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General News of Sunday, 24 February 2008

Source: Public Agenda

Mining Companies Turn the Heat on Govt

The President of the International Council on Mining and Metals (ICMM), Mr. Paul Mitchell has pointed out that the underdevelopment in many mining communities in the country could partly be laid at the door steps of present and past governments.

According to him the cumbersome nature of the country's decentralizing system, regarding the disbursement of royalties and taxes paid by mining companies to government is a major factor for the underdevelopment of these communities.

"Currently in Ghana it takes long periods for central government to release funds to the district assemblies to embark on their developmental programs and the unfortunate part is by the time it gets to the Assembly level part of the money gets lost in transit amount," he added.

He was of the view that even though government over the years has done well by providing stable conditions to attract direct foreign investments, the lack of transparency and the cumbersome system of transferring money to the communities is making it difficult for people to appreciate the role of mining in the socio-economic development of the nation.

He therefore called on the government to rationalize the present system to ensure that district assemblies and traditional rulers also have a significant proportion of funds from royalties to develop their communities.

The President of ICMM said it is significant for people to appreciate that mining companies are not direct agents of development in their countries of operations, but a major way of contributing to the economies is through the timely payment of taxes and royalties to government.

The President of ICMM made the point in an interview at a workshop organized by the Ghana Chamber of Mines which brought all stakeholders in the mining industry together in Accra.

Mr. Mitchell said "it is significant for people to appreciate the fact that the mining industry has contributed significantly to the country's economy."

He said some practices such as the Corporate Social Responsibility programmes which sees companies building up schools, providing water and scholarships to mining communities, apart from paying royalties is the norm in global business.

According to him, the ICMM as part of its efforts to ensure transparency makes it mandatory for its members to abide by the Extractive Industry Review Initiative (EIRI) which makes it a necessity for companies to publish the royalties and taxes they pay to government.

He urged government to as matter of transparency make efforts in publishing for public knowledge the funds accruing from taxes and royalties from the activities of mining in the country.

According to him the government's inability to publish the funds received from the mining companies and the amount disbursed to the local level is making it difficult for many people to appreciate the developmental projects embarked on with funds from the companies.

"Many of the communities are of the view that any developmental project that comes into the community is from funds from the central government even when it might be from mining companies."

He was also of the view that the cumbersome decentralized system in the country makes it even more prudent for government to publish the amount they receive from the companies so that the local authorities will also have a fair idea of what to expect from them.

Dr. Nii Moi Thompson, an Economist, agreed with the ICMM President, expressing disappointment that the government finds it difficult to release funds for development in mining communities.

According to him, the government instead of releasing funds to develop the communities uses the money to engage in fruitless activities that do not benefit the entire populace.

"The issue is not about mining not contributing to the socio-economic development of the nation, it is about central government not utilizing the funds effectively; after all why can't we make Obuasi like Johannesburg in South Africa," he enquired.

The Chief Executive of the Ghana Chamber of Mines, Ms. Joyce Aryee who was the Chairperson for the occasion also buttressed the point that the industry has contributed to the socio-economic development of the nation.

According to her, many communities have witnessed tremendous socio-economic developmental growth in terms of roads, hospitals, schools, electricity etc" as a result of the presence of mining companies, though many communities will be quick to dismiss her assertion.

"Some of these communities are currently enjoying many of these facilities earlier than expected because the companies need these essential services before they can begin operation, she stressed."

The Chief Executive was of the view that even though there is more room for improvement the time has come for the government to recognize the mining industry as an agent of development rather than just receiving revenues.

According to her "it is prudent for the government to see the industry as a catalyst for growth and put in place enough pragmatic measures to rip the full benefits of the industry."

The Executive Director of WACAM, a community based advocacy group against injustices in mining communities, Mr. Daniel Owusu-Koranteng was of the view that mining has contributed insignificantly to the socio-economic development of the country.

According to him many communities have been displaced as a result of the activities of these companies and he cited the example of Newmont Gold Ghana Limited which had to displace about 10,000 landlords before starting its Ahafo Operation in 2006.

In a speech read on behalf of the Minister of Lands, Forestry and Mines, Ms. Esther Obeng Dappah, she said the government has played its part by providing the stable environment to attract Direct Foreign Investment into the mining sector.

According to her gold production of 2.24 million ounces in 2006 was 11 percent higher than in 2005 largely on the account of two new mines coming on stream namely Newmont's Ahafo Mine, as well as, the Chirano mine.

The Minister called for more collaboration between the donor community, companies, Municipal and District Assemblies and community based organizations so as to enable mining communities to also enjoy the benefits of mining.

He indicated that such displacements has often led to a total loss of livelihoods for the people since most of them are unable to utilize the little money given to them as compensation.

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