Local Content Law: Mining Firms Cry Over Minion Fines On Supplementary Imports
Players in Ghana’s mining sector are worried over spontaneous fines imposed on the import of certain items designated for local manufacturers and suppliers, but not procurable on the local market.
The Minerals and Mining Regulations 2012 (L.I. 2173) listed 29 products used in the mining sector that must be sourced locally, or attract full duty payment and minion charges on its imports.
This is to help increase the patronage of local materials and services to a certain minimum threshold.
The items include grinding media, lime, cement and cement products, HDPE and PVC pipes, tyres and retreading, general and specific lubricants, explosives, caustic soda, among others.
But, the mining firms claim not all of the enlisted products are readily available for purchase on the Ghanaian market, therefore must be sourced externally.
For instance, in terms of steel balls, only forged media is available in limited quantity on the local market, although the industry prefers hi-chrome media due to its high efficiency driving.
The companies said the Minerals Commission however imposes huge fines on the imports of the steel balls to shore up demand, thereby increasing their cost of production.
The miners described the development as unhealthy for their businesses when the Parliamentary Select Committee on Mines and Energy and the Ghana Chamber of Mines paid a two-day working visit to mining companies in the Western Region.
The lawmakers visited the Ghana Manganese Company Limited, Aglogold Iduapriem Mines, Golden Star Wassa Mines and Goldfields Tarkwa and Damang Mines.
Member of Parliament for Tarkwa-Nsuaem and Vice-chair of the committee, George Mireku Duker promised to engage the Minerals Commission and find a mutually-beneficial solution to their concerns.
“The visit is to get first-hand information about your operations, challenges and discuss win-win solutions. We will take your concerns to parliament and engage the regulator as well,” the vice-chair alluded.
A member of the committee and MP for Yapei/Kusawgu, John Abdulai Jinapor implored the miners to ensure the local content law reflects in value and not just the number of indigenous persons or businesses engaged.
“The local content law is meaningless if you engage thousands of businesses and the monetary value is not appreciable. So therefore you need give them big contracts and businesses to do,” Mr. Jinapor explained.