GOV’T RE-NEGOTIATES MINING AGREEMENTS
4/29/2012 11:24:05 PM -
The Ghana government has set up a team made up of seven members to review and re-negotiate stability agreements it had entered into with some mining companies to ensure that the nation derived maximum benefits from its resources.
The review, according to Finance Minister Dr. Kwabena Duffour, was necessary for Ghana 'to maximize the flow of economic and social value from our natural resources to the country on a sustainable basis' since the nation had benefited little from dividends in a period experiencing record world prices of gold.
The first task according to the Minister 'is to review and re-negotiate any part of a Stability Agreement signed between Ghana and any mining company that is not in the best interest of the country'.
Dr. Duffour noted that 'given that the country's mining sector consists mostly of gold mines; one would have expected that the government will receive a higher fiscal take'.
He however noted that unfortunately, the phenomenal increase in gold prices in recent times has not sufficiently benefitted the people of Ghana.
The team will also determine the extent to which the stability Agreements depart from all mining leases granted to other mining companies and re-design any existing mining agreement and/or draft new agreements where necessary, to ensure support for Ghana's economic growth and development.
In addition, it will establish whether the Stability Agreements comply with the mining laws of the country, the legal regime for mining (fiscal imposition, foreign exchange regulations, duration of Stability Agreements and the provision of the country's tax laws) and the laws applicable to the agreement.
The seven-member government team for the review and re-negotiation of the Stability and Mining Agreements is drawn from stakeholder institutions including the Minerals Commission, the Attorney's General's Department, the Ministry of Finance, the University of Ghana and the Chartered Institute of Taxation and is chaired by Prof. Akilakpa Sawyer who in a similar role successfully led the Valco Agreement Re-negotiation Team with Kaiser Aluminum in the 1980's.
The chairman of the Mining sector review committee, Prof. Sawyer who spoke to this reporter praised government's determination and efforts to bring equity within the mining sector but confirmed 'it is going to be a difficult task'.
Stressing on the extreme importance of the review, Prof. Sawyer said that 'the act of negotiating these agreements at this level is political; it requires the political decision by the government in power to do so. It requires that we assert our sovereign right to our resources. This is also political'.
Prof. Sawyer assured the government, however, that members of the team will give of their best in respect of the task assigned.
In a related development, Mr. Ben Aryee, CEO of Ghana's Minerals Commission has commented on the decision of government to review all mining contracts.
He told The Al-Hajj on the sidelines at the inauguration of the committee that 'Ghana believes in the sanctity of contracts. But to all contracts there are review provisions'.
He confirmed that Ghana, Africa's second largest gold mining country has set up a committee to review Stability Agreements with mining companies. 'It will include all companies that have stability agreements', he added.
Ghana's review comes against a backdrop of a surge of resource nationalism across the continent as governments aim to extract more revenue from a sector that has failed to translate mineral wealth into broad prosperity.
By Rowland Phillips-Addo