In Ghana, gold mining has always been a profitable venture for people in areas rich with minerals. Small-Scale Mining (SSM) is a major driver of the economy, directly employing an estimated 1 million Ghanaians and supporting around 4.5 million others. SSM has accounted for around one-third of the country’s total gold output in recent years.
According to the Ghana Chamber of Mines, SSM accounted for 34percent of gold production in Ghana in 2019, and the sector directly employed over 1 million people. In the same year, SSM contributed to about 16percent of total gold export revenues, which amounted to about US$6 billion. In terms of its contribution to Ghana’s GDP, SSM is estimated to contribute about 7percent to the country’s GDP. This figure includes both direct and indirect contributions, such as employment, tax revenues, and the supply of goods and services to the SSM sector.
Community Mining is not different from SSM in terms of its nature and regulation. SSM is a formalized method of mining regulated by the Minerals and Mining Act, 2006 (Act 703). Community Mining is a new programme introduced by the government of Ghana aimed at formalizing illegal SSM (galamsey) in selected communities across the country and diverting the interest of the youth from illegal mining to properly regulated mining. Community Mining was specifically designed to respond to the wanton illegal mining that plagued the country.
A Community Mining area is land that has been designated by the Minister responsible for Mines to encourage responsible mining by the community in accordance with Act 703 or a portion of a concession of a large-scale mining lease that has been permitted for the purpose of the tributer system.
A tributer is a person who is employed or contracted to win minerals by the holder of a mineral right or a person who is allocated a working area by the holder of a mineral right and who receives in return remuneration in accordance with the quality and quantity of the minerals won. Typically, the holder of the mineral right keeps one-third of the profits, and the balance is distributed to mining workers.
The introduction of the Community Mining Scheme (CMS)
Pursuant to the fight against illegal mining, the government has commissioned 15 CMS across the country from 98 mining concessions covering a land area of 2,174.94 acres to address the destruction caused by illegal mining. CMS are to replace illegal mining and give opportunities for people to engage in Community Mining. The thrust of this policy is to create jobs and improve livelihoods in mining communities. Further, it is to improve the working conditions of the mining operators and minimize environmental degradation caused by illegal SSM over the decades.
Regulation and administration of the Community Mining Scheme
Per the Minerals Commission’s Operational Manual for Small-Scale and Community Mining, CMS shall be implemented by the Minerals Commission and supported by the following governmental institutions: the Environmental Protection Agency, the Water Resources Commission, the Forestry Commission, the Ghana Geological Survey Authority, Metropolitan, Municipal and District Chief Executives (MMDCEs) and security services.
According to the Small-Scale and Community Mining Operational Manual, September 2021, as issued by the Minerals Commission (Community Mining Manual), Community Mining is SSM operating in line with sections 81 to 99 of Act 703. Moreover, CMS are governed by a Code of Practice developed by the Minerals Commission. The code shall guide the operation of CMS in accordance with Regulation 475 of the Minerals and Mining (Health, Safety and Technical) Regulations, 2012 (L.I. 2182). The Code of Practice shall be adhered to by the miners who are permitted to participate in CMS and shall be signed off as part of the application process.
There is a Community Mining Oversight Committee established under the CMS which is composed of all members of the SSM committee in section 92(3) of Act 703 and the Minerals Commission. The committee shall have oversight responsibility over the CMS by assisting the District Officer (the designated officer under the minerals commission responsible for mining in the district) in effectively monitoring, promoting, and developing mining operations in the designated area.
Its other functions include overseeing the administration of the permitted area under the scheme, disintegrating illegal mining and transforming it into CMS, registering holders of SSM licenses within areas permitted under the tributer system, ensuring compliance with the relevant or applicable legislation, and ensuring that illegal mining activities do not occur within the community.
Who qualifies to engage in CMS
The process of acquiring a license for Community Mining is similar to that of SSM. An applicant has to be either an individual or a body corporate. A person must qualify under Act 703, that is, to be a citizen of Ghana and also be more than 18 years of age and be registered with the District Office in the designated area. It can also be operated by a body corporate, co-operatives or partnerships, or sole proprietors based in the community.
If it is a company, there should be valid company registration documents. Other requirements include SSNIT certification and insurance coverage for staff. The company has to obtain the requisite licenses, permits, and any other authorization from relevant regulatory bodies. In addition to these, it has to demonstrate a capacity to invest a minimum capital of GH¢100,000 (which may be revised from time to time).
The process for acquiring a Community Mining license is contained in the Community Mining Manual. Under the CMS, the maximum area to be granted to a person or company is 25.2 acres in accordance with Regulation 204 of the Minerals and Mining (Licensing) Regulations, 2012 (L.I. 2176).
The Community Mining license is mainly for the extraction of minerals. Once the license is acquired, a person may win, mine, and produce minerals by an effective and efficient method and shall observe good mining practices, health and safety rules and pay due regard to the protection of the environment during the mining operation.
CMS are a subset of SSM; therefore, the law in respect of the validity of SSM licenses according to Act 703 applies to CMS. According to Section 85 of Act 703, the license is valid for 5 years subject to renewal. Act 703 makes it an offense punishable by a fine or imprisonment for a term of not more than three years or both for persons who engage in SSM or CMS without a license.
