary leaders (President Jerry Rawlings
and Sir Sam Jonah). The indexation was done against the backdrop that the commodity in
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trade was dollar denominated coupled with the fact that mining costing is done in the United
States dollars. Again, in 2010, the Union instituted another strategy known as ‘Agenda $500’.
This was a medium term strategy by the Union to move the minimum salary in the mining
industry from an estimated $270 per month to $500 per month by 2013 in a bid to start
addressing the huge salary disparity within the sector. These two flagship strategies, coupled
with a very detailed collective agreement benefits have not only marginally improved the
lives of mineworkers in the last decade but have also created a relative peaceful industrial
atmosphere in the mines compared with other sectors in the country.
The Mining Sector Human Capital Advantage (Home Grown)
It is worth stressing that, Ghana positioned itself well ahead of its peers in the Sub Region, in
terms of the human capital development to feed its mining sector. The first mining training
institution (Tarkwa School of Mines now University of Mines and Technology UMaT) was
established in Tarkwa in the Western Region to develop mining related skills necessary for the
sector. The nation also sponsored others to be trained in the prestigious Camborne School of
mines in UK, among others. Our traditional universities also complemented by training other
engineering and ancillary staff to feed the sector for efficiency and growth. It is worth
commending the state-owned mines including the then Ashanti Goldfields Company Limited for
the huge investments made in this direction.
As the industry grew across the world, skills became scarce in key mining countries such as
Australia, Canada, United States, Indonesia, South Africa, Mali, Guinea etc. Consequently,
mining labour market pricing assumed a global dimension and debate. Appropriate market
values were placed on mining skills across regions where remuneration systems were governed
by skills and equity principles. In other words, remuneration systems were based on skills and
competencies as against the notion of purchasing power parity and colour.
The Global Remuneration Scale
The following tables developed from data put together by miningglobal.com, a renowned
body that does research on the global mining industry gives a vivid picture of the salary
scales of various mining skills at the global mining environment.
UPPER RANGE
Skill/Job Title
Annual
Rate
(US$)
Monthly
Rate
(US$)
1
Project Director/Drilling Operations Director
400,000
33,333
2
Project Controls and Site Managers
350,000
3
Engineers
240,000
No.
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Daily
Rate
(US$)
Hourly
Rate
(US$)
Exch.
Rate
Cedi Equiv.
(Monthly)
1,235
154
3.82
127,183
29,167
1,080
135
3.82
111,285
20,000
741
93
3.82
76,310
4
Geologists
230,000
19,167
710
89
3.82
73,130
5
Metallurgists
220,000
18,333
679
85
3.82
69,951
6
Geophysicists
200,000
16,667
617
77
3.82
63,592
7
Occupational Health Safety & Env. Professionals
190,000
15,833
586
73
3.82
60,412
8
Mine Supervisors/Mill Superintendents
168,000
14,000
519
65
3.82
53,417
9
Surveyors
165,000
13,750
509
64
3.82
52,463
10
Operators/Technicians/Miners
150,000
12,500
463
58
3.82
47,694
Hourly
Rate
(US$)
Exch.
Rate
Cedi Equiv.
(Monthly)
No.
Skill/Job Title
MIDDLE RANGE
Annual
Monthly
Rate
Rate
(US$)
(US$)
Daily
Rate
(US$)
1
Project Director/Drilling Operations Director
400,000
33,333
1,235
154
3.82
127,183
2
Project Controls and Site Managers
275,000
22,917
849
106
3.82
87,439
3
Engineers
155,000
12,917
478
60
3.82
49,284
4
Geologists
140,000
11,667
432
54
3.82
44,514
5
Metallurgists
135,000
11,250
417
52
3.82
42,924
6
Geophysicists
125,000
10,417
386
48
3.82
39,745
7
Occupational Health Safety & Env. Professionals
120,000
10,000
370
46
3.82
38,155
8
Mine Supervisors/Mill Superintendents
119,000
9,917
367
46
3.82
37,837
9
Surveyors
110,000
9,167
340
42
3.82
34,975
10
Operators/Technicians/Miners
100,000
8,333
309
39
3.82
31,796
Hourly
Rate
(US$)
Exch.
