Ghana to end unprocessed mineral exports by 2030

Ghana, Africa’s largest gold exporter and a major producer of minerals such as manganese, bauxite (pictured) and diamonds, has announced plans to end exports of unprocessed minerals by 2030, as African countries increasingly seek ways to capture more economic value from their natural resources.

Speaking at a mining conference in Accra on 19 October, Ghana’s president John Mahama said, “I’ve set a clear goal that by 2030, raw minerals should no longer leave our shores.”

“Our bauxite, manganese, iron, lithium and other minerals must support processing and industrial development here at home,” he added.

Africa has emerged as one of the world’s most strategically important markets for critical minerals, and is believed to be home to 30% of critical mineral reserves globally. Minerals such as manganese, of which Africa accounts for more than 75% of global production, are vital for the production of technologies such as electric vehicle batteries and are therefore seen as essential for the green transition.

Ghana joins other African nations

Despite this, many African countries have struggled to capture the full economic value associated with critical minerals, which are mostly exported raw for processing and manufacturing overseas. Ghana would join a growing cohort of African countries, among them Zimbabwe, DRC and Namibia, which have also announced export restrictions on raw minerals. 

Earlier this year, Hanan Morsy, deputy executive secretary and chief economist of the UN Economic Commission for Africa, stated that the continent captures less than 5% of the associated value added from critical minerals. The African Development Bank (AfDB) has suggested that, by processing minerals domestically, the continent could generate an additional $24bn in annual GDP, boost annual exports by $32bn and create 2.3m new jobs.

However, some analysts are sceptical that export bans will help achieve this goal. Tresor Chovu, founder and CEO at Temple Fortune Capital, a mining-focused investment and advisory firm, tells African Business that “good intentions do not necessarily lead to good results.”

“In order to be able to process minerals successfully, you need a stable power supply, you need the technology, you need the workforce and people who are able to operate the technology,” he says. “And then you need local ownership and people that either have the capital or the partnerships with international companies to set up processing plants. After that you need to organise the supply chain.”

“I suspect they are giving themselves four years to get these prerequisites in place, but it is a very difficult target to meet.”

Chovu also suggests the ban could prove to be counterproductive by potentially deterring foreign investors from setting up operations in Ghana. 

“It could have an impact on foreign direct investment and investor sentiment, especially for newcomers who want to enter Ghana and will now have to consider the cost of processing as well as mining,” he says. “Existing international mining companies will also have to get something back in return if they are going to set up processing plans in Ghana: they will want tax breaks and the like.”

The Organisation for Economic Co-operation and Development (OECD), an organisation of 38 mostly wealthy countries, has also warned about the potential consequences of such measures. “Export bans and quotes are technically not permitted under WTO [World Trade Organization] rules unless an exemption is met,” the organisation noted in an 18 October policy paper, while noting that “export restrictions impact the domestic mining sector of producing countries in several ways.”

“First, they lower export volumes, which impacts export earnings and government revenues from the sector. Second, they can push down domestic mineral prices to below international prices (due to lower demand domestically), which benefits local processors who can buy minerals inputs more cheaply, but harms mining companies… third, such restrictions can also prompt technological innovations away from minerals subject to export restrictions or other supply chain risk.”