Myths of the fortune metals
Responsible mining is breaking long held myths of an industry with image sometimes buttered and battered by awkward and wild rumours.
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Yet, mining is no such evil all the time. The business is anchoring major community development projects; livelihoods have been transformed and indigenes have been economically empowered.
The prospects of the ore business are worth telling. Stripped of any flowery depictions, mining still holds an important promise and perhaps ample testament that when regulatory systems works and ethical mining companies are given some good guarantees, mining presents a great future for the nation’s development.
President of the Ghana Chamber of Mines, Mr Kwame Addo-Kufuor recounts the contribution of the mining sector to country’s kitty.
The mining sector maintained its role as a leading source of fiscal revenue for the country contributing GHȻ 1.35 billion to the national economy in 2015.
This amount he said represents an eight per cent increment over the GHȻ 1.24 billion recorded in 2014. The sector’s statutory payments comprised GHȻ 463.12 million in corporate taxes, GHȻ 485.6 million in royalties, GHȻ 404.74 million in PAYE and GHȻ 0.87 million in other taxes.
“Our sector contributes significantly to the attainment of monetary policy goals in Ghana through the supply of forex to the banking system”, he boasted at the Chambers 88th Annual General Meeting in Accra.
The Bank of Ghana had conformed to the Daily Graphic that the sector was the leading source of foreign exchange in 2015, contributing in excess of 31 per cent of total merchandize exports.
Instructively, mining companies returned US$ 2.6 billion of their realized mineral revenue into Ghana, which represented 85 per cent of the total revenue accrued to members.
The remaining 15 per cent largely serviced debt and services incurred in foreign exchange, payments for machinery, equipment, and dividends to foreign investors.
Retained fortune
A total of US$ 2.1 billion out of the repatriated revenue of US$ 2.6 billion was returned through the commercial banks and the remainder through the Bank of Ghana.
The companies spent US$ 865 million on local purchases, which represents 28 per cent of their mineral revenue.
Similarly, US$ 166 million was used in importing consumables to support the production process. It is worth mentioning that expenditure on local purchases increased from 18 per cent of mineral revenue in 2011 to 28 per cent in 2015 while expenditure on imported consumables declined to 5 per cent from 15 per cent over the same period.
“This impressive outturn underscores our member companies’ commitment to the laudable policy on local content”, Mr Addo-Kufuor said.
The downsides
Proceeds from the export of minerals reduced from US$ 3.94 billion in 2014 to US$ 3.39 billion in 2015. The reduction in mineral revenue was as a result of reduced production (and price) of gold and purchases of gold and in the shipments of manganese.
While manganese recorded a five per cent dip in total shipments, the volume of gold exports also reduced by 10 per cent but purchases of diamond by Precious Minerals and Marketing Company (PMMC) decreased by 28 per cent.
Revenue from gold fell to US$ 3.32 billion in 2015 from the US$ 3.84 billion which was recorded in 2014. This was largely due to the fall in output of mining companies and the average realized gold price.
Total gold output dropped from 3.1 million ounces in 2014 to 2.8 million ounces in 2015 as a result of declines in production at AngloGold Ashanti Obuasi, Golden Star Bogoso Prestea, Abosso Goldfields, Golden Star Wassa, Chirano, Newmont Ahafo and purchases by ASAP VASA.
Even though AngloGold Ashanti Iduapriem, Gold Fields-Tarkwa, Newmont Akyem, Adamus, Perseus, and PMMC recorded growth in output, the positive impact was insufficient to offset the dip in the output from their counterparts.
Intruders’ invasion
Despite these contributions to the country, a frightening surge in the activities of illegal miners on the concessions of large scale mines as well as other non-designated mining areas has sadly been a feature on the mining landscape in Ghana.
These uncontrolled activities have resulted in the massive destruction of arable lands and the pollution to water bodies of host communities.
Government responded to this security threat by setting up a National Security Committee on Lands and Natural Resources as well as amending some portions of the Minerals and Mining Act, 2006 (Act 703). These legal frameworks, together with other initiatives by the sector agencies, have been initiated to address the scale of illegal mining across the country.
Sadly, the inaction of the security agencies and the tacit endorsement of illegal mining by regional and local government representatives as well as traditional authorities present a formidable obstacle to the vaunted resolve to clamp down on illegal mining.
In the event tacit pseudo official support from some Local government authorities’ for illegal mining has encouraged the operatives to encroach the concessions of large scale mines.
