The Minister of Lands and Natural Resources, Mr Kwaku Asomah-Cheremeh, has directed the management of the Ghana Manganese Company (GMC) to formalise the contracts between it and the 40 haulage companies it transacts business with immediately or be prepared to face the consequences.
He has also asked the company not to violate a cabinet directive asking it to stay its production of manganese at a threshold of five million tonnes per annum, else its operating licence will be revoked.
The minister gave the directives after a tour of GMC’s mining concession at Nsuta in the Western Region last Tuesday.
It came to light during the tour that the company had not signed any formal contract with haulage companies it was working with as required by the local content law.
The company was also found to have fixed its 2019 production target at seven million tonnes, a move seen to be in defiance of an agreement with the government to keep production level at five million tonnes.
Ghana News Headlines
For latest news in Ghana, visit Graphic Online news headlines page Ghana news page
Other key officials of the ministry who accompanied the minister on the tour were the Deputy Minister of Lands and Natural Resources in charge of Mines, Naana Eyiah; Administrator of the Minerals Development Fund (MDF), Dr Norris Hammah; Technical Director of Mines at the ministry, Mr Christopher Anokye and Chief Inspector of Mines at the Minerals Commission, Mr Kofi Adjei.
The tour was undertaken to appraise the operations of mining companies in the Western, Western North and Ashanti regions and to ensure that they conducted their activities within the requirements of the law and also met their financial obligations to the state.
The team also toured the mining concessions of the Ghana Bauxite Company (GBC) at Awaso in the Western North Region, C&G Alaska Mining Company at Diaso in the Central Region and the Apaparaman Forest Reserve in the Amansie West District in the Ashanti Region.
In a letter dated January 31, this year, Mr Asomah-Cheremeh gave the management of the GMC a two-week ultimatum to resolve certain operational lapses and discrepancies in their production figures or face possible suspension by the government.
The directive was followed with the establishment of an audit committee to examine the books and operations of the company and to find out if allegations of under-declaration of figures by the company were true.
According to Mr Asomah-Cheremeh, the committee would conclude its work by April 15 after which the appropriate actions and sanctions, as would be recommended, would be brought to bear on the GMC.
He said the audit exercise was being carried out while mining activities at the company were still ongoing until the findings of the committee were ready and handed over to the government for a decision to be taken on whether to revoke the company’s licence or not.
"When I served them the letter on January 31, the management of the company quickly came to the Ministry to have the issues addressed and later sent a 17-member delegation from China to the Jubilee House to meet the President, Nana Addo Dankwa Akufo-Addo, and the Cabinet.
“After some discussions, we agreed on the modalities for an audit exercise and cabinet asked the GMC not to increase its production of manganese beyond five million tonnes as they intended doing this year," he said.
Contrary to the agreement reached, however, it was found during the tour that as part of the GMCs expansion strategy, it had targeted to increase production to seven million tonnes per annum, a development which the minister said was not acceptable.
Also uncovered was that only three out of the 40 local haulage companies that transacted business with the GMC had entered into a formal agreement with the company while the others only had letters of intent from the company.
Mr Asomah-Cheremeh described the situation as a gross abuse of the law on local content and urged the GMC management to immediately initiate a process to enter into a formal agreement with the haulage companies.
"The government has passionate interest in the local content law because we want our people employed and so the required documentation that will usher them into proper business will have to be issued to them in order for the Minerals Commission to recognise them.
"The government will be furious if the GMC fails to comply with this directive, because the company will be seen to be thwarting government’s effort and we will stop at nothing to enforce the law, even if it means revoking its licence," he said.
The Chief Operating Officer of GMC, Mr Benjamin Atsu Quarshie, said some steps had already been taken to contract formally the 40 haulage companies that transacted business with the company.
"The issuance of contracts is an ongoing process and we have actually given letters of intent to the companies which is a step towards signing contracts with them," he said.
However, he said, there was going to be an imminent shakeup in the workforce because of the directive from the government asking the company to limit production to five million tonnes per annum.