Rate
Cedi Equiv.
(Monthly)
No.
Skill/Job Title
LOWER RANGE
Annual
Monthly
Rate
Rate
(US$)
(US$)
Daily
Rate
(US$)
1
Project Director/Drilling Operations Director
400,000
33,333
1,235
154
3.82
127,183
2
Project Controls and Site Managers
200,000
16,667
617
77
3.82
63,592
3
Engineers
70,000
5,833
216
27
3.82
22,257
4
Geologists
50,000
4,167
154
19
3.82
15,898
5
Metallurgists
50,000
4,167
154
19
3.82
15,898
6
Geophysicists
50,000
4,167
154
19
3.82
15,898
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7
Occupational Health Safety & Env. Professionals
50,000
4,167
154
19
3.82
15,898
8
Mine Supervisors/Mill Superintendents
70,000
5,833
216
27
3.82
22,257
9
Surveyors
55,000
4,583
170
21
3.82
17,488
10
Operators/Technicians/Miners
50,000
4,167
154
19
3.82
15,898
Data Source: http://www.miningglobal.com/top10/1103/TOP-10:- Highest-Paying-Jobs-in-the-MiningIndustry
Detailed explanation on the tables is found in Robert Spence’s article titled TOP-10:- HighestPaying-Jobs-in-the-Mining-Industry.
Comparing the global skills-based remuneration to what pertains in our industry in Ghana for
the same skills will be tantamount to comparing ‘charcoal to gold’. The pay levels of these skills
are too low to the extent that it is fueling massive skills flight from the industry especially the
very experienced and highly competent professionals to regions where they are better
remunerated. At times one wonders if it is another strategy of the neoliberal machinery.
A typical example is a twenty-five year old high-school dropout James Dennison from
Western Australia makes US$200,000 a year running drills in underground to extract gold
and other minerals. According to John W. Miller, a columnist for the Wall Street Journal, in an
article titled "The $200,000-a-Year Mine Worker: Resources Boom Fuels Demand for
Underground Labor, Spurs Skyrocketing Pay" “the heavily tattooed Mr. Dennison who started
in the mines seven years ago earning US$100,000, owns a sky-blue 2009 Chevy Ute, which
cost $55,000 before a $16,000 engine enhancement, and a $44,000 custom motorcycle.
Miller continues to state that Mr. Dennison belongs to a class of nouveau niche rising in remote
and mineral-rich parts of the WORLD, such as Western Australia State, where mining
companies are investing heavily to develop and expand iron-ore mines. Demand for those
willing to work 12-hour days in sometimes dangerous conditions, while living for weeks in dusty
small town, is huge.
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John W. Miller/The Wall Street Journal - James Dennison poses by his car
The dangerous conditions under which Mr. Dennison works are not different from the Ghanaian
mineworker who even works under harsher and more severe environments. Regrettably, the
Ghanaian mineworker is paid a pittance under the pretext of purchasing power parity logic
perpetuated by neo-liberal ideologists. An argument which in the opinion of the Ghana
Mineworkers Union does not hold water and can be described as bankrupt, to say the least.
Skills Shortage
It is, therefore, not surprising that most of the key mining skills in Ghana seize the slightest
opportunity to secure job offers in the mining rich countries and join the cream of well paid
colleagues in these countries mentioned above. The resultant effect is such that, if the mining
industry in Ghana had sought to poach some of them back home and placed international
market values on them, the reward landscape in the industry would have changed positively.
The issue that calls for debate is do we need to use union pressure to compel the mining
companies to pay what will lead to skills retention in Ghana with its attendant revenue stream
by way of PAYE into the national coffers? The answer is obviously YES because such
prompting debates are not meant for the faint hearted and docile trade union organization. It
requires well thought-out research underpinned by other internal sources of information to
challenge the status quo.
