A coalition of civil society groups is calling for the speedy review of any stability agreement signed between the state and any mining company, in a manner that will balance profitability with fiscal investment in the country�s economy.
The coalition says the agreements must be framed to avoid a situation where the country�s stake in the mining industry is locked up in its effort to mobilise revenue.
�The stability agreements are not good for the economy of Ghana. About 10 to 15 years ago they were necessary for Ghana because we were not sure of our political stability. Today Ghana is a beacon of hope in Africa in terms of political stability, so there�s no reason why we should make special provisions for mining companies,� Mr. Abdulai Darimani, Head of Environment Unit at the National Coalition on Mining (NCOM), said.
�NCOM has for a long time highlighted some challenges that these contracts pose for Ghana and the communities that host these investors.�
Mining companies that have signed stability agreements with the government include South Africa-based AngloGold Ashanti, the world�s third-largest gold producer, and Newmont Ghana, a subsidiary of Colorado-based Newmont Mining Corporation.
A stability agreement typically freezes mineral royalty and other tax-rates paid by a company over a 10- to 15-year period creating a situation where very little of the windfall earnings of a beneficiary company accrue to the state.
Mr. Darimani was speaking at a media conference ahead of a three-day meeting to review the mining component of the Natural Resources and Environmental Governance (NREG) programme in Accra.
The review meeting is designed to address governance issues in the natural resources and environment sector, and comes against the backdrop of attempts by the government to extract more revenue and benefits from the mining sector which has failed after more than a century of production to translate mineral wealth into broad prosperity.
The meeting will discuss and take a position on the ongoing review and renegotiation of mining contracts and stability agreements.
�We will engage the review committee and offer our views on alternatives to help advance the contribution of the mining sector to the country�s overall development.
�Some of government�s recent actions such as the windfall tax and the capital allowance (revisions) were consistent with the position of the Coalition,� Mr. Darimani said.
The government in its 2012 budget statement increased the corporate tax rate for mining companies from 25 to 35 percent, introduced an additional windfall tax of 10 percent, and established a uniform regime for capital allowance of 20 percent that is deducted over five years.
The NREG, an initiative to support better management of the country�s natural-resource wealth, has the overall objective of ensuring sustainable economic growth, poverty reduction, increasing revenues, and improving environmental protection.
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