‘Develop mining investment law to promote transparency’

Government has been urged to develop and implement a mining investment law to ensure that the country’s mineral revenue is collected, disbursed and spent in a transparent manner.

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

“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,” said Mr. Ismael Ackah, Head of Policy Unit at the African Centre for Energy Policy (ACEP), an energy policy think-tank.

Mr. Ackah said the country’s domestic revenue is expected to be 8.1 percent 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 the 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.

He said according to Extractive Industries Transparency Initiative, Newmont has been enjoying ‘Golden Days’ because the country had failed to capture an adequate and fair share of the mineral value over the years.

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

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

Launching a new report titled ‘Golden Days for Newmont’, Mr. Ackah said the report reveals that from 2003 to 2012 Newmont paid less than US$500million tax to government despite reporting annual revenues of US$931million in 2012.