Ghana's Mines Chamber pushes for speedy ratification of mining leases by Parliament

President of the Ghana Chamber of Mines, Mr. Johan Ferreira is pushing for the speedy ratification of mining leases by Parliament to end the impression that affected companies are operating illegally.

“The non-ratification of mining leases by Parliament gives the impression that the affected companies are operating illegally.

 “The affected companies have entered into individual agreement with the Executive arm of government, which has the sole responsibility to present agreements in the required format for consideration and ratification by Parliament.”

Leading a courtesy call on the Minister of Lands and Natural Resources Nii Osah Mills by executives of the Chamber of Mines, Mr. Ferreira said: “We will be grateful if the Ministry can expedite action in presenting the agreements to Parliament for ratification, since the sentiments are adversely impacting the image of affected companies and the industry at large”.

One such mining giant in the country that has been hard hit by the delays in ratification of mining lease by Parliament is Newmont Ghana Limited, a multinational gold mining company.

Newmont Ghana has been accused of operating its Akyem concession illegally. In line with the 1992 Constitution, any investment for the exploitation of natural resources has to go through Parliament and the Minerals Commission.

But Dr. Kwabena Donkor, Chairman of the Parliamentary Select Committee on Mines and Energy, has accused Newmont Ghana Limited of operating the country’s biggest illegal mine at its Akyem concession.  According to him, the company’s operation in the Akyem area has no legal leg to stand on.

Mr. Ferreira, outlining other programmes of the Chamber observed the poor state of host communities continues to reflect negatively on the mining industry.

He expressed concern about the miserable 4.95 percent of total mineral royalty that is paid to the five district assemblies in whose jurisdiction mining takes place.

In 2013 mining companies paid mineral royalty totalling GH₵364million to government, but only GH₵18million is expected to be returned to the five district assemblies for development.

This amount, he said, is woefully inadequate for stimulation of infrastructural development in the mining communities. 

“It is in this regard that the Chamber is advocating for 30 percent of royalties to be returned to mining areas over a specific period of time, and tied to specific infrastructural projects in order to stimulate development.”

He pushed for speedy passage of the Minerals Development Fund bill into law to help ensure judicious use of the amounts returned to the districts for a face-lift of mining communities through infrastructural projects.

On sustainability of the mining industry, Mr. Ferreira asked government to adopt a predictable fiscal regime to boost investor confidence and grow and expand the industry.

He called for implementation of a sliding-scale royalty regime based on the price of metals, such that when prices reach a predetermined level a particular royalty rate will kick in.

“The measures are necessary for government to help grow and expand the mining industry and to particularly prolong the life of the mines.”

Mr. Ferreira said the mining sector, aside from being the highest contributor to domestic collections, returned 68 percent of the US$4.7billion realised from the export of minerals to the country.

“In the last few years, the mining industry has returned a range of between 60 percent and 73 percent of its mineral revenue to the country through the Bank of Ghana and the commercial banks, well in excess of the minimum 25 percent required by law,” he remarked.