Precious Metals and Minerals Sector in Ghana: Nana Akwasi Awuah of PMMC Discusses Current Trends

Interview with Nana Akwasi Awuah, Managing Director of PMMC

Could you give us an overview of PMMC?

PMMC was first set up as a diamond marketing company sometime in the ‘60s with the mandate to buy diamonds. At that time, the diamond trade was booming and the government wanted to have some control over that precious mineral, and for that reason, set up the diamond marketing company. Over time, it also became necessary for people who were engaged in small-scale mining or artisanal mining to have a company that would be buying or promoting that sector as a commercial trade in gold. What was originally set up as the diamond marketing company evolved into what is now known as the Precious Minerals Marketing Company. PMMC is set up by an act of parliament. The company is 100% owned by the government of Ghana. When it was set up, its mandate included garding the value of precious minerals. One other function was to buy precious minerals such as gold and diamonds from artisanal miners.

We do trading, we buy and sell. We were also given the mandate to appoint license buying agents, because at the time the company was set up it was practically impossible for PMMC to have a presence in all the mining communities in Ghana. In their wisdom, they decided to give PMMC the mandate to appoint license buying agents and by extension to license people who then buy the commodity that are either the diamond or the gold on behalf of PMMC and then bring it to PMMC. That is also the basis for which PMMC issues the dealer’s license to its agents.

Another function is to promote the jewelry industry. Beyond manufacturing jewelry itself, which is a key aspect of value addition or beneficiation, we also promote the jewelry industry. Currently, we are collaborating with Ghana Standards Authority to ensure that whatever the jewelry shops advertise and sell is actually worth the value. Very recently, PMMC acquired the mandates of National Assayer in the sense that for all the good that was leaving the country, government saw that it was necessary to have an independent institution to ascertain and verify the quantities and the values of gold that is leaving.

The value of gold is dependent on two things: the weight and the purity. 24 carats, one kilogram gold is more expensive than 23 carats, one kilogram gold. Both of them are the same weight, but because of the caratage, one is more expensive than the other. The government saw that since PMMC already had that expertise, it should be empowered to check all the gold that leaves the country, thereby independently verifying the values, and with this basis the government is then able to ascertain or evaluate the tax exigible on the quantity of gold that is leaving the country. We have been doing this since 2017. We started manually, but as we speak, we have been able to digitalize that process such that just by the click of a button on my phone I am able to know the quantity of gold that is leaving the country at any point in time. Another thing is that, with a mandate to trade in gold, we are able to connect foreign investors who seek to procure gold from Ghana to suppliers right here in Ghana. We have a network of suppliers who are able to provide gold in whatever quantity that is required for whichever person who is interested in acquiring that gold.

What is your competitive advantage and what makes PMMC stand out?

The first advantage is that we provide a very secure scam-free platform for trading in the sense that you are dealing with governments. The credibility is there and with that credibility, it gives the buyer the confidence that if anything should go wrong, he/she can always come back to the government. Government is not going to be extinguished anytime soon, it is a continuum. It will be there so long as the state of Ghana exists.

The other advantage that we enjoy is that because of the number of years that we have been in this industry, we have a great deal of credibility, not only at home, but within the international community as well. When those who have been in the industry for long talk about dealing in gold, especially from Ghana, the first institution that comes to mind is PMMC. It is only those who have recently come into the trade who may not have heard about PMMC and they may not know of our credibility as well.

Besides, because we are somehow regulators in terms of the fact that whatever is leaving will still have to come through us, it gives the buyer or the foreign investor the confidence to deal with us, because even if they were to procure from elsewhere, they would still have to come through us to be able to ship or export to a country outside Ghana.

Lastly, we have a great network of dealers, or license buying agents, so sourcing the product is not a challenge because these agents by the terms of their license are supposed to purchase on our behalf. Whatever quantities that is being requested for is only a matter of talking to these agents to make those quantities available, and our network of dealers or license buying agents stretch all over the country. It is not restricted to any particular region.

Being the regulator, what is your general assessment of the precious metals and minerals sector in the country?

