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Ghana’s Mining Act, a Toothless Bulldog

A research carried out by the United Nations Conference on Trade and Development (UNCTAD) has said that Ghana benefits very little from the mining and exportation of gold which accounts for only five percent of the country’s Gross Domestic Product (GDP).
This situation has been attributed to Ghana’s Mining and Mineral Act 2006 which governs the activities of mining companies.
In an interview with the Advocate on the issue, Mr Daniel Owusu Koranteng, Executive Director of WACAM said, “The physical regime gives a lot of incentives and exemptions to the mining companies and thus provides the mining companies the opportunity to take the lion’s share. If you pit the five percent against the social and environmental cost, we are not getting anything.”
Mr Koranteng said the problem dates back to the early 1980’s when Ghana decided to heed to the dictates of the World Bank and the International Monetary Fund (IMF), under the Economic Recovery Programme (ERP). One of the requirements was for Ghana to open up its mining sector to foreign investors.
“The World Bank influenced our law. Hence, the law that was drafted during the period, which was PNDC law 153, served the corporate interest of mining companies to the detriment of Ghana”, Mr. Koranteng said.
Following the interventions of Advocacy organizations, the law was reviewed to the Minerals and Mining Act which is still operational today. However, not much could be achieved under the Mineral and Mining Act which was enacted in 2006.
“While Advocacy Organizations were struggling for a law that would be fair to Ghanaians and mining communities especially, the mining companies also struggled for a law that would ensure that they continue to get the lion’s share and they got away with it”, Mr Koranteng said.
“The Minerals and Mining Act, 2006, still inherited the colonial legacies of PNDC law 153. There were only a few gains like the compensation principle; it is still a neo- colonial law that does not provide adequate protection for the sovereignty and rights of mining communities and the country. The laws are very week and we need to do something about it”, he said.
Mr Koranteng said under the Minerals and Mining Act which gives a lot of generous incentives to mining companies, they do not pay import duty on machinery, while some of them do not even pay any Value Added Tax (VAT). Some of the companies have also negotiated for the retention of 80 percent of mineral revenues in offshore accounts.
“The Act stipulates that mining companies should pay royalties of only three to six percent with all the mining companies paying three percent hence we are not getting enough for development. Ghana’s investment agreement with Newmont exempts the company from paying VAT and allows it to pay a royalty of only three percent”, he said.
“The laws that we have are neo-colonial laws that ensure that the resources that we have are taken away. It is no different from when the white man was here and taking our resources away. This time we have made laws to ensure that they take everything away leaving us only five percent of the proceeds and 100 percent of the problems, including environmental degradation, pollution of rives and water sources through cyanide spillage, acid drainage and the pollution of ground water. There are also issues like air and dust pollution, and cracking of buildings through the intensity of blasting, waste rock dumps and abandoned pits and trenches”, he lamented.
Mr Koranteng cited the case of the Prestea Goldmines which alone has 45 abandoned pits. “People in mining communities fall into these pits and get killed. A pit that is 500 metres deep, a kilometer wide and 2.5 kilometees long is a small pit. Some pits are seven kilometres long and when you stand at the edge of such pits, you feel dizzy.”
He said these are pits that can never be reclaimed and would continue to trap a lot of animals and affect wildlife and bird diversity. They also get filled with water and become breeding grounds for mosquitoes.
“If you hear that a mining company has a mosquito control programme, you would think that they are helping to prevent malaria, but no, they are merely attempting to control the number of mosquitoes generated from their own pits. They have made the mosquito control programme their flagship project, purported to control malaria but mining companies have so many pits that are a breeding ground for mosquitoes”, Mr Koranteng said.

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