Gold sector receives major boost

…  as maiden certified gold bar unveilled

The first certification and unveilling of the maiden hallmarked gold bar produced and processed in the country has been held to promote trading of the commodity on the international bullion market.

It is also to add value to the country’s raw gold resources, as well as help address the low incomes derived from the export of raw gold while properly accounting for gold exported from the country.

Expressing excitement at the event, the Minister for Trade and Industry, Mr. Alan Keremanten said: “The unveilling is significant in the history of the country, and also marks the beginning of a new era in our gold sector. It clearly exhibits the country’s commitment to its industralisation programme, which is on course. It will help to change the paradigm of development in this country and create jobs for our teeming youth”.

He said the task of refining gold to the purest quality by Gold Coast Refinery Limited is a highly skilled process which will help to transfer Gold Coast Refinery expertise in this field to Ghanaians, and that is how Ghana wishes to partner with investors to promote business in this country.

He added that the gold sector is very important to the economy because of its contribution to the country’s Gross Domestic Products over the years. Indeed, trading hall-marked gold on the international bullion market will be a remarkable achievement in the more than 300-year old gold trade in the country.

He emphasised that the certification of gold will promote the country’s commodity onto international bullion market, and dealers will then accept it as credible and valuable to be negotiated for and purchased.

Professor Alex Dodoo, Director-General, Ghana Standards Authority (GSA), expressed delight at the Authority’s contribution to the national economy by certifying purified gold in the country.

He explained that certification of any product, including precious metals like gold, is an established conformity assessment activity that provides confidence to customers, regulators, industry and other interested parties - to the effect that the product conforms with specified requirements, including products performance, safety, interoperability and sustainability.

Product certification facilitates trade, market access, fair competition and consumer acceptance of products on national and international levels.

“Globally, the certification and hall-marking of gold is undertaken by national standards bodies, the leading agencies in developing  countries,” he said.

He indicated that the GSA has developed and adopted over 10 national and international standards for gold, precious minerals and jewellery, adding that the Authority currently has a world-class gold assay laboratory equipped with state-of-the-art equipment comprising X-ray Fluorescence Machine and all the requirements for fire assay analysis.

These methods are the only acceptable ones world-wide in the assay of gold, he said.

He revealed that the GSA intends to work with stakeholders to ensure that gold purified in Ghana is traceable and of known province.

“These are exciting times in Ghana, and GSA is pleased to be contributing its share toward a modernised and transformed Ghanaian economy for a Ghana Beyond Aid.”

Chairman, Gold Coast Refinery Limited, Dr. Said Deraz, expressed profound gratitude to government for its support - adding that the refinery is a modern facility with state-of-the-art equipment and machinery to produce the highest purity of refined gold.

It has the capacity to conduct internationally acceptable assaying and produce Hallmarked Gold.

“With our plant size at full capacity operation, we will be able to absorb the entire gold production in Ghana and the sub-region of West Africa. This gives our operations a regional scope and the potential to stage Ghana as a gold-hub in the sub-region,” he said.

Mining industry plays key role in national growth— UMaT Prof.

Professor of Engineering at the University of Mines and Technology (UMaT) - Tarkwa, William Buah has acknowledgeD the country’s mineral industry as the foremost source of revenue generation, with prestigious status on contributing significantly to national growth.

He said statistics from the Ghana Revenue Authority (GRA) show that the minerals and mining sector is the major source of direct domestic revenue mobilised by the Authority in 2017, with overall total mining fiscal receipt mobilised by GRA increasing by 31 percent year on year - from GH¢1.65billion in 2016 to GH¢2.16billion in 2017.

Delivering the second public lecture in Accra to mark the 90th anniversary celebration of the Ghana Chamber of Mines, under the theme ‘A Responsible and Sustainable Mining Industry, a Partner for National Development’, Prof. Buah contended that the mining industry’s contribution to national development can be directly linked to national revenue generation, corporate social investment programmes of the industry, and sustainable alternative livelihood programmes.

He added that the mining industry is committed to responsible and sustainable mining practices, and therefore is positioned to continuously support national development.

