Mining investors want Ghana to remove taxes on exploration

gold mining
gold mining

Mining investors see Taxes including Value Added Tax (VAT) on exploration activities in Ghana as one of the key disincentives killing investment in exploration in the country, an official has said.

Sulemanu Koney, Chief Executive Officer (CEO) of mining industry professional body, Ghana Chamber of Mines, said late Thursda
although Ghana’s potentials to continue mining are immeasurable, as mineral deposits abound in the country, the only thing hindering and explosion in discoveries is the lack of adequate investment into Greenfield (wholly new field) explorations.

Speaking to the media late Thursday at Kenyasi, near Sunyani, 400 km north of the capital where Newmont Ghana limited, subsidiary of Newmont of America is at an advanced stage of commissioning its maiden underground mining project at the Ahafo Mines, Koney said Ghanaian policy makers seems too comfortable at the country’s position as second largest gold exporter in Africa and the revenue flowing that.

He pointed out that policy makers don’t seem so keen on creating or deepening the conducive environment for fresh investments into green-field mining explorations.

“Ghana can mine at this current rate for more than 400 years, but there is the need for investment into green-field explorations, to ensure that more new discoveries are made. So it is left for government to remove hurdles to exploration. Government must for instance remove taxes especially the VAT on drilling and laboratory services to attract local and foreign investors into new fields in the country,” Koney stated.

In 2016, mining contributed 16 percent of all revenue collected by the Ghana Revenue Authority (GRA)with an amount of 1.64 billion Ghana cedis or about 369.3 million US Dollars.

The CEO lamented also that investors are even taxed when they have not yet started making profit from their activities, urging the government to keep to its promise to remove these taxes in the 2018 budget.

Koney expressed worry that looking at the way investors were bypassing Ghana, to its neighboring countries in West Africa for green-field exploration, the country stood the risk of losing out on the benefits from mining on the international stage in the near future.
Ghana is the second largest gold exporter in Africa, after South Africa, with gold contributing 97.33percent share of the total minerals mined in Ghana.

Koney however lauded Newmont for its continued faith in the West African cocoa, gold and oil exporting country, by investing more in exploration and the expansion of its mining activities in the country.

“It is heart-warming to see that Newmont is going underground, and that is not only good for the volumes, but we are talking about more jobs for Ghanaians; we are talking bout more revenue to the state; we are talking about more local procurement for local suppliers among other benefits,” he pointed out.

Ghana is so far Newmont’s only mining country in Africa, where 15 percent of the company’s global total production comes from with a total of 3.2 billion dollars investment in two mining fields of Ahafo, where it invested 500 million dollars initially in 2006 and Akyem, its current larger production field in the country.

The company is embarking upon underground mining adjacent to its Subika surface mining pit at the Ahafo mines, with nearly 200 million dollars of investment in development, while it has also invested about 180 million dollars in the expansion of its Mill facility in anticipation of increased production, according to Daniel Egya-Mensah Acting General Manager at the Ahafo mines.

Newmont with its African Regional Headquarters in Accra is Ghana’s largest gold producer producing about 830,000 ounces of gold from its two mines in Ghana in 2016. Since 2006 Ahafo alone has produced a total of 5.2 million ounces of gold with a total tax, royalties and levies paid to Ghana amounting to 883 million dollars till date.

Akyem which commenced production in 2014 has so far produced a total of 1.8 million ounces of gold.

Okyere Yaw Ntrama , Mine Manager at the Ahafo Mines told Xinhua that with the new expansion between 200 and 400 jobs have been created, but this would be ended by the end of the development and expansion works, while more than 200 permanent jobs would be available at the underground mines. Enditem

Source: Xinhua/

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