Deputy Minister recommends cost-benefit analysis of mining

Accra, Feb. 23, GNA - Mr Ford Kamel, Deputy Minister of Mines and Natural Resources on Thursday recommended cost-benefit analysis in the mining industry to enable Ghanaians know the real cost and benefits of mining.

While acknowledging that mining is an important economic activity that cannot just be wished away, he noted that the industry needed to work in such a way that it did not engender environmental degradation, social conflicts and poverty.

Mr Kamel made the recommendation at the launch of a publication: “Natural Resource Watch” jointly published by IBIS, a Danish NGO that advocates equal access and opportunities for the poor and marginalised people in Africa and WACAM, a Ghanaian based NGO advocates against bad mining practices.

The Deputy Minister said there was the need for the nation to account for the mining revenues since about 60 per cent of the country's Gross National Product (GDP) was from mining.

GDP is the market price of all recognised goods and services produced in a country within a given period.

Mr Kamel stressed the need to tax the profit of mining industries adding that over the past decade the price of gold had witnessed significant and sustained rise and noted that it was fair that the host nation benefitted equitably.

He said to ensure transparency the Sector Ministry had decided to publish royalties given to the communities for all to know and stressed on the need for the country to improve governance of how mining royalties were used.

“We need to assign specific roles for mining revenues to be able to see the needed impact on our development,” he added.

Mr Kamel announced that government had a draft mining policy because the existing policy had a lot of potholes in terms of the policy direction citing an example of the country's inability to add value to the raw gold instead of just exporting the raw material.

He said another area to improve on was the local content which needed to be expanded to enable more local people benefit from the resource adding that government had started the process of re-negotiating the stability agreement it had with the mining companies.

He commended IBIS and WACAM for the publication, saying it would help promote cooperation in the management of the country's natural resources for the benefit of society.

Mr Daniel Owusu-Koranteng, Executive Director of WACAM, explained that the publication would provide a platform for the discussion of revenues that developing countries such as Ghana received from the mining of her mineral resources and determine whether the revenues were fair.

“Ghana needs to assess the true cost of all the incentives provided in the minerals laws of Ghana, the investment agreement and the stability agreement that government has signed with the mining companies,” he said.

Mr Owusu-Koranteng said the mining companies received very little compensation, mentioning communities like Mehame, Saaman and the like who were struggling to protect their right to maintain their farming activities.

He said it would be wrong for the country to place premium on the minimal mining revenues as against the protection of water bodies, the rights of mining communities and the livelihood of people.

Dr Tony Aubyn, Chief Executive Officer of Ghana Chamber of Mines, reiterated that mining was the leading contributor to the Ghana Revenue Authority in 2009 and 2010 and said the benefits of mining received as a nation was not just about paying taxes but there was much more ripples effects of mining.

“Let us not just look at the mining of the gold but the other industries that are created because of mining,” he said, adding that mining companies have started patronising steel balls from a local company in Ghana.

Commenting on the re-negotiation of the stability agreement, Mr Aubyn, who could not be very specific about the stance of his organisation, said they were hoping for a kind of negotiation that would lead to a win-win situation.

GNA

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