By Francis Tandoh
An Extractive Industry (EI) expert in Ghana is urging the government to review the country?s stability agreements as pertained in the mining industry.
Boa Kwaku Amponsem of Boaz & Associates said here on Wednesday at the on-going Regional Extractive Industries knowledge HUB (REIK HUB) at the Kofi Annan International Peacekeeping Center (KAIPTC) in Teshie, near the national capital.
He emphasized the number of years contained in the stability agreements the Ghanaian government has entered into with two mining firms; AngloGold Ashanti (AGA) and Newmont Ghana was too long.
This Amponsem observed, would make it possible for the companies to make so much profit at the expense of the West African country.
?I believe it is not having stability agreement that is the problem. The problem has to do with the length of time that is contained in such agreements. It is therefore important for the government to study the feasibility reports of companies well before such agreements are reached.
The mining companies themselves per their own feasibility reports normally have between 4 to 5 years within which they can recover their investment. Giving them 20 to 30 years is just too much. I believe between 5-7 years is a reasonable timeframe worth considering,? he remarked.
Stability agreements have currently become a major in the Ghanaian mining industry, with major players seeking to conclude them with the government.
AngloGold Ashanti, which came as a result of a merger between AngloGold and Ashanti Goldfields Limited as well as Newmont Mining Corporation, are two mining firms that have stability agreements with the Ghanaian government.
Ghana?s president John Dramani Mahama recently expressed worry about stability agreements signed by successive governments and the mining firms.
He argued such agreements which were signed for 20 years and beyond were not favorable to government since the players would continue to receive the same amount of royalties, even if prices of such commodities saw an upsurge in the world market.
It is estimated that the African countries lose about 50 billion United States dollars every year on account of the illicit financial transfers from the continent and therefore needed some effective monitoring system to stem the flow.
President Mahama attributed the huge financial transfers out of the continent to the retention accounts of various countries that were normally outside the countries in which they operated and called for concerted efforts to deal with local banks to strengthen their capacities.
Subsequently, the country set up a committee to review all stability agreements between the Ghanaian government and mining firms.
Ghana?s review comes against the backdrop of a surge of resource nationalism across Africa as governments aim to extract move revenue from a sector that has failed to translate mineral wealth into broad prosperity. Enditem.