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23.10.2002 Business & Finance

Government can't open Prestea Mines

By GNA
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Government cannot open former Prestea Gold Mines because it only holds a minority share of 10 percent in the company, the Ghana Chamber of Mines said on Wednesday.

"Government does not own the mine, and therefore, cannot open it unilaterally," an official of the Ghana Chamber of Mines told the Ghana News Agency (GNA) Business News in reaction to concerns by a section of the public including the workers on the continued closure of the mine.

The Bogoso Gold Limited (BGL) and Prestea Gold Resources (PGR) each holds 45 percent shares in the then Prestea Gold Mines, now a joint venture known as the New Century Mines (NCM).

The official said years of neglect by previous operators, including PGR, had mismanaged the infrastructure of the company to the point of collapse, adding that government would have to fully subsidize the entire project if it should be reopened.

BGL, according to the official, intends to carry out a comprehensive feasibility study into the potential of the mine before doing anything to reopen it.

The Chamber said BGL has invested one million dollars in the mine over the last six months for the re-establishment of the surface and underground infrastructure.

It is also funding the care maintenance programme with the hope that the return of the mine to profitability would repay the investment.

Asked if BGL had fulfilled all agreements, the Chamber answered in the affirmative.

"BGL was only due to pay 0.8 million dollars to PGR after the start of surface mining, having already paid 0.6 million dollars.

"BGL has paid the full entitlements of ex-PGR employees and severance benefit as negotiated between PGR, the Ghana Mineworkers Union and the PGR Senior Staff Association."

On employment the official said BGL and NCM could not reinstate all former employees whose appointments were terminated by PGR until feasibility studies proved positive and the underground mine was re-opened.

The mine has proved unprofitable over the past seven years and would need significant re-capitalization to kick-start production.

"Current underground mining is not possible, but BGL believes NMC's focus is to create a safe access that could be used to conduct exploration activities necessary to define new resources," the official said.

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