Ghana Has 0% Share In Gold Operations

City & Business Guide has gathered that Ghana currently holds zero percent share in five mining companies operating in the country. Ghana is currently losing a lot of revenue as the multinational mining companies are exploiting the country’s mineral wealth. The mining companies include Newmont Ahafo and Akyem Mines, AngloGold Ashanti mining projects at Obuasi, Iduapriem and Teberebie and Noble Mineral Resources project at Bibiani. The Finance Minister, Dr Kwabena Duffuor, in a letter sent to the Attorney General, which was chanced upon by this paper, expressed grave concern about the development and sought the AG’s legal advice to help rectify the current situation. In letter dated January 20, 2011 entitled: “Varying The Republic’s 10 percent Free Carried Interest In Mining Leases,” the Finance Minister said both the Minerals and Mining Law, 1986 (PNDCL 153) and the Minerals and Mining Act, 2006 (Act 703) expressly state that the government shall acquire 10 percent free carried interest in the rights and obligations of mineral operations. “Neither law gives government the option to vary this requirement to the detriment of the Republic, although both laws expressly also give government the option to increase the Republic’s share by purchasing additional shares,” the Finance Minister said. “This letter is to request your legal opinion about the right of Parliament to ratify Agreements or Government actions that contradict laws of the country in effect at the time of the Agreement, action or ratification: Particularly, Parliament’s right to approve the reduction or removal of the Republic’s right to a 10% free carried interest in mining operations in Ghana, either through Agreement or sale of the right once acquired.” According to Dr Duffuor, the lost of holding in AngloGold Ashanti is due to the fact that the state sold its Ashanti Goldfields shares when AngloGold merged with Ashanti Goldfields in or about 2003. On Newmont, the Finance Minister said Ghana’s zero percent holding in the mining giant is due to an agreement signed and ratified with Newmont in 2003. He further stated that Ghana’s zero percent holding in the Bibiani Gold Mine owned by Noble Mineral Resources is due to the fact that the gold field was originally owned by Ashanti Goldfields and divested subsequently to AngloGold Ashanti and then to subsequent owners and finally to Noble Mineral Resources in December 2009. The Finance Minister said “Although Article 268 of the Constitution grants Parliament the authority to ratify agreements relating to natural resources, nowhere in the Constitution is Parliament given the added power to ratify agreements that contradict the laws of the country. “In fact, under the Directive Principles of State enshrined in the Constitution it is evident that Parliament at all times must act subject to the laws of the country. In fact, under Economic Objectives, Article 36 (4) places an onus on the State to ensure that Foreign investments shall be encouraged within Ghana, subject to any law for the time being in force regulating investments in Ghana.” While mining has been a blessing to many countries across the world including South Africa and Botswana, the case is wholly different in Ghana as the state has no holding in the operations of the mining companies. The Ghana Mineworkers’ Union of TUC has also expressed similar concerns. At the just ended 10th Quadrennial Delegates Conference of the GMU held in Sunyani, the General Secretary of the union, Prince Williams Ankrah raised the union’s concern about the current ownership structure of the government. He said the union will campaign along with other civil society groups to dilute the foreign capital component of the stake in the existing ownership apportionment and cited the case of Debeers and the Botswana government in which the agreement is 50/50. According to him, the Ghanaian situation is different and is nothing to write home about since mining communities had recorded little infrastructure and commercial impact. “The poor state of infrastructure in the Prestea Bogoso, Bibiani and Akwatia are memories that our generation can hardly forget. In spite of all the glaring inadequacies that have caught up with us for hundred years of mining businesses in Ghana, we are still muddling through. The situation needs rethinking. Civil society groups, trade unions and the youth of this country must forge an alliance to debate these negative trends and compel the managers of our economy to shift from our comfort zones and begin to reassess their leadership in dealing with the complexities associated with Ghana Plc.” “The situation is more compelling today than ever and we cannot continue to tolerate excuses. Resources generated from our gold rush cannot showcase any symbolic initiated projects taken over the years. The youth are not getting their fair share of the cake through sustainable job opportunities beyond mining,” he stressed.