Former Energy Minister Dr. Kwabena Donkor has proposed the revival of the State Gold Mining Corporation (SGMC) under a new structure that would allow the Ghanaian state to retain ownership of strategic mining assets while outsourcing operations to capable local companies.
The proposal forms part of his recommendations regarding the future of the Tarkwa Mine after the expiration of the current lease.
According to Dr. Donkor, Ghana should adopt a modern asset-ownership model that separates ownership from operations, allowing the country to capture greater value from its mineral resources without repeating the mistakes of past state-run mining enterprises.
State Should Own the Asset, Not Run the Mine
Dr. Donkor stressed that the state should avoid direct involvement in mining operations. He acknowledged that the previous State Gold Mining Corporation struggled operationally and ultimately became one of the assets divested under Ghana’s economic reforms.
However, he believes the failures of the past should not prevent Ghana from reclaiming ownership of strategic mining assets.
Under his proposal, the state would own the mining asset while private Ghanaian operators undertake day-to-day mining activities.
A Call to Revive SGMC or Create a State Gold Mining Company
Dr. Donkor suggested that the State Gold Mining Corporation could either be revived if its enabling legislation still exists or re-established as a commercial entity if the original law has been repealed.
Unlike the old state-owned mining structure, Dr. Donkor envisions a highly streamlined organisation focused solely on asset ownership and oversight.
According to him, the new company should operate with a very small workforce. He suggested that the entire entity could function effectively with fewer than 50 employees.
Its role would include strategic planning, oversight, monitoring contracts, and protecting the state’s interests rather than managing mine operations.
“I recommend strongly that the previous owner, State Gold Mining Corporation, must be revived. But in a limited capacity to be an asset owner and not an operator. And this is consistent with current practise,” Dr. Donkor noted.
A key justification for the model is that local companies are already performing much of the operational work in large-scale mines. Dr. Donkor noted that many Ghanaian contractors currently provide mining services to foreign-owned mines and possess the equipment, technical expertise and managerial competence needed to undertake mining activities.
Under his proposal, these same contractors would continue carrying out the actual mining.
Mirror the Existing Gold Fields Structure
Dr. Donkor argues that his proposal would not radically alter the operational structure currently in place in the large-scale mining companies operating in the country.
Instead, it would largely replicate the existing arrangement under which mining operations are subcontracted while ownership remains elsewhere. In this case, ownership would simply shift from foreign investors to the Ghanaian state.
The contractors currently operating in the mines could continue performing the same functions under contracts awarded by the state-owned asset company.
He clarified that the proposed State Gold Mining Company would also be responsible for developing long-term strategic plans for the asset, while local companies already running the operations will maintain the status quo.
How Capital Would Be Raised
One concern often raised regarding local ownership is financing. Dr. Donkor dismissed suggestions that access to capital would be an obstacle.
Under his proposed arrangement, contractors would raise financing from commercial banks, development finance institutions, regional lenders and capital markets.
The state-owned asset company would provide guarantees based on future production and cash flows. “The gold itself becomes security,” he explained.
Potential financing sources, he noted, could include local banks, international banks, regional financial institutions and development finance institutions such as Afreximbank.
A New Chapter for Ghana’s Mining Industry
For Dr. Donkor, the proposed revival of the State Gold Mining Corporation is ultimately about aligning ownership structures with Ghana’s current capabilities.
With Ghanaian engineers, managers and contractors already running much of the industry’s operational activities, he argues that the state can confidently reclaim ownership while allowing the private sector to continue delivering efficiency and technical expertise.
The result, he believes, would be a modern mining model that keeps more value within Ghana while maintaining productivity, attracting financing and preserving operational excellence.
