Mineworkers’ Union basks in COVID-19 gold price spike

General Secretary of the Ghana Mineworkers’ Union of TUC, Abdul-Moomin Gbana

The newly elected General Secretary of the Ghana Mineworkers’ Union of TUC, Abdul-Moomin Gbana, addressed the mid-year National Executive Council meeting last weekend in Sunyani, capital of the Bono Region, and commended government for its bold response to the COVID-19 pandemic.

He noted that the pandemic outbreak has not been only doom and gloom, since for the gold industry the story is completely different as the industry is standing out as the utmost beneficiary of the global health crisis.

“Gold has since beginning of the year seen an unprecedented break-through in its price; it soared above two thousand US dollars an ounce (US$2,000/oz) as of August 2, 2020.”

The World Gold Council has posited that “Gold has been on a generally positive trend for the past few years. However, onset of the global COVID-19 pandemic has made gold’s relevance as a hedge even more apparent, and accelerated its price performance”.

Gold increased by 17% during the first half of 2020, moving up by an additional 10% in July. This spike in the price of gold led to a June 2020 average of US$1,732.22/oz and the highest price of US$1,786.04/oz since 2012.

“An all-time record price of US$2,051.02/oz was recorded in August 5,2020 – ostensibly due to the new wave of infections that were being recorded in countries such as Germany, South Korea, Australia and Japan which appear to have contained the pandemic much better,” Gbana noted.

“This positive development in the global gold industry will undoubtedly impact the bottom-line of mining companies, including those in our industry in Ghana – especially given our uninterrupted operations since the pandemic broke out,” he added.

General Secretary Gbana however cautioned captains of industry to hasten slowly in making expenditure decisions on the windfall that is likely to accrue, because any attempt to rush into wanton dissipation of the funds by paying unreasonable dividends to shareholders and prioritising the payment of executive compensation, or by engaging in questionable procurement, or suspicious project acquisitions will not augur well for the industry’s future.

He noted that while some sceptics of the mining sector are already advocating for a windfall tax amid the surging gold price, which may be a fair call, the Ghana Mineworkers’ Union holds a different view.

“The Ghana Mineworkers’ Union is of the firm believe that the highly favourable commodity price demonstrated so far – and the potential windfall it brings to mining companies and the industry – presents a huge opportunity not just for job creation, but to be a very important catalyst for economic growth and a path to economic recovery post COVID-19.

“To this end, we expect government to leverage this huge windfall that will ultimately accrue by demanding from mining companies, as they get into their next budget cycles, to present ambitious recapitalisation plans particularly targeted at modernising mining infrastructure and systems; and expanding exploration activities, ultimately increasing production, backed by a monitoring mechanism to ensure these plans are fully and strictly complied with.

“This, we believe, is a more progressive alternative to windfall tax, and would place the mining industry on a sound footing to create additional jobs and ultimately respond to the increased unemployment numbers brought about by COVID-19 in the short and long run; extend companies’ life-of-mine, and by extension the industry; grow the industry’s contribution to the national kitty through taxation (direct and indirect); and also contribute to improving the infrastructural development needs of host communities.”

Gbana also stated that the solid decent work gains achieved in the industry over the years are fast eroding, because of the increasing role of private employment agencies and increasing use of non-standard forms of employment by some companies in furtherance of their profiteering agenda.

“As a trade union, we find it difficult to comprehend why successive governments – after 18 years of implementing the Labour Act – has failed to operationalise even one of the public employment centres under Section 2 of the Act to play the critical role imposed on the state under Section 3.

“Yet Labour ministers continue to conveniently grant executive permission to private employment agencies, most of whom are a creation of employers for the ultimate purpose of making workers worse-off under the labour flexibility scheme for the ultimate profiteering motives of companies – particularly multinationals,” he added.

“Let me use this opportunity to serve notice on all companies and private employment agencies, particularly in the mining industry, whose sole agenda is to profiteer, abuse and resist the right of workers to form or join trade unions of their choosing, to amend their ways forthwith or face the wrath of the Ghana Mineworkers’ Union and the TUC (Ghana) in the coming months.”

Commenting on government’s ‘Community Mining Programme’, Gbana stated that the Research Department of the Ghana Mineworkers’ Union has been assessing the programme’s success and will put forward its observations at latest before end of the year, ostensibly to inform policy reform and reposition the initiative to achieve its intended outcomes.

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