Mining communities denied royalties for two and half years – GHEITI

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Mining Companies deny mining communities royalties.

The Ghana Extractive Industries Transparency Initiative (GHEITI) 2017/2018 report has uncovered that disbursement of mineral royalties to communities affected by mining activities left a two-and-half-year gap unpaid and unaccounted for.

According to GHEITI, data gathered from the Office of Administration of Stool Lands (OASL) indicated that the last transfer of mineral royalty receipt to communities impacted by mining was made from payments by mining companies in the period April to June 2014.

Ordinarily, when disbursement was to resume in 2017 it was expected that payment would continue from where it left off (June 2014). However, it was observed that the first payment in 2017 was made from payments by mining companies between January and April 2017.

This deviation period, June 2014 to January 2017, is approximately two and half years of non-payment of mining royalties – and GHEITI is urging the mining communities and the OASL to keenly follow-up on the situation and ensure that any lost revenue is recovered, because mining activities took place extensively during that period.

The report also uncovered a varying applicable slide in investment stabilisation agreements for different companies in terms of paying royalty rates. For instance, in an event of gold price reaching US$1,750, Goldfields is to pay royalties at four percent (4.0%), while AngloGold Ashanti would pay 4.5 percent as the others pay five percent.

The GHEITI is therefore recommending that there should be applicable rates for companies with stability agreements in order to ensure equity and a level playing field; so that if company ‘A’ is paying 4.5 percent, company ‘B’ will also pay same gold price constant.

The Stability Agreement (SA) is an arrangement under the Mineral & Mining Act 2006 (Act 703) Section 48 that provides extractive companies up to 15-years recovery period to pay back their investment; and during this period, the companies are not bound by the flat five percent royalty rate.

Co-Chairperson of GHEITI, Dr. Steve Manteaw – speaking at media workshop on the newly released 2017, 2018 GHEITI report on the Mining Sector – indicated that if citizens do not open their eyes to scrutinise how revenues from extractives are used for development projects, the state will be short-changed by some influential individuals for personal interest.

He further stated that the 15-year recovery period given to mining companies in the stability agreement should not be a blanket agreement, but should be company-specific and tied to the payback period; so that if the company can recover investment within five years, there shouldn’t be any need giving the company fifteen years as it ends up short-changing the state.

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