Home   >   Business   >   Economy   >   201908
State Loses $357m To Ghana Manganese   
 
  << Prev  |  Next >>
 
07-Aug-2019  
Comments ( 0 )     Email    Print
       
 
 
 
Kwaku Asomah-Cheremeh
 
Related Stories
 
The Ministry of Lands and Natural Resources (MLNR) has shut down the Tarkwa Nsuta-based Ghana Manganese Company Limited (GMCL) in the Western Region for committing infractions which have led to huge losses to the state.

The discrepancies were detected after the ministry carried out a technical and financial audit of the company from 2010 to date.

The scope of the audit included ascertaining the pricing for manganese as declared by GMCL, examining the grade of iron ore mined, determining the quantity of raw manganese shipped abroad and reviewing capital and operational expenditure in relation to payments made to the state.

Besides, the audit reviewed compliance with local content legislations, financing structure of the company and the contents of the mining licence which provided guidance on financial and operational requirements.

Minister of Lands and Natural Resources, Kwaku Asomah-Cheremeh, announcing the decision at a press briefing in Accra on Monday, explained that the audit which relied on fair pricing model, open source data and verifiable business intelligence centre had shown that the state lost more than $357 million between 2010 and 2017.

“Findings have confirmed huge losses to the state. These estimated losses include additional royalty taxes due, $12.8 million; additional corporate taxes due, $79 million; loss of dividends declared, $6.1 million; while additional revenue residing offshore between 2010 and 2017 with no transfer pricing conducted prior to 2017 was $259 million,” he said.

He also disclosed that the audit discovered manipulation of sales by Manganese Trading Limited the sole off-taker of manganese produced by GMCL which led to a stockpiling of ore prior to a downward adjustment of transfer prices from 2.4 to 0.65 per dry metric ton unit.

Mr Asomah-Cheremeh indicated that the manipulation which contradicted Section 13 of the Mining Lease Agreement was done prior to the expiry of an alleged three-year sales exclusivity agreement that was started in April 2012 by the company with its sole off-taker.

“Calculated loss due to this price/production manipulation is conservatively estimated to be $3.64 million,” he disclosed.

In 2017, the China Tian Yuan Manganese Limited, a subsidiary of Ningxia Tianyuan Manganese Industry Company Limited, became new owners of GMCL as it acquired the company from Consolidated Minerals Limited.

The minister, however, disclosed that financial analysis from 2017 to 2018 had shown 65 per cent increase of production tons mined, as well as 80 per cent increase in sales.

He said the increment in production after change in ownership had nothing to do with capital investment in the company.

“Ghanaian contractors providing services are owed hundreds of millions of Ghana Cedis even though the company continued to increase its export of manganese in excess of 3 million metric tonnes,” he explained.

The company is also known to have shown little commitment to government’s policy of value addition to raw material as it has failed to build a smelter while it is in default of payment of Annual Mineral Right Fees in excess of $4 million, the minister said.
 
 
Source: Daily Guide
 
 

Comments ( 0 ): Post Your Comments >>

 
 
 
Disclaimer: Opinions expressed here are those of the writers and do not reflect those of Peacefmonline.com. Peacefmonline.com accepts no responsibility legal or otherwise for their accuracy of content. Please report any inappropriate content to us, and we will evaluate it as a matter of priority.
 
 
Featured Video