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20.08.2013 Business & Finance

Newmont retains 100 per cent earnings outside Ghana

By Daily Graphic
Newmont retains 100 per cent earnings outside Ghana
LISTEN AUG 20, 2013

The Public Accounts Committee (PAC) of Parliament is to investigate the circumstances under which Newmont Ghana Limited was granted leave to retain all its earnings outside Ghana without retaining part with the Bank of Ghana (BoG).

The issue came up for discussion by the committee at its public hearing yesterday, when it dealt with the Report of the Auditor-General on the Statement of Foreign Exchange Receipts and Payments of the BoG for the half-year ending June 30, 2012.

Present at the hearing to answer questions from members of the PAC were the Minister of Finance, Mr Seth Terkper, and one of his two deputies, Mr Kweku George Ricketts-Hagan.

Also present were a deputy minister of Lands and Natural Resources, Mr Yaw Effa-Baafi; the Chief Executive Officer (CEO) of the Minerals Commission, Mr Ben Aryee; the Chief Internal Auditor of the BoG, Mr Felix Adu; the deputy CEO in charge of Finance and Administration of the Ghana COCOBOD, Mr William Mensah, and officials from the Controller and Accountant General's Department.

According to the Mining and Minerals Act, mining companies are to surrender a percentage of their earnings to the BoG to be lodged into the country's foreign exchange account to bolster its foreign reserves and stabilise the cedi as well.

But it came up during the hearing that the government, on December 17, 2003, approved Newmont's request to retain all its earnings, while Parliament ratified the request on December 23, 2003.

According to the Auditor-General's Report under review, as of June 30, 2012, 12 mining companies were noted as licensed gold exporters, out of which 11 were to surrender percentages ranging between 20 and 100 per cent of their earnings.

Foreign exchange receipts from gold export rose by $18,065,133 or 4.8 per cent from $378,753,999 in the first half of 2011 to $396,819,112 during the first half of 2012, representing 18.3 per cent of the total foreign exchange receipts of $2,168,434,943 for the period.

Total quantity of gold exported during the period was 1,937,886 ounces, as against 1,672,624 ounces for the corresponding period of 2011, an increase of 265,262 ounces or 15.9 per cent.

The rise in gold receipts was as a result of increases in total ounces of gold exported and average world market price of gold during the period.

Answering questions from members of the committee, Mr Aryee said the government was currently negotiating with the mining companies to ensure that they surrendered an appreciable percentage of their earnings from the sale of gold to the BoG.

He told the committee that as of now about 1,000 small-scale gold mining companies had been registered to operate in the country.

When he was questioned on the quantity of gold exported during the period and the amount paid into the BoG's foreign exchange account in the first half of 2012, as against what was paid during the same period in 2011, Mr Aryee conceded that something might be wrong and promised to check what happened and report back to the committee by the end of the week.

Manganese Inflows
According to the report, manganese inflows for 2012, were received from 20 per cent export proceeds surrendered to the BoG by the Ghana Manganese Company, while the company retained the remaining 80 per cent for its needs.

The foreign exchange inflow from manganese was $8,277,923, compared with $15,853,782 recorded in the corresponding period of 2011.

Oil and Gas
The total receipts from oil represented the allocation made from the Petroleum Holding Fund for Annual Budget Funding Amount (ABFA).

During the period, $131,392,190 was allocated to support the national budget.

Opening Remarks
In his remarks to kick-start the public sitting, the Second Deputy Speaker of Parliament, Mr Joe Ghartey, called on civil and public servants to be diligent in their dealings, since they could to called upon to answer questions even after their retirement.

He commended the PAC which operated during the Fourth and Fifth Parliaments and chaired by Mr Samuel Sallas-Mensah and Mr Albert Kan-Dapaah, respectively, and called on the present committee, which is chaired by Mr Kwaku Agyeman-Manu, to do far more than its predecessors.

Mr Agyeman-Manu said the committee would explore the possibility of forming a sub-committee with the task of monitoring the extent to which the recommendations of the PAC were implemented.

The Ranking Member of the committee, Alhaji Abubakari Dey, said the committee was not a witch-hunting one but rather a fact-finding one and, therefore, urged those who appeared before it to be forthcoming with the necessary information to enable the PAC to protect the public purse.

By Emmanuel Adu-Gyamerah & Mark-Anthony Vinorkor/Daily Graphic/Ghana

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