“The industry’s fiscal contributions to Direct Domestic Tax Revenue from 2011 to 2017 have been consistent.”

He emphasised that corporate income tax receipts increased from GH¢696.9million in 2016 to GH¢969.6million in 2017, while mineral royalty revenue grew from GH¢550.7million to GH¢702.4million over the same period. These represent an increment of 39 percent and 28 percent respectively.

Employee income tax (pay-as-you-earn), he indicated, also increased by 22 percent to GHȻ487.9million in 2017 as compared to GHȻ399.9million in 2016.

Prof Buah stated that gold exports increased from 3.84 million ounces in 2016 to 4.61 million ounces in 2017, which he attributed to the upturn in output of large-scale producers, increase in volume of gold exported by Licenced Gold Exporting Companies; and exports of manganese increased from 2 million tonnes in 2016 to 3 million tonnes in 2017.

Meanwhile, bauxite also expanded from 1.14 million tonnes to 1.47 million tonnes over the same period, he stated.

“It has also emerged that the Minerals and Mining sector is the leading source of foreign exchange for the country from the export of commodities. The share of mineral receipts in total merchandise export for 2017 was 43 percent, while proceeds from the country’s major export commodities - cocoa and oil - accounted for 19 percent and approximately 23 percent respectively of merchandise export revenue in 2017.

“In essence, receipts from the export of gold were slightly higher than the sum of receipts from cocoa and oil put together in 2017.”

The main objectives of the industry’s Corporate Social Investment (CSI) programmes, Prof Buah said, are to support the training and development of local people in engineering, construction, electrical and other technical fields; and to provide support for research and charitable projects that are beneficial to the host communities and entire nation.

Chief Executive Officer of the Ghana Chamber of Mines, Sulemanu Koney, underscored the need to ring-fence revenues accruing to the state from the exploitation of minerals and mining resources.

This, he said, has come to the fore following the people’s inability to properly track contributions of the sector to the country’s national economy.

He indicated that though the mining sector has significantly contributed to the country’s development over the years, its contribution cannot be properly traced because the revenues mostly end up in the consolidated fund.

He is of the view that ring-fencing mineral revenues is the best way to assess the mining sector’s contribution to the economy, whereby the benefits which have been accruing to the state and mining communities can be properly evaluated.

Making a strong case for measures to be put in place to enhance transparency and accountability of the country’s natural resources-administration/exploitation, a Member of Parliament for the Tarkwa-Nsuaem constituency, George Mireku Duker, said that such a move will enable the state to prove the value of mining to the people.

Year	Expenditure on Corporate Social Investments (US$)
2010	17,590,469
2011	43,732,833
2012	26,676,354
2013	12,124,053
2014	20,769,049
2015	17,094,776
2016	12,203,889
2017	19,888,164

Nation does not have standards for grinding media for miners –GSA

Ghana is yet to have standards for local production and monitoring of Grinding Media, a crushing material widely used in the mining industry, a senior member of the Ghana Standards Authority (GSA), Mr. Charles Amoako has said. 

“Ghana does not have standards for this grinding media as at now. There are other available international standards that are obtained from the market,” he said

Mr. Amoako said this on behalf of the Chief Executive of the Authority, Prof. Alex Dodoo, at a one-day workshop in Tema organised by the Ghana Chamber of Mines (GCM) for stakeholders in the sector.
The workshop brought together various players within the manufacturing and local mining suppliers sector, and was aimed at helping to improve the procurement of locally manufactured grinding media for the mining industry and other industries in the country.

It was under the theme ‘The promotion of an enabling environment for the local manufacturing of the grinding media: Local content drive of the mining industry’. 

Grinding Media is a heavy metal used to crush or grind material into a powder form – cement mineral – in a mill. Grinding Media is widely used in production lines for powders such as cement, silicates, refractory material, fertiliser, glass ceramics etc., as well as for ore-dressing of both ferrous and non-ferrous metals – especially in the mining and metals industries.