The future of the sector is very bright. There is still a lot of untapped potential. Right now, focus is being placed on value addition. The narrative is being changed. Where you had a lot of the raw material leaving the country, it is now being reversed in the sense that, currently, there is a gold refinery which has been established through a private public partnership initiative by PMMC and a foreign investor. That gold refinery has a capacity of 400 kilograms of gold per day, and it uses state of the art technology for the refinery process, which is both aqua regia and then electrolysis. So there is gradually a shift from exporting raw minerals in the form of gold doré to processing or value addition. So the future of the sector looks bright.

Beyond that, we are also putting in place a system where we are able to trace the chain of custody of gold right from the mining site to its final destination. This is the traceability system that the World Bank is assisting the government of Ghana through PMMC to establish. The work has already started, and we are hopeful that by midyear 2023, we should be able to complete that assignment. We are getting to a point where in terms of keeping up with international standards on the trade in precious metals, PMMC is leading the charge and the entire industry within Ghana is equally going to benefit and come along.

What is your take on the issue of galamsey?

Galamsey, otherwise known as illegal, artisanal mining, is a major concern for us, as it is for the government as a whole. Two weeks ago, I had cause to write an article for publication in the newspapers about the harmful effect of galamsey on government value addition initiatives. Government is bent on promoting value addition to our mineral resources, including gold. I have also mentioned the existence, for instance, of a gold refinery, and talked about what is being done in terms of jewelry manufacturing and all of that. The truth of the matter is that a key component of value addition is responsible sourcing. If you look at the OECD guidelines on responsible sourcing of precious metals or even the LBMA requirements – which government is trying to get the LBMA certification for the refinery – responsible sourcing is a sine qua non to acquiring those certifications.

The concept of responsible sourcing essentially means that you are sourcing the products or the raw material from a place which is devoid of environmental degradation, child labor, conflict, human rights abuses, etc. When you have all of that in play, it means that galamsey poses a big threat to those value addition efforts, meaning that you are unable to take the box when it comes to responsible sourcing, or it threatens your ability to meet the responsible sourcing requirements. We are equally concerned about galamsey and we have at all times supported the fight currently being reached by government against it.

This fight is in two forms. The first is through regulatory enforcement, and then the second is reformative. Enforcement in the sense that there is a climb down on illegal miners and then reformative in the sense that illegal miners are being educated as to how they should go about their mining practices. There are reforms in the licensing procedure for small-scale miners: it has been digitalized now and the online application is there. The recent one is the recognition of those who are mining responsibly and in a sustainable manner through the National Small-Scale Mining Awards, which PMMC is happy to chair. We are very concerned about it, but we are also contributing towards sanitizing the sector through this traceability system, which we have been assisted by the World Bank to develop.

Are there other projects that you are involved in as an institution?

Beyond traceability, we are looking at training women in jewelry manufacturing and we are also extending support to a group of women up North who are doing rock mining. They reached out to us and asked for help, which we have agreed to provide. I intend to visit them to ascertain exactly what their needs are, and then we would see how we can put in place the necessary interventions to provide the kind of support that they require. Gradually we are moving from an export-based system where we are shipping out all the gold doré to a position where we are creating value in the country through value addition initiatives that the government is pursuing.

With the refinery, have you started the value addition, or is it in process?

The refinery has gone through its test phase. It is officially awaiting commissioning by his Excellency the President so that work can officially commence on it.

What is your vision for the institution in the next three to five years?

I want to see a PMMC with presence all over Ghana and outside of the country. PMMC should be the go-to institution for the procurement or responsible sourcing of gold in Ghana. We are currently working on that, and I hope that with the support of key partners and stakeholders, we will be able to achieve that vision.

What inspires you to work in this field?

I believe that minerals are gifts from God to his people. If a country like Ghana is blessed with mineral resources, it is absolutely important that we harness every benefit that it can bring to the people. I believe that we can earn more than we are currently doing, because if you pursue value addition, you could be earning 3, 4, 5 times or even more than sending out raw gold every day. We are currently working to promote value addition in all spheres, right from the refinery stage to jewelry manufacturing, to other articles of precious metal or gold. This is what keeps me going, every day. When I wake up in the morning and I am planning my day, I ask myself: “what step can I take today in order to achieve that vision?” At the end of the day, before I go to bed, I ask myself “was I able to take that step?” If the answer is yes, I am satisfied. If the answer is no, the following day, I get up again and take that step.

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