Mining companies default in dividend payment for 10 years

BY: Timothy Ngnenbe
mining companies_ghana
mining companies_ghana

The government is beginning an immediate audit of the books and operational modules of all mining companies in the country.

The move is to unravel the circumstances under which most of the companies have failed to pay dividends to the state for the past decade although they are in business.

The Minister of Lands and Natural Resources, Mr Kwaku Asomah-Cheremeh, made this known when he paid a working visit to the Golden Star Mining Company at Prestea in the Western Region yesterday, as part of his four-day tour of mining companies and some projects being undertaking under the Minerals Development Fund (MDF) in the Central and Western regions.

A Deputy Minister of Lands and Natural Resources, Mrs Barbara Oteng-Gyasi, the Administrator of MDF, Dr Norris Hammer, the Chief Executive Officer (CEO) of the Minerals Commission, Mr Kwaku Addae Antwi-Boasiako and other technical staff of the Minerals Commission were part of the minister's entourage.

Challenges

During the deliberations with the management of the company, it came to light that although they claimed to have paid $479 million in taxes and royalties, the company had not declared any dividend to the state in the last 10 years.

That development was attributed to fluctuating gold prices on the global market, power fluctuation in the country, and the shut-down of the company’s refractive plant in 2015, to make way for a new mining module.

The management of the company explained that those challenges had led to a situation where the mining entity took a business decision not to declare dividends on profit.

That did not go down well with Mr Asomah-Cheremeh who stressed that the operations of Golden Star and other defaulting mining entities would be scrutinised for them to settle the outstanding unpaid dividends.

"It is not only this company that has not paid dividends to the government as expected. If we will look into the books and find out that there are genuine concerns we will see how to handle that but if some of them are found to be hiding some things just to outwit the state, we will bring them to book and take what is due us," he stressed.

Support

While commending the company for doing well in terms of its corporate social responsibility (CSR) to the host communities, Mrs Oteng-Gyasi called for more to be done, especially to support the government's One-district, One-factory (1D1F) policy.

For instance, she asked for the company's CSR initiatives, especially the oil palm plantation project, to be linked to the 1D1F to make it impact more on local communities.

She also called on the company to help the government to fix the deplorable roads within its catchment area.

Golden Star’s response

The Acting General Manager of Golden Star Mining Company, Mr Adam Ahmed Salim, in response said the company would comply with moves by the government to look into its books because there was nothing to hide.

"We invested in a refractive processing plant in 2006 and had huge expectations of its performance but we had to shut it down three years ago because we were not making it. We had challenges with power supply and the price of gold continued to fluctuate.

"In spite of these challenges, we paid almost $500 million as taxes and royalties," he said.