Business News of Tuesday, 3 September 2013
Source: Graphic Business
The Chief Executive Officer (CEO) of the Ghana Chamber of Mines has debunked assertions that most mining companies send their earnings abroad instead of retaining them in the country.
Dr Toni Aubynn said currently most of the mining companies retained as much as 70 per cent and in some cases 100 per cent of their earnings in local banks in the country instead of the mandated 25 per cent.
Speaking to the Daily Graphic at Akoti-Etwebo in the Sefwi Wiaso/Bibiani District in the Western Region, Dr Aubynn challenged those who were speculating that mining companies in the country were transferring their earnings abroad to check from the Bank of Ghana, the Minerals Commission or the Extractive Industry Transparency Initiative (EITI), to obtain proper records on the earnings of the mining companies.
He recalled that in the early 1980s, when the economy of the country was facing serious challenges, the government, in its bid to attract investors into the mining industry, reviewed its regulations which mandated mining companies to retain just 25 per cent of their earnings in the country.
Dr Aubynn explained that although the Minerals Act stipulated that about 25 per cent of their earning could be retained in the country, most mining companies now keep as much as 100 per cent of their earnings in banks in the country, particularly at the bank of Ghana, with the lowest being 70 per cent.
He also refuted allegations that the mining sector was a disincentive to the national economy, saying the sector currently contributed 27 per cent of the national revenue. Dr Aubynn said currently over 1000 registered small-scale mining companies were operating in various locations across the country.
According to him, in 2012, for example, mining companies retained about USD 3.2 billion, representing 73 per cent of their mineral revenue through the Bank of Ghana and the commercial banks in 2012 against a statutory requirement of a minimum of 25 per cent.
He said the sector was the number one taxpayer and highest contributor to the Ghana Revenue Authority’s (GRA’s) domestic collections, adding that it contributed about GH¢1.46 billion to GRA, representing 27.04 per cent of GRA’s total Direct Taxes in 2012.
Dr Aubynn said in spite of the immense contributions of the sector to the economy, the mining industry in Ghana was faced with several uncertainties and business risks.
For instance, according to him, since 2010, the government, its agencies and local governments had either increased or introduced a plethora of new taxes and levies on mining companies, thus increasing their overall costs significantly.
He added that the development, coupled with the recent decline in the price of gold, as well as increase in the cost of labour and capital equipment, among others, had affected the viability and sustainability of most mining operations.