Mining sector reforms are vital for sustainability

In the wake of debates of Ghana has lost due to mining activities despite the potentials to transform the fortunes of the country, experts are calling for regulation reforms.

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The African Centre for Energy Policy (ACEP), an energy policy think tank, is calling for mining investment law to ensure that the country’s mineral revenue is collected, disbursed and spent in a transparent manner.

mining
mining

The Centre suggested that the country needs to introduce a law on resource rent tax in the mining sector to capture a share of excessive profits while introducing other exempted taxes without negatively affecting long term mining investment.

“Government must develop a public investment management plan and judiciously apply mineral revenues to the realisation of government’s investment objectives.”

Recently, residents of some mine-take communities within the Ahafo project of Newmont Ghana Gold Limited, have criticized the legislature for not engaging them in the amendment of certain provisions in the Minerals and Mining Act.

According to them, they are mostly affected and suffered the devastating consequences of commercial mining, noting that Parliament had failed them for not collecting their views.

The residents told Journalists at separate meetings at the Ola Resettlement Site Phase One and Ola Resettlement Site Phase Two near Kenyasi number two that the operations of the mining company had worsened their livelihoods.
Although, amendment in certain provisions in the Minerals and Mining Act has criminalized activities of small scale miners, operating in the country without permit.

According to new provision in the Act, perpetrators are liable to a summary conviction of a fine of not more than 17,000 penalty units or to a term of imprisonment not more than 10 years or both.

The residents, however, said such amendments in the Act were a surprised to them as they were not engage in any discourse.

An illegal miner, Michael Donkor, noted that the only option left for many of the people who were affected by the mine was to undertake illegal mining activities to sustain their livelihood.

According to him, the crop and land compensation paid to most of them by the mining company was not enough to establish any business.

Ama Savado, a -70-year-old woman at Ola Resettlement Site Phase One, observed that management of the Ahafo mine failed to fulfill a promise made to the communities that it would engage majority of the affected people to work at the mine.

She explained that farming remained the source of livelihood of the people and since the company took over all their farmlands, life at the new site had been unbearable for most of the families.

Mr Tweneboa Kodua, the Assemblyman for Dormaa Electoral Area, affirmed that residents at the three resettlement sites had been sidelined from the poverty intervention measures put in place by the mining company.

He said the Newmont Ahafo Development Foundation (NaDEF), a fund set-aside by the mine to carry out development projects and livelihood enhancement programmes are only concentrating on the 10 main Ahafo-mine take towns.

Mr Raphael Godlove Ahenu, the Chief Executive Officer of the GLOMEF advised the residents to be patience and ensure that they channel their grievances through laid down procedures for redress.

He asked them to always ensure that they resort to dialogue and avoid unnecessary confrontations in finding lasting solutions to their problems.

Mr Ahenu said under the six year project being funded by the Global GreenGrant Fund at the cost of 8,000 dollars, the voices of the mining communities would be empowered and amplified.

However, Mr Ismael Ackah, Head of Policy Unit, ACEP, has explained the reason for the call saying that, according to Extractive Industries Transparency Initiative, Newmont has been enjoying ‘Golden Days’ because the country had failed to capture adequate and fair share of the mineral value over the years.

This he said was critical because government had lost an estimated 90 million dollars in 2011/2012 as a result of mining stability agreements and 387 to 1168 million dollars from non- optimisation of royalty receipt from 1990 to 2007.

Mr Ackah said from 2010 to 2013, the country’s average share of the total value for gold production was seven per cent, while government received 1.7 billion dollars in taxes, the total value of gold production in 2014 was exceeding 23 billion dollars.

He said the report revealed that from 2003 to 2012, Newmont paid less than 500 million dollars tax to government despite reporting annual revenues of 931 million dollars in 2012.

Mr Ackah said the country’s domestic revenue is expected to be 8.1 per cent lower than the 2014 budget estimates, explaining that the situation is likely to persist with decreasing oil revenues which could lead to cut in social services such as education and health.

The Centre commended government for re-negotiating the Newmont contract, while urging the Executive government to introduce a law on resource rent tax to capture a share of excessive profits.

ACEP called for effective transparency and accountability to track share of royalties that goes to traditional authorities as well as effective tax administration to detect and publish transfer pricing and other illegal corporate practices.

Source: Adnan Adams Mohammed

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