- Minerals Commission Targets Low Wages and Risky Bids in Mining Contractor Shake-Up
Ghana’s Minerals Commission is developing minimum wage and tender benchmarks for mining contractors as government tries to prevent its local-content drive from becoming a race to the bottom on pay, safety and commercial viability.
The intervention follows concerns that some contractors are bidding aggressively for mine work and then struggling to cover operating costs, while workers fear that the shift towards contract mining could leave them with lower wages and weaker job security.
“The regulator does not want people to be worse off under contract mining,” Ben Birch-Mensah, the Commission’s director of local content, told Reuters.
The planned framework comes as Ghana pushes mining companies to transfer a greater share of core operations to locally owned businesses.
Since January 2025, miners have been directed to move surface activities including blasting, loading, hauling and dumping to Ghanaian-owned contractors, while underground operations are expected to be handled through joint ventures with at least 50.00% Ghanaian ownership by December 31, 2026.
The policy forms part of a wider effort by resource-rich African economies to retain more of the value generated from minerals rather than allowing most high-value services and profits to leave the country.
But the policy has exposed a difficult trade-off between localisation and commercial sustainability. If Ghanaian contractors secure more work but do so by submitting bids that cannot support proper wages, training, maintenance and safety systems, the country could achieve local ownership on paper while weakening the quality of mining operations.
Birch-Mensah said the Commission is therefore “putting together a baseline so that contract miners cannot pay employees below a certain threshold.”
The same logic is being applied to tendering. The Minerals Commission is preparing minimum bid benchmarks intended to stop firms from pricing contracts below sustainable operating levels merely to win business, after instances in which aggressive underbidding left contractors unable to meet their costs.
A committee is expected to work out the details, including how the thresholds will be determined and applied across different types of mining contracts.
The economic argument is straightforward but delicate. Contract mining requires expensive equipment, fuel, maintenance, skilled labour, insurance, safety systems and working capital, meaning a bid that appears cheaper to a mine owner can ultimately become more expensive if the contractor cuts corners or fails to perform.
A sustainable tender floor could therefore protect workers and mine owners from the downstream consequences of unrealistic pricing, but it will have to be carefully calibrated to avoid simply raising costs or shielding inefficient contractors from competition.
The Ghana Chamber of Mines has opposed making contract mining compulsory, arguing that mine operators should retain the freedom to decide whether activities are performed internally or outsourced.
Yet the Chamber supports efforts to address destructive underbidding and has warned that contractor competition can become dangerous when price becomes the overriding consideration.
“If people keep undercutting themselves, they may not have the resources to undertake the work, they won’t pay workers properly, they won’t train people, and safety is compromised,” Chief Executive Ken Ashigbey said.
That warning gives the proposed rules a significance beyond labour relations. Mining is a capital-intensive and high-risk industry, and contractors that cannot finance training, equipment maintenance or proper supervision may create operational and safety risks for the entire mine. Mr Ashigbey said contractors account for a significant share of mining incidents, while the Chamber is itself considering contractor classifications and minimum bid thresholds to help curb underbidding.
The more difficult policy question is how Ghana avoids replacing one form of exclusion with another. Tender floors set too high could make it harder for smaller Ghanaian firms to enter the industry, while wage thresholds that are poorly designed could impose costs that less-capitalised contractors struggle to absorb.
The stronger model would combine minimum commercial standards with access to finance, equipment, training and business-development support so that local firms compete through productivity and technical capability rather than simply through cheaper labour.
That becomes particularly important as the December 2026 compliance deadline approaches. Birch-Mensah described the deadline as “non-negotiable” and identified Newmont, Zijin and Ghana Manganese Company among businesses that had yet to comply with the localisation directive at the time of the Reuters interview; the companies did not immediately respond to requests for comment.
The coming months will therefore test whether the Commission can enforce the policy without disrupting production or creating a shortage of contractors capable of taking over complex mine operations.
For Ghana, the deeper objective should be to build mining-services companies capable of competing not only because regulation reserves work for them, but because they can perform to international technical, commercial and safety standards.
The country’s gold industry generates substantial expenditure on drilling, blasting, haulage, engineering, maintenance and other services, and retaining more of that spending domestically could create a stronger industrial base around mining.
But local content becomes transformative only when Ghanaian firms accumulate equipment, management expertise, capital and intellectual capability that remain valuable even without regulatory protection.
That is why the proposed wage and tender floors could become one of the more important tests of Ghana’s localisation strategy. If they prevent contractors from winning business through unsustainably low bids while protecting workers from deteriorating conditions, they could help create a healthier domestic mining-services industry.
If they are arbitrary, difficult to enforce or detached from real operating costs, however, they could reduce competition without fixing the deeper financing and capability constraints facing local contractors.
The Minerals Commission’s intervention therefore shifts the debate from a simple question of who owns a mining contract to a more demanding one: what kind of Ghanaian contractor is the policy trying to create? Local ownership that produces poorly capitalised businesses, weak wages and compromised safety would deliver little of the structural transformation government is seeking.
The real success of the policy will come when Ghanaian contractors can pay competitively, operate safely, reinvest in equipment and skills, and eventually win mining work across Africa because they are commercially strong not simply because the law requires mine owners to hire them.
