Previous mining contracts were poorly negotiated "Minister reiterates need to utilise resources from extractive sector"

The Minister of Lands and Natural Resources, Samuel Abu Jinapor, has reiterated the urgent need to utilise the country’s mining resources for socio-economic development.

He said it could not be denied that the country had in the past not done very well in negotiations for the extraction of its mineral resources.

“Some of our policies and contracts have, unfortunately, resulted in extraordinary profits to mining companies at the expense of the country.

“We had, until recently, failed to put in place a proper framework that will ensure that we benefit optimally from these resources,” he stated.

The minister said that at the opening of the 5th Mining and Energy Summit and Exhibition, which was held on the theme: “Harnessing Mining and Energy Potential for Sustainable National Development”.

He said the country’s over-dependence on the export of raw minerals had also denied it of the benefits that accrued from these minerals across the value chain.

He noted that other actors in the extractive industry, particularly extractive companies, could not escape blame in this regard. 

Major contributor 
to illicit flows

Mr Jinapor said it was alarming, as the data showed that the extractive sector continued to be the major contributor to illicit financial flows from the continent.

He said illegal exploitation, tax evasion, trade mis-invoicing, transfer pricing and under-declaration, were just a few of the practices contributing to this menace.

The Africa Centre for Energy Policy (ACEP) reports that illicit financial flows from Ghana through trade mis-invoicing averages about $1.44 billion per year with export under-invoicing and import over-invoicing accounting for almost one billion dollars.

“We, obviously, cannot sustainably develop if these continue,” the minister stated.

Bulwark of economy

He said despite all these loopholes, the mining industry continues to be the bulwark of the economy, with gold alone contributing some $6.6 billion in export receipts in 2022.

He noted that in the past few years, the energy sector had also been a major contributor to the economy.

“The hard truth, however, is that we have not benefitted optimally from these two sectors.

“The convergence of these two sectors, mining and energy, presents us with a unique opportunity to shape our destiny and build a sustainable and prosperous nation using clean energy and responsible mining practices,” he stated.

He said the country must therefore unlock the full potential of the mining and energy sectors for local industrialisation.

He said that must be done in a manner that ensures energy efficiency, environmental protection and responsible ecosystem management for climate action. 

Commitment to sector

The Chief Executive Officer (CEO) of the Ghana Chamber of Mines, Dr Sulemanu Koney, said the summit served as a testament to the industries’ commitment to the advancement of the mining and energy sectors.

“Today, we gather with a common purpose and a shared commitment to deliberate on the key pillars that underpin the success of our industries.

“Partnerships, collaboration, local participation and technological innovations are the cornerstones upon which we build a resilient and inclusive mining and energy landscape,” he stated.

Security

Dr Koney noted that security was a critical pillar in the success of any mining operation.

He said the safety and well-being of the workforce and host communities, the protection of assets and investment, as well as the preservation of the environment, were paramount.

“We, therefore, recognise the indispensable role that effective security measures play in fostering a conducive environment for broad-based socio-economic development and investment through responsible mining investment.

“Through collaborative efforts, deployment of appropriate technology and adopting a holistic and integrated approach to development, we can create a secure and stable environment that allows our industries in various sectors to co-exist and leverage the presence of each other to create the synergies that undoubtedly create value for our country,” he stated.