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Business News of Friday, 18 January 2013

Source: citifmonline

Mineral royalty payment is not backed by law - Civil Society

The Chairman of the Civil Society Platform on Oil and Gas, Dr Steve Manteaw has proposed that the 10% royalty payment to mining communities must be scraped as it is not backed by law.

According to him, although the resources are put in specially designed funds for the host communities, equal distribution is not realized as citizens of most mining communities have several concerns on their livelihoods.

In an interview with Citi Business News, Dr Manteaw said agitations by some chiefs for percentages of natural resource revenues can be addressed when royalty payment are scrapped.

“The Payment of Royalties is not backed by law as it is borrowed by a constitutional provision in respect of stool land revenue, but mineral royalty is not stool land revenue and that is why I say the practice is not backed by law.”

Ghana’s Minerals Development Fund (MDF) was established in 1991 to make available a portion of mineral royalties to be used directly for the benefit of mining communities, for research and other projects related to mining.

In 2010, before its amendment, Ghana’s Minerals and Mining Law, Act 703, stated that mining companies are expected to pay royalties ranging from 3% to 6% on the revenue realized from the ounces of gold ore mined from the bowels of the country’s earth.

Although most mining communities currently receive 10% of mineral revenues from mining companies, the Chairman of the Civil Society Platform on Oil and Gas said the proper rationale of the royalty payment can be realized when it is backed by law.

Dr Manteaw noted that “it is only proper that it is backed by law and the basis are spelt out in law, then it will be seen to be applied evenly across board; we need to interrogate whether there are extra budgetary pressures on the districts in the western region as a result of mining exploration and production; and then see how we address them.”

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