Some of the most common types include ball mills, pellet mills, hammer mills, and disk mills. One of the most common types of grinding mill is a ball mill. This machine is typically used to grind material into powder. Some of the common grinding mediums used in the ball mill include stainless steel balls, ceramic balls, and flint pebbles.

Mr. Amoako explained that a Memorandum of Understanding (MoU) between the Chamber and the Authority have been signed at top management level to ensure enactment of appropriate standards to monitor the local production of grinding media for the country’s mining sector.

“Presently, we have signed an MoU with the Chamber of Mines and these are some of the activities that we want to put under the agreement. We need to as a matter of urgency have all these standards which affect your industry in place as soon as practicable,” Mr. Amoako stated.

The Chamber of Mines is seriously pushing the manufacturing sector to understand the procurement list the mining industry requires and make sure they are equipped to supply items on the list.

Currently, the Local Procurement List has 19 items, and they include Grinding Media and others such as Cement & Cement Products/Grout, Quick & Hydrated Lime, Electrical Cables, (PVC) Pipes, General Lubricants, Plastic Sample Bags, Calico Bags, Bullion Boxes, Conveyor Rollers, Metal/PVC Core Trays, Overalls & Working Cloths, High Density Polyethylene & polyvinyl Chloride, Chain Link Fencing/Wire Netting/Barbed Wire, and Haulage Services & Catering Services among others.

Mr. Sulemanu Koney, Chief Executive Officer of the Chamber, said: “Our attention has been drawn to the fact that while there are different grinding media sizes used in the mining industry, the nature of ore it reduces dictates the production process and chemical composition of the balls as well. It is our expectation that we will have opportunity to discuss these issues in some detail.

“The Chamber is also aware of issues around the cost of electric power, which is a major challenge for manufacturers of grinding media.  While the cost of power has seen a decline in recent times, it is our expectation that as the indigenous gas component of the energy mix increases we should witness a further decline in power tariffs to generic industry so as to make firms more competitive.”

Available statistics from the Minerals Commission indicate that of the US$60.6million worth of grinding media demanded by the mining industry in 2016, only US$25.6million was produced locally.

This therefore means that the mining industry provides a manufacturing opportunity of US$35million worth of grinding media to be produced locally.

This development has pushed the Chamber to begin proceedings to set up a technical team that will harmonise various specifications to arrive at national standards for grinding media.

Mr. Koney said that the mining industry having the potential to provide more value beyond the substantial payments it makes to government is not lost on the Chamber.

It is instructive to note that in the last six years, except in 2014, the Ghana Revenue Authority indentifed the mining industry as the leading contributor to domestic tax collections.

For instance, in 2017 the mining industry paid GH¢32.16billion to the GRA – representing 16.3% of domestic tax revenue and an increase of 31% over what the Authority mobilised in 2016.

Citing a study initiated by the Chamber a few years ago that captured the catalytic role of the mining industry, Mr. Koney said: “Most value added is supported directly by the mining companies; most jobs are actually supported in their value chain through supplier expenditures and the re-spending of salaries.

“On average, the sampled mining companies employ annually about 7,000 people directly while in total about 111,000 jobs are supported. This means that for each job at the mine site an additional 15 jobs are supported in the wider economy.  Comparing this to local procurement, it means that for each US$1million of local procurement about 105 jobs are supported.”

He added: “The sample of seven mines directly contributed US$796million to the Ghanaian economy in 2013.  Once the indirect impact of the mines expenditures on goods and services in the supply chain is taken into account, this figure rises to US$1,556million.

“If local procurement is increased by 25%, value added to Ghana’s economy will increase by US$50million.”

The procurement of locally produced heavy-duty electric cables by mining companies increased from US$172,698.22 in 2014 to US$488,999.66 in 2015 an improvement of US$316,301.44 in 2016 representing an increase of 183%, he said.

He mentioned that standards are a critical tool for effective marketing. At the least, they give consumers emotional assurance that the product is fit for purpose.

“Mining companies have good reasons to support the procurement of locally manufactured inputs. While these may not be altruistic, the business case is paramount.”

