Economic evaluation of small scale salt mining projects in Ghana – a case study

Abstract

The marine salt mining industry has about 20 Small Scale and over 120 Micro-small scale projects scattered over the coast of Ghana. With oil find, Ghana can produce over 6 million t/yr of salt worth over US$1.2 billion and overtake gold at US$0.73 billion. This study investigates the economic viability of the small scale salt industry and suggests ways to make it more economical. In this study, relevant Ghanaian legislation and established technical data from operating Small and Micro-small Scale mines in Ghana and abroad was used to determine the economic viability using Net Present Value (NPV) and Internal Rate of Returns (IRR) as profitability indicators. The results infer that unless government support with co-operative iodisation plants and produce buying centres, these Small and Micro-small scale salt projects will at best operate at breakeven, have almost 100% risk of failure and be sensitive to revenue, operating cost, capital investment and interest rates.