Public Agenda (Accra)
Selorm Amevor
17 August 2007
Accra — Participants from mining communities who attended a four day sensitization workshop at Tarkwa have appealed to government to review all royalties, rentals and fees paid by mining companies to government to match their ever increasing profit in the gold business.
The participants drawn from various parts of the country were of the view that with mining companies making huge profits as a result of the increasing demand of gold in the international market, it is unacceptable for them to be paying three percent royalties.
Ms. Joan Manu , the Organizing Secretary for the Concerned Citizens of Dumase, a mining community in Begoso said the low royalties being paid by the mining companies is the cause of underdevelopment in areas, where gold is mined.
She said it was unfortunate that most communities where gold is mined are among the poorest in the country.
"The youth in these mining communities are unemployed, no modern hospitals, major schools, markets and even good drinking water, despite all the huge profit they declare at the end of every year", she said
She said most of these mining companies before operating in the communities promise the indigenous people employment and all other basic needs, but after they have gotten the land they desert the people.
Mr. Daniel Owusu Koranteng, the Executive Director of WACAM called on government to investigate the reasons for the payment of the low rate of royalties at a time when the mining companies are enjoying a boom in their business.
He said section 25 of the Minerals Act 2006 (Act 703) enjoins mining companies pay to government not less than three percent and not more than six per cent royalties on gross minerals mined.
"But in practice all mining companies, whether big or small have over the period been paying the lowest rate of three percent to government", he added.
He therefore called on government to ensure that mining companies increase the percentage or the Act on which they base their argument be amended to ensure they pay a higher rate.
Mr. Koranteng in supporting his call for the increase in royalties cited a research report by Pricewater House Coopers which said that the global mining industry had a tremendous year in 2006 with profits up to 64 per cent.
Explaining further he said gold prices are now at an all time high of about 650 dollars per ounce although most mining companies like Newmont Gold Ghana Limited, Anglogold Ashanti limited pegged their prices at 370 dollars per ounce as against an operational cost of 250 dollars per ounce for the year.
According to Mr. Koranteng the mining industry is even confident that the price of gold could hit a thousand dollars per ounce by the end of the year and said despite the huge profits, mining communities continue to face environmental problems.
The Executive Director said large scale environmental degradation, destruction of water bodies and the displacement of local people without the requisite compensation are part of the many problems mining communities grapple with when these mining companies invade their villages and towns.
Mrs. Hannah Owusu-Koranteng, the Director of Training and Research at WACAM said the country has been effective in attracting mining investments, but unfortunately the lack of an effective regulatory framework has resulted in minimal benefit to the country.
She said it was unfortunate many mining communities do not have the adequate technical information on which they could make their informed decisions on mining investments.
Mr. Stephen Yirenkyi, the Public Relations and Community Affairs Manager of Gold Fields Ghana Limited Tarkwa Mine, said any moves by government to increase the percentage being paid by the companies in royalties may lead to some of them folding up and relocating to other countries.
He was of the view that as much as the current three per cent might seem to be small the advocates for an increment must not forget that other activities goes into getting the gold onto the international market and since no company works to lose profit, if mining companies should find Ghana unattractive they will leave and invest in other countries that are investor friendly.
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