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Investigate lapses in transfer of mineral royalties - GHEITI Report

By: By Ama Amankwah Baafi
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A new mining report has recommended that the Office of the Administrator of Stool Lands (OASL) and mining communities investigate the lapses in the transfer of mineral royalty receipts to communities impacted by mining.

The Ghana Extractive Industries Transparency Initiative (GHEITI), report on the Mining Sector 2017-2018, has revealed that data from the OASL indicates that the last transfer of mineral royalty receipts to communities impacted by mining was made from payments made by mining companies in the period April to June 2014.

It said disbursement in 2017 was expected to commence with payments by mining companies for the period dating as far back as July 2014.

However, it was observed that the first payment in 2017 was made from payments made by mining companies between January and April in 2017.

“It is recommended that the OASL and the communities investigate the situation to ensure that any lost revenue is recovered,” states the report launched in Accra on March 11, 2020.

The OASL is mandated by Article 267(2) of the 1992 Constitution and the OASL Act 1994 (Act 481) to collect stool land revenue and to disburse same to the beneficiaries.

The OASL is also responsible for collecting ground rent.

Some highlights 
The report observed that investment / stabilisation agreements had varying applicable sliding scale of royalty rate for different companies.

It cited that in the event of gold price reaching US$1,750, Goldfields would pay royalties at 4.0 per cent, AngloGold Ashanti would pay at 4.5 per cent, while others would pay 5 per cent.

“There should be applicable rates for companies with Stability Agreements in order to ensure equity and a level playing field,” the report recommended.

"The EITI is an international initiative among governments, companies and civil society groups to promote transparency in the flow of revenues from extractive companies to host country governments based on a set of criteria for transparent reporting on the revenue streams and other benefits."

Exports of minerals
The export quantities of gold increased marginally in 2018, about 3.2 per cent (4,244,617.40) over that of 2017 (4,112,899.56).

The value of gold exports was US$5,435.71 million and US$5,786.60 in 2018 and 2017 respectively.

Manganese recorded an export value of US$297.03 million in 2018 (quantity of 4,386,093.73) and US$161.93 million in 2017 (quantity of 2,853,692.00).

Overview of the mining industry
Among the major mineral resources Ghana is endowed with are gold, diamond, manganese and bauxite.

Gold is the predominant mineral produced in the country and accounted for 96 per cent of all mineral revenues in 2017, states the Minerals Commission (MC).

There are occurrences of little explored deposits of industrial minerals including iron ore, limestone and clays. There is also a huge potential for solar salt production.

Background
The EITI is an international initiative among governments, companies and civil society groups to promote transparency in the flow of revenues from extractive companies to host country governments based on a set of criteria for transparent reporting on the revenue streams and other benefits.

The purpose of the initiative is to encourage greater transparency in the extractive sector. This would enable citizens to make informed demands for the fair and sustainable use of revenues generated through the exploitation of natural resources.

The EITI requires implementing countries to prepare and publish an annual report disclosing company payments and government revenues from the extractive sector.