Foreigners take over locals’ gold buying business

The Minerals Commission has clarified the falsehood that foreign gold buyers are taking over the business of local gold buyers, and exporting the gold at great loss to the nation among other allegations.

The Commission explained that there are two classes of gold mining licences: namely the large-scale gold mining leases and small-scale mining licences.

A statement signed by the Commission and copied to the B&FT said for the large-scale gold mining companies, gold sales have either been by the spot-price at the London Metal Exchange or by other Marketing Agreements with overseas refineries, with the approval of government. Thus, such companies do not sell their gold locally.

In the case of small-scale miners, the licences enjoin them to sell gold produced from their operations to the Precious Minerals Marketing Company (PMMC) or other gold buyers licenced by government.

Thus, gold produced by small-scale miners is that sold locally and purchased by licenced gold dealers mainly for export or limited refining by small-scale refineries.  Exports of gold are regulated by the Bank of Ghana, Ghana Revenue Authority (Customs Division) and the Minerals Commission.

The licencing of Ghanaian-registered companies to buy and export gold is done in line with sections 6 and 104 of the Minerals and Mining Act, 2006, (Act 703) as well as Regulation 4 of the Minerals and Mining (General) Regulations, 2012 (L.I.2173). 

Application for the licence is submitted to the Commission for review and subsequently recommended to the minister responsible for Lands and Natural Resources if deemed appropriate. The minister may then grant the licence if the recommendation is accepted. 

The Commission said that granting of licence to deal in gold is not discriminatory between nationality, race, tribe or colour -- adding that the applicant must meet certain technical and financial conditions, without which the minister may not grant the licence. Currently, 20 gold exporters have been granted licence by the minister. 

The breakdown is as follows: Ghanaians –11, representing 55%; Indians – 5, representing 25%; and other nationals -- 4 (German-1, Australian-1 and Lebanese-2) representing 20%. 

 Again, in Ghana the only institution that can grant any company the privilege of retaining part or all of its earnings outside the country is the Ministry of Finance and Economic Planning. 

Minerals Commission records indicate that none of the licenced gold dealers have been granted that privilege. Analysis available on some of the licenced gold dealers indicates that about 60% of revenue was repatriated to the country last year.