AGA told to reverse decision to abrogate MBC contract

The Obuasi Concerned Civil Society Platform has appealed to AngloGold Ashanti (AGA) to take steps to reverse the decision to abrogate the contract with Mining and Building Contractors (MBC) workforce. 

 

“Workers of the company who have been rendered jobless as a result of the decision should be reinstated immediately, so that they will be in a position to fulfil all social obligations to their families and communities,” the group said.

The group, which consist of Centre for Social Impact Studies (CeSIS), Alliance for Obuasi Development (AfOD), Green Ghana Initiative (GGI), Extractive Engagement Group (EEG) and Participating Youth Alliance for Development (YAD), campaigns to ensure Obuasi and its natives get a fair benefit of the wealth that nature has endowed the people with.

A statement issued said: “To us, the fracas between AngloGold Ashanti and MBC goes beyond contractual relationship. 

“It is more of a social obligation which AGA cannot fail to perform. With the current turmoil in the mining industry beginning to bite harder and harder, the people of Obuasi cannot be taken through another round of painful social and economic upheaval because of unfair decisions from AngloGold Ashanti.”

According to the CSOs in Obuasi, the global mining industry has gone through some turbulent times, principally as a result of tumbling gold prices. 

This unfortunate incidence has had its ripple effects in a number of mineral-rich countries including Ghana.

The result of this decreasing price of the precious metal has been the decision by mining companies to downsize their staff. 

AngloGold Ashanti’s Obuasi Mine has so far reduced its staff by 430 personnel as a result of the current challenging times in the entire mining industry.

The irony however lies in the fact that this same company can still afford to employ the expensive services of expatriates, including the payment of exorbitant salaries to them. 

“These costly expatriate employees are brought in to replace the highly efficient locally-trained less-costly labour that has been executing efficiently the same job meant to be performed by the high-maintenance expatriates. 

“These highly efficient local workers are all MBC-trained staff who have executed flawlessly their mining obligations for so many decades -- contributing immensely to the enrichment of AGA Obuasi Mine,” the statement said.

The group said AngloGold Ashanti has abrogated its long-standing contract with MBC, a Ghanaian company, and has brought in a foreign company to replace this local company that has worked efficiently with them for so many years. 

 MBC has operated as an underground development contractor for AGA in the Obuasi area for over 92 years. MBC has within these years built a credible portfolio of interests in the mining industry. As one of the biggest employers in the Obuasi Municipality, MBC’s contribution to the local economy cannot be overemphasised.

The group explained that before the abrogation of the contract AGA presented some requirements to be met by MBC. As part of the requirements to meet the new standards required of them by AGA as their major contracting firm, MBC was forced to secure a loan of US$15million dollars from a consortium of banks including Agricultural Development Bank and National Investment Bank to procure new equipment specifically designed to carry out the underground mining development activities for AGA.  

 Unfortunately, after spending such an exorbitant amount of money to acquire this equipment, AGA unexpectedly decided to abrogate the contract -- leaving MBC without any reliable contract to conveniently service the loan amount secured by the company to purchase the above mentioned mining equipment. 

Currently, the National Investment Bank has taken legal action against MBC for defaulting on the loan repayment, while the Agricultural Development Bank has indicated its intention to follow suit. “We believe that AGA has acted in bad faith over the issue and needs to immediately reverse its decision with immediate effect. Since the issue is pending before court, we do not wish to make further comments on the substantive matter.

“With staff strength of over 1,300 MBC has contributed immensely to the growth and sustenance of the Obuasi economy. Apart from statutory payments like income tax, corporate tax and VAT, SSNIT, the company further pays property tax that goes directly to the Obuasi Municipal Assembly for use to undertake diverse development projects across the Municipality,” the group said.

Commenting on the benefits of MBC, the group said it has undertaken numerous and highly appreciable cooperate social responsibilities including construction of buildings, scholarship to wards in orphanages, educational aids, contributions toward chieftaincy and cultural durbars, consistent donations toward every Farmers’ Day celebrations. 

“All these acts of free-will kindness from MBC have helped the entire community in diverse ways. Added to this is the multiplier effect of these contributions to the wider Ghanaian economy. 

Assuming each employee of MBC takes care of five dependants, the impact from the abrogation of the contract with AGA will negatively affect quite a substantial percentage of entire population of the Obuasi Municipality.”

The group added: “With the turmoil in the mining industry beginning to bite harder and harder, the people of Obuasi cannot be taken through another round of painful social and economic upheaval because of the decision of AngloGold Ashanti. 

“The bringing in of all these expatriates to replace MBC’s locally trained workers who really know the Obuasi Mine and has worked flawlessly and diligently toward its development and sustainability will definitely affect the Obuasi Mine. 

“The expatriates brought in by AGA are charging them an arm and a leg -- which is now bankrupting the Obuasi Mine,” the group stated.