Ghana Chamber of Mines calls for Revenue Management Law

The Ghana Chamber of Mines has called for the establishment of minerals Revenue Management Law, similar to the Petroleum Revenue Management Act, Act 815, to ensure transparency and accountability in the utilization of revenues received from mining activities in the country. It is also advocating for the passage of the Minerals Development Fund Bill into law. This, the Chamber believes will ensure the face-lift of the mining communities through infrastructural projects. The Acting Chief Executive Officer of the Chamber, Mr. Sulemanu Koney made the call at a day’s media interaction in Kumasi. He disclosed that “it’s expected that the bill when passed, will borrow from the guidelines from the utilization of mineral revenues that has been developed by the Minerals Commission. And this will ensure that the amounts returned to the districts from which mining is done are used judiciously” This Mr. Koney added is because, “the poor state of host communities continues to reflect negatively on the mining industry”. He lamented that the proportion of the total mineral royalty, which goes directly to the five District Assemblies in whose jurisdiction mining takes place represents only 4.95 per cent of total mineral royalty payments. “In 2013, mining companies paid mineral royalty in the amount of GHS364 million to the government but only GHS18 million was expected to be returned to the five mining districts for development”. He said. This amount, he described as “woefully inadequate” for the stimulation of infrastructural development in the mining communities. “The Chamber is therefore advocating for 30% of mineral royalties paid by mining companies to be returned to mining areas over a specific period of time and tied to specific infrastructural projects in order to stimulate development”. Mr. Koney said. The Acting CEO emphasized that, mining companies continue to deepen their engagements with their host communities. “Principally, mining companies have set up Trust Funds and Foundations through which they provide social amenities for their communities” Explaining that “The Trust Funds are funded through a defined formula of 1 US dollar per ounce of gold sold plus 0.5% or 1% of pretax profits” The Funds, he said are spent in the areas of education, infrastructure, scholarships and top up of teacher salaries, portable water, extension of electricity and mending roads as well as implementing Alternative Livelihood programmes for their communities by mining companies. Mr. Koney expressed grave concerns regarding the massive challenges that have bedeviled the mining industry in recent times. According to him, the high Fiscal Burden on mining companies is unbearable, “corporate tax has been reviewed from 25% to 35%, Royal rate has been varied from a range of 3% to 6% to a flat rate of 5%, capital allowance regime revised from 80% in the first and 50% on the remaining balance for successive years to flat rate of 20% over a five year period and the abolishment of the 5% investment allowance are but a few of the challenges. “Inordinate delays in refunding surplus VAT are very inimical to the activities of mining companies” he lamented. Mr. Koney said the sector is also challenged with dysfunctional rail system. “Transportation of mineral ore from the mine to the port is done via road on account of poor rail infrastructure. The cost of road freight is 50% more expensive than using road” He said. Stressing that, “this has astronomically increased the cost of transportation to the port by as much as 56% of selling price of given ore for a member company”. “Illegal mining also mar the image of the entire minerals industry, including properly regulated large scale mining firms” he added. The Acting CEO revealed that the Chamber is cooperating with the Suame Magazine Industrial Development Organization, SMIDO to facilitate the engagement of local artisans in the mining industry. SMIDO will therefore interact with management of the various mining companies to identify areas their competency may be required. “Aside creating employment opportunities, this is expected to enhance the capacity of the artisans and medium to transfer skills and technology”, he assured. Mr. Koney earlier called on the Ashanti Regional Minister, Hon. Dr Samuel Sarpong. He described the Minister’s avowed commitment to fighting illegal mining as, “remarkable and enviable”. He lauded government’s efforts at fight the menace but urged the Minister to continue in his fight against galamsey in the country, particular the Ashanti Region. Hon. Dr Sarpong, assured that government is bent of fixing the system of what he called, “the canker of galamsey” in the country. “The President is very committed to creating the required enabling environment for the mining industry” he said. The Regional Minister revealed that, another mining company has just started setting up to operate in the Region, which move, is described as one more pragmatic commitments by government to open up the industry. “This mining company will be the second biggest mining company in the Region after Anglo Gold Ashanti” he said. Hon. Dr. Sarpong charged the Chamber to operate without reservations, knowing that its government’s desire to see the industry blossom and will therefore do all it can to support the sector.