The global mining skills shortage has already caught up with us and if immediate measures
are not taken to reverse the trend, we will soon run into critical skills shortage. To buttress the
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mining skills shortage situation, Sigurd Mareels, director of global mining for research firm,
McKinsey and Co. reiterated that “the situation is not just in Australia but around the world. He
cited Canada as an example, where the Mining Industry Council foresees a shortfall of
60,000 to 90,000 workers by 2017. He emphasized that Peru must find 40,000 new miners
by the end of this decade. The Minerals Council of Australia estimates that the country will
need an additional 86,000 workers by 2020 to complement the current workforce estimated
at 216,000. The reality is that, Ghana becomes the center of attraction with its attendant
challenges if actors fail to address the issue.
Indeed Australia is ahead of its peers in ensuring fairness in remuneration between nationals
and non-nationals. For example, nationals of Philippines and New Zealand who work in the
mining sector in Australia as grader drivers at Port Hedland in Northern Australia who fly
home once a month on a $1,200 ticket paid by themselves out of their annual income of
$120,000 argue that it makes sense because they earn their market value.
The most irritating and worrying situation in Ghana is that the expatriate staff and a selected
few local top management staff have been placed on the global competitive scales in
addition to share options meant to enhance their financial fortunes and also to serve as a
retention strategy. Whereas the majority (made up of middle level senior and junior staff)
whom the Union represents, have been subjected to a race to the bottom remuneration
agenda. Consequently creating disaffection and a growing alienation among the workforce.
The economic reality is that, majority of those who when placed on their appropriate skills will
contribute heavily to our national purse through PAYE and also create the needed spending in
the mining economies with its impact on national economy are rather denied their due. The
Union has all the data relating to these salary inequities in the mining industry in Ghana and
will not hesitate to put it in the public domain. The following tables give a gist of the salary
disparity situation in the mining industry in Ghana.
Table 4: Lower and Upper Pay Ranges in the Mining Industry of Ghana in US$
LOWER RANGE
Hourly
Exch.
Rate
1,373
172
3.82
141,491
7,000
259
32
3.82
26,709
1,250
46
6
3.82
4,769
583
22
3
3.82
2,226
Hourly
Exch.
Rate
CLASS
Annual
Monthly
Expats/SVPs, EVPs, Executive Managers
445,000
37,083
Managers, Project
84,000
Senior Staff
15,000
Junior staff
7,000
Daily
Cedi Equiv.
(Monthly)
UPPER RANGE
CLASS
Annual
Monthly
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Daily
Cedi Equiv.
(Monthly)
Expats/SVPs, EVPs, General Manager
670,000
55,833
2,068
258
3.82
213,032
Management
180,000
15,000
556
69
3.82
57,233
Senior Staff
24,500
2,042
76
9
3.82
7,790
Junior staff
11,700
975
36
5
3.82
3,720
Source: Ghana Mineworkers' Union (TUCG) 2015
Key
EVP: Executive Vice President
SVP: Senior Vice President
From the table 4 above, it is evidently clear that the only class of employees in the industry
that matches the global mining pay benchmark is the expatriates and the few privileged top
Ghanaian managers. Whereas their lower range annual pay fits clearly in the benchmark,
their upper range even exceeds the global benchmark. It must be emphasized that the data
used in this analysis is only gross pay data which does not include share options and other inbuilt perks which together create a comfortable haven for those at the upper echelons of the
industry.
Interestingly, the case for the middle and operation level (senior and blue colour unionized
staff) is not only far below but completely outside the benchmark data. The senior and junior
staff who are the class of employees mostly used in the global benchmark i.e. metallurgists,
drillers, geologists, excavator operators etc are glaringly shortchanged in every sense. For
instance, whereas an entry level metallurgist in the global benchmark annual pay is $50,000,
his Ghanaian counterpart takes $15,000 representing only 30% of the benchmarked data.
The Union’s Position
The Union strongly believes that this glaring inequity cannot be entertained and is poised to
use a mature approach to address such naked exploitative tendencies in the industry over
time, although the situation requires instant rectification. The industry faces turbulent times if it
fails to recognize the need to collaborate with the Union to develop a roadmap towards
addressing this ugly situation. Our approach will be to ensure that all jobs fragmented at the
moment are well graded and delayered. This is to ensure an efficient and more productive
industry with the appropriate international values placed on every employee irrespective of
his/her nationality or colour.
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