PMMC wallows in GH¢65.5 million legacy debt
The Precious Minerals Marketing Company Limited (PMMC) has appealed for the government's intervention to deal with a legacy debt of GH¢65.5 million the company is currently grappling with.
The debt, which was GH¢30 million in January 2017, ballooned to GH¢65.5 million as of the end of December 2021.
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This is despite the fact that the company has managed to clear GH¢15.5 million of the legacy debt between 2017 and 2021.
According to the Managing Director of PMMC, Nana Akwasi Awuah, the development had negatively impacted on the company's finances, making it difficult for them to balance the books.
Visit
This came to light when a Deputy Minister of Lands and Natural Resources, Mr George Mireku Duker, paid a working visit to the PMMC last Wednesday to learn at first hand the operation of the company.
During a meeting with the management of the PMMC, the Acting Finance Director, Mr Mohammed Abubakar, presented the company's financial situation to the minister.
The presentation brought to the fore the impact of legacy debts on the company's finances.
Debt albatross
Nana Awuah said although the company had made frantic efforts to clear the debts, it appeared more of an albatross as it kept increasing.
"As of January 2017, it was GH¢30 million, but we have been able to pay GH¢15.5 million, which is about half of the amount. However, it is a debt which continues to attract interest, so although we pay every month, the interest keeps building on it. It is like fetching water into a basket," he said.
He added that in 2019 and 2020, the legacy debt represented 66.2 per cent and 69.4 per cent of the company's total revenue, respectively, while in 2021 rose to over 100 per cent.
Withholding tax
The PMMC Managing Director commended the government for reducing the three per cent withholding tax on unprocessed gold to 1.5 per cent.
He explained that the move had started yielding positive fruits for the company.
"If you look at 2021 when the tax was in full effect, we recorded diminishing figures to the point that by December 2021, we did only GH¢59,890. Since the reduction of the tax from three per cent to 1.5 per cent, we realised GH¢312,000 as revenue from assaying fees in January this year," he said.
Prompt action
Mr Duker described the legacy debt as a worrying development and said urgent action would have to be taken to deal with it.
"This is something that we need to sit round the table with the Ministry of Finance and other stakeholders to hurriedly find a lasting solution to and I will take up the issue with my minister," he said.
The deputy minister also said it was refreshing news that assaying fees had seen a sharp increase after the reduction of the withholding tax on gold by 50 per cent.
He said there would be more stakeholder engagement to explore the possibility of bringing the tax further down.
Local gold refining
The Tarkwa-Nsuaem Member of Parliament (MP) urged the PMMC to lead the way as the country strived to retain some threshold of gold for refining locally.
He said the local refining of gold was critical because it would create more jobs and boost the local economy.
Again, the deputy minister asked the PMMC to collaborate with other stakeholders, including small-scale miners, on the retaining gold policy and the need to build local capacity.
He underscored the need to establish local gold buying offices in mining communities to deal with the issue of black marketing and ensure that all gold produced in the country was routed through the PMMC.
"The government has rolled out community mining scheme concept in mining communities. After production, what do we do with the gold? We must think about collaborating with entrepreneurs to establish offices in the communities to buy the gold so that assaying services of PMMC can be enhanced," he said.
