A new agreement to establish an International Gold Assay Centre in Accra, with the potential to increase national revenues, has been signed between the Precious Minerals Marketing Company (PMMC) and Baird & Co., the British gold refinery and assaying company.
The Memorandum of Understanding was signed by Kiston Akomeng Kissi, Board Chair of PMMC, and Lorena Baird, Executive Director of Baird & Co., and will see every ounce of gold mined by small and large-scale miners and meant for export assayed at Ghana’s airport with revenue authorities notified immediately of the value and purity of the gold to generate a tax bill.
Ms. Baird, whose company is a member of the London Bullion Market Association (LBMA) – the pre-eminent standard-setting body for the global wholesale market for precious metals, noted that such a centre will bring the highest level of accuracy and transparency to Ghana’s gold sector in terms of revenue generation for government.
“Revenue authorities can now track gold down to the airway bill number. I am bringing a state of the art lab that will ensure results are given down to five decimal points, which is absolute accuracy. I am bringing the best practice with the best intentions just to make the system far more open,” she said.
The centre, which will be located in the Kotoka International Airport zone, will be equipped with the latest industrial equipment for its operations. The facilities will be manned by operational and technical experts provided by Baird working in conjunction with PMMC personnel.
The agreement, which establishes a company that is owned 50/50 by Baird & Co. and PMMC, also states that over the medium-term, Baird will provide training to PMMC staff so that they have the requisite technical experience to run the facility.
“If every gramme of gold that leaves Ghana is assayed at the same place and the software is interlinked with the revenue authority, the Ghanaian government will have full visibility of how much gold leaves the country legally.
“For example, exporter A brings in gold to export. My lab will determine the purity and weight of the gold within an hour and immediately a tax bill will be generated, and the revenue person at the facility will generate a report that shows how much gold has left Ghana. That is full transparency,” she told the B&FT in an interview after the signing ceremony.
Ms. Baird explained that the facility will have the capacity to assay 200tonnes and more gold per annum, and with Ghana producing about 100-130 tonnes per annum “we have the capacity to assay gold from neighbouring countries as well”.
Kiston Akomeng Kissi, Board Chair of PMMC, noted that the partnership is very important to Ghana because the nation will now have the LBMA certification, and revenues accrued to the state will no longer depend on what the buyer of the gold says is the price of the gold.
To him, the revenue authority and other stakeholders in the gold business, including the Minerals Commission and Bank of Ghana, will be notified immediately about the value of the gold and tax to be paid on it.
“This will help us sell our gold at the right price. Now that we have the LBMA certification, whatever price is quoted here in Ghana will be the same elsewhere in any other part of the world. Nobody can challenge the price of our gold. Whenever we assay the gold, we know the price, purity and quantity that is going out, and know how much is coming into the country.
“I can assure you that nobody is going to take gold out of the country without bringing the money back – because the system is such that when we assay the gold, the value and other details come out and every stakeholder will be duly notified on the details. There is no way anyone can manipulate the system and undertake dubious transactions,” he added.
Adam Afriyie, the British government’s trade envoy to Ghana who witnessed the signing ceremony, noted that standards are absolutely vital and the UK is known for upholding standards. He noted that this deal ensures that Ghanaian gold is correctly assayed and completely accepted on the world market in a standardised form.
“It is not just about the size of the deal but the significance of the fact that Ghana’s gold will now meet world standards, and producers, large and small, will be able to ensure they are meeting those standards. For smaller producers, I believe they will welcome this change because they will then quickly discover how much they have mined, what quality it is, and get paid for it,” he noted.
An assessment of the trade data between Ghana and its three major gold trading partners—Switzerland, India and the United Arab Emirates — revealed that over US$6billion worth of gold exports remain unaccounted for from 2013 to 2016. The figure would expectedly rise significantly if all export and import data between all of Ghana’s gold trading partners were to be examined.
For example, from 2013 to 2016 the gold import-export variance between Ghana and Switzerland amounted to over US$3billion. While Switzerland’s gold import figures revealed that they had imported close to US$7billion worth of gold from Ghana, Ghana’s official records indicated an export of a little over US$3billion.