It’s Official: Mining Giants Aiding Galamsey

A TARKWA-Prestea based galamsey operator has dragged Golden Star Wassa Limited (GSWL), a mining conglomerate to court, for allegedly refusing to pay an amount of US$1.6 million, being the cost of gold tailings supplied to it (GSWL).

Paul Willisey Company Limited, is praying the Court to recover the US$1.6 million and interest on the money from November 20, 2015 to date, and any other cost the Court deems payable.

The mining giant, on July 1, 2014, entered into a business agreement with Paul Willisey Company Limited to supply it with 626 trucks of gold tailings estimated at a cost of US$1.6 million for its operations.

Gold tailing, per mining terms, is the sand that had already been processed by illegal miners or galamsey operators to extract the precious mineral. Investigation conducted by The Chronicle indicates that the Paul Willisey Company Limited was to supply the mining giant gold tailings by truck with a minimum cut-off grade of 4.00g/t at its operational site.

According to the agreement, a copy of which is in the possession of The Chronicle, the Mine Geology and Mettallurgy team of GSWL shall conduct a comprehensive deep auger drilling and regolith mapping on the gold tailings to establish the true source and average grade before it is accepted.

The mining giant shall not accept any tailing that does not meet the minimum cut-off grade of 4.00g/t, the paper gathered. Also, the mine Geology team of Golden Star shall also confirm or deny any tailing brought to its operational site if the actual grade has been diluted.

Furthermore, the mining giant reserved the right to refuse to accept any such tailing which it may view as being detrimental to the treatment process and or which is deemed in the company's sole discretion as being environmentally unacceptable.

“This initial acceptance shall occur before the material is off-loaded from the contractor's transport”, the agreement spelt out. The galamsey operator was to deliver a total of approximately 1500 to 3000 tons of the tailings per day throughout the duration of the agreement.

However, after successfully completing the supply of the tailings, Golden Star is dragging its feet in honoring its part of the agreement, which is the payment, claiming that the 626 trucks of tailings the galamsey operator supplied to it did not conform to the minimum grade of 4.0g/t.

But, counsel for the galamsey operator believes that Golden Star's refusal to pay his client under the pretext that the product did not conform to the minimum grade was not based on any independent scientific testing. In a letter addressed to Golden Star, Counsel for Paul Willisey stated; “we are informed by our clients that they duly supplied 626 trips of the products, according to the terms of the MOU.

“We are further informed by our clients that GSWL blatantly refused to pay for the products under the guise of nonconformity to the minimum grades stipulated in the MOU, but continue to retain possession of the rejected products.”

He reminded the mining giant that “the sale of Goods Act requires in section 52 that where the buyer rejects the goods and wrongfully refuses or neglect to place the goods at the disposal of the seller after notifying the seller that he rejects the goods, then the buyer is deemed to have accepted the goods.

“You are hereby notified that by failing to return the products to our clients after intimating that the products failed to conform to the required specification or by failing to place the products at our clients disposal after your rejection, GSWL is deemed to have accepted the product and is under an obligation to pay for them according to the pricing mechanism set out in the MOU.

“GSW cannot be seen to probate and reprobate; that is, keep the goods and allege that the goods do not conform to the required standards. “We are instructed by our clients to demand GH¢2,275,970.70 being the balance of the products supplied to you over the period.”

Fresh information gathered by The Chronicle from reliable sources shows that for now, the Court action has been put on hold after Counsel for the galamsey operator wrote to the company to enter into fresh negotiation for the payment of the money. But, it appears the mining giant has refused to heed the call for fresh negotiation, indication of the fact that the galamsey operator may file fresh suit against the Golden Star.

Golden Star has denied portions of the galamsey operator's statement and stated in its statement of defense that available records produced by its certified weighing bridge showed that except for four day daily tonnage deliveries, the tailings fell below1000 tons and that the quality of the material had geologically been examined, which according to the company, did not meet the mutually agreed minimum cut-off grade.

This legal tussle between the mining giant and the galamsey operator has confirmed a statement by Okogyeman Kwaku Gyamprah III- Omanhene of Chirano in the Western region, who accused multi-national mining companies operating in Ghana of promoting pollution of water bodies and degradation of forest lands through illegal mining operations.

According to the Chief, though these mining giants were not directly involved in the illegal mining, popularly known as galamsey, they benefit from it through the buying of gold tailings from the galamsey operators.

It is believed that because the galamsey operators are not using sophisticated machines, they are unable to extract all the gold from the sand. The mining giants, therefore, go in to buy the left overs and reprocess them to extract more gold.

But when The Chronicle published the Omanhene's accusation, the Chamber of Mines through its Public Relations Department came out strongly to deny that mining companies were buying gold tailings.

The Chief executive Officer of Ghana Chamber of Mines, Mr. Sulemanu Koney himself denied in a question posed to him by this reporter that mining giants do engage in buying of tailings. He told this reporter that no registered member of the Chamber would buy tailings from galamsey operators.

From Alfred Adams, Takoradi