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31.05.2006 Business & Finance

Calls for increased royalties for mining communities

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Accra, May 30, GNA - The Ghana Chamber of Mines on Tuesday advocated for a 30 per cent increment in royalties for communities within which mining projects are ongoing to stimulate development.

According to the Chamber, the increment should be returned to specific project mining areas over a period of time and tied to infrastructure projects that would make development obvious to the people.

Mr. Mike Ezan, President of the Chamber made the proposal when he led a four-man delegation from the Chamber to pay a courtesy call on Mr. Kwadwo Baah-Wiredu, Finance and Economic Planning Minister in his office.

Mr. Ezan said the proposed increment would not affect government revenue since the extra royalties from the new mines such as Newmont and Chirano would offset the increased percentage returned to the mining communities.

He also complained about the absence of real spatial planning policies for mining areas which was making it difficult for the industry to act as a catalyst for turning the districts into centres of development to attract more investment.

He, therefore, urged the government through the Town and Country Planning Departments to develop strategic spatial plans for the mining areas to serve as a basis for attracting other industries into these areas.

"For us corporate social responsibility is not an option but a necessity that enables companies to plough back some of their earnings to raise the quality of life of their communities," he said. Mr. Ezan said whereas traditionally mining companies have provided potable water, schools, clinics and electricity that have spurred economic growth in the communities, mining companies have moved social investments a notch higher in recent times in line with the Chamber's Alternative Livelihood Projects.

"In addition to the social investments made by mining companies there is immense scope for the mining resources in the districts to be harnessed for development. The skills acquired by mining companies employees through technology transfer could form the basis of an industrial revolution in the mining communities," he added.

Touching on Small-Scale-Mines, Ms Joyce Aryee, Chief Executive Officer of the Chamber, said the key challenge for the sub-sector has been how to wean the youth from illegal mining activities into recognized small-scale mining, which was regulated by the Environmental Protection Agency and the Minerals Commission.

She said the presence of illegal miners on companies' bona fide concessions adversely affected Ghana's image as a safe investment destination and also impacted on members' ability to contribute positively towards national development.

Ms Aryee said the Chamber was already cooperating with the national security apparatus to find lasting solution to the threat and asked government to also intervene to stop illegal activities in the mining concessions.

She also commented on deterioration of quality of electric power supply and the frequent power interruptions and line outages in the mines, which, she said, was causing the industry several millions of dollars in lost of production annually and severely impacting on their ability to contribute to national development.

She, therefore, urged government to intervene so that, at least there would be no power interruptions in the mines to enable the companies break even and also honour their tax obligations promptly. Mr. Baah-Wiredu, on his part was grateful for the proposals and promised that all the issues raised would be considered when preparing the 2007 national budget.

He said his ministry would also organize a meeting between the Ministries of Forestry, Land and Mines, Local Government and Rural Development and the Minerals Commission in conjunction with the Chamber to discuss the best ways to plan the mining communities to reflect their contribution to national development.

"If mining communities can produce that much for the country, then it is in right direction to reinvest part of the money into developing these areas to the status of any industrial community in the country," he added.

Mr. Baah-Wiredu said new mining towns and villages were also emerging and they also needed to be considered to avoid people settling in concessions and mining operation areas.

"There is always peace when people are engaged but that will not be at the expense of those who acquired the concessions legally," he said and assured both the Chamber and mining companies that every effort would be made to find solutions to the problem.

Other members of the delegation were Chris Anderson, Dr Aristotle Kotey and Richard Gray.