Mr. Koney noted that having reputable companies manufacturing and supplying good quality inputs will give mining companies the necessary peace of mind. It will obviate the need for them to keep stock, thereby improving their cashflow and reducing their working capital.

As an industry that is essentially a price-taker – an output whose price a commodity, such as gold, whose price is externally determined – any endeavour that improves efficiency, productivity and costs will come in handy.

However, the challenges of poor or inconsistent quality, delays in delivery of inputs produced locally are banes which need to be addressed.

“It is our considered view that having a Ghana Standards Authority logo embossed will provide a vote of confidence in the quality of these inputs.  It will help deepen supply of locally manufactured goods into the supply chain of the mining industry, both in Ghana and the sub-region.”

He commended West African Forgings (WAFOR) for leveraging its supply of locally manufactured grinding media into West Africa. “It is our expectation that a Ghana Standards Authority logo will improve your business,” Mr. Koney stated.

Pirating tax stamp is a crime - GRA

The Chief Revenue Officer at Ghana Revenue Authority (GRA), Kwabena Apau Anto, has said it is a crime for businesses to pirate tax stamps on fake products.

“The Authority is investigating a number of such cases, and we have even made some arrests. We want to make sure that such people are arrested and brought to book to allow genuine products manufacturers to operate in the country.

Some businesses and individuals acquire tax stamps from the Authority genuinely, and then affix them on another company’s products. “That is what most people are doing. All that they do is pirate other people’s products,” said Mr. Anto, after GRA’s tax stamp taskforce visited some selected retail shops in Accra to inspect stamps on consumable products. 

The exercise was aimed at ensuring that retailers comply with the law and sell consumable products with the approved tax stamps from the Authority. Some consumable products without the tax stamp were confiscated.

Some of the affected shops include the De-Latoya Enterprise in Osu, Voltic Retail Centre and N.J. Ventures - both in Achimota, and the Gbawe Depot of Accra Breweries Ltd., which had several beverages and bottled water.

Mr. Anto warned that shop owners selling products without tax stamps will be dealt with drastically.

He cautioned retailers, wholesalers, distributors not to take any product from any manufacturers without the stamps, because the law places a duty on them to sell only products with the tax stamps.

“We have given stamps to all suppliers,” adding that penalties of up to 300% of the products’ value will be imposed on defaulters - who may also face a sentence of five years.

He indicated that GRA will continue to visit the markets to ensure strict compliance with the law, and that importers are also expected to affix the stamps on their products.

“The Exercise is simultaneously ongoing in all 10 regions of the country, and we want to tell the retailers, distributors and wholesalers to compel manufacturers and importers to affix the stamps on their products,” Mr. Anto stated.

Mr. Anto explained that the manufacturing companies had received enough of the Tax Stamps from the Authority, and are supposed to distribute them to the various wholesalers and retailers to be affix on the old products.

“We even made announcements that anybody who has old stock should apply to our office indicating the kind of products and the number, then we will come and verify and give you the Tax Stamps free to affix on them.” 

He therefore warned dealers in excisable products against accepting those that have no Tax Stamp on them from their distributers, and warned them: “When we come back to see such products, you will be arrested and prosecuted according to the law”.

The Tax Stamp Policy, which emanates from the Excise Stamp Act passed by Parliament in 2013, Act 873, prescribes that all alcoholic and non-alcoholic carbonated beverages, bottled water, cigarettes and other tobacco products are embossed with the Tax Stamp before being released to the market or sold to customers.

The Excise Tax Stamp is a specifically designed stamp with digital and other security features, which is supposed to be affixed on specified excisable products produced locally or imported, to provide enough guarantee of product authenticity as well as show that taxes and duties have been paid or will be paid.

This is to control the importation and local production of excisable goods for revenue purposes; check the illicit trading, smuggling and counterfeiting of excisable products; check under-declaration of goods; and protect and increase revenue mobilisation for national development.

To ensure this, a deadline of six months was given to all distributers, wholesalers and retailers, starting on March 1, 2018, to have the Tax Stamp affixed on their products.