Benefits of the Community Mining Scheme
- The core object of CMS is to address the destruction that illegal mining causes to the environment and to enable youth participation in SSM.
- Illegal mining has devastating consequences on the environment thereby posing a deadly threat to human life. Some of the causes of these consequences are the use of toxic chemicals such as mercury and cyanide in water bodies, deforestation due to the indiscriminate cutting down of trees, and many other industrial activities. Data from the 2020 Ghana Rapid Health Situation Assessment Report indicates a high prevalence of typhoid, among other diseases in many mining communities.
- CMS will create jobs for the people in the illegal mining zones by ensuring that there is a total clampdown on illegal mining. For example, CMS has provided direct and indirect employment for a significant number of people, including women and youth in Tarkwa. They have also provided indirect employment to others such as tricycle riders, hawkers, and others whose services include the provision of necessities in the community.
- CMS encourages local participation. This local participation comes in the form of provision of credit facilities by financial institutions and mining support services by mining support services companies. Mining support services are essential mining services for the purposes of exploration, mining, environmental management, equipment hire, financial services, centralized processing unit, and gold trading. Prior to CMS, foreigners were involved in activities of illegal mining contrary to the Minerals and Mining (Amendment), 2019 (Act 995).
Act 995 prohibits a non-Ghanaian to provide mining support for SSM operations. Act 995 provides punishment in the form of fines and imprisonment for non-Ghanaian participation and for any Ghanaian who permits a non-Ghanaian to participate in SSM business.
- CMS will enhance the generation of revenue for the government in two important ways. The first is with the mandatory record-keeping and reporting requirements. As part of the record-keeping and reporting requirements for license holders, CMS will keep records of minerals won, quantities sold, revenue received, taxes paid, and royalties paid and payable.
The CMS Manual makes it mandatory to file a monthly report of returns from the operational activities undertaken in the mining area to the Minerals Commission. This will assist with the tracing of revenue and increase revenue for the government. The second is the prohibition of the sale and purchase of gold from unauthorized agents. Act 995 prohibits the selling and buying of minerals without a license.
The Code of Practice for SSM and CMS directs the selling of all their produce to their agents who have been duly licensed to purchase gold. This will enhance the sale of gold by ensuring that gold trading is carried out through authorized or licensed dealers. The regulated gold trading market will cause an increase in gold revenue from the CMS.
Strengthening the CMS to achieve its maximum potential
- Addressing the barriers in the small-scale mining regulatory framework
The major barriers in SSM include outdated legislation, minimal active involvement of local-level stakeholders, bureaucratic and resource-consuming processes, and limitations regarding monitoring and compliance. The bureaucratic processes typically involved in obtaining SSM licenses make it difficult for local entrepreneurs who may not be educated to comply. These processes and their associated costs, making compensation payments to landlords, and other informal costs along the chain disincentivize prospective miners from following the legal route. There are instances where foreign investors with enough capital use locals (who lack such capacity) to acquire a formal license which these foreigners use to operate illegally.
For the CMS and SSM value chain to run sustainably, mining legislation must be periodically and actively amended to address, in detail, challenges faced by applicants in the acquisition of CMS licenses.
- Strict compliance with the law
There needs to be strict compliance with environmental laws in Ghana. There should also be strict enforcement of the Environmental Impact Assessment, and the reclamation program (the process where all holes created through the mining activities are closed and revegetated) by the SSM sector. The Code of Practice for SSM and CMS states some environmental measures that should be followed. These include:
- Prohibiting the discharge of chemicals into natural drainage during operations.
- Conducting concurrent reclamation.
- Re-vegetating the reclaimed land with indigenous and economic trees e.g., acacia, casia, oil palm.
- Prohibiting mining in environmentally sensitive areas in accordance with Regulation 30 (2) of the Environmental Assessment Regulations, 1999 (L.I. 1652).
Regulatory and field officers must conduct their administrative functions in a more diligent manner to enhance compliance with these directives by community mining operators. Moreover, sanctions as backed by law, should be applied to operators who deviate from recommended operating protocols. To further encourage compliance, additional incentive packages, which promote safe and environmentally sound mining could be promoted for CMS.
- Contribution by the mining companies as part of their Corporate Social Responsibility (CSR)
CSR is one of the initiatives of large-scale mining companies to drive socioeconomic development in the country. As one would expect, mining companies should have an obligation towards communities they operate in as part of their CSR.
In the past years, mining companies in Ghana have contributed immensely to the development of Ghanaian communities with a focus on education (including scholarships), health care, infrastructure, access to potable water, roads, sanitation and agriculture. Mining companies are also expected to extend their CSR policy to cater for Community Mining and SSM. This could be through the provision of funds, equipment, and technology. Large-scale mining companies ought to embark on CSR policies that seek to strengthen and promote CMS in the communities within which they operate. There ought to be a long-term policy that ensures that citizens in host communities benefit from community mining.
- Contribution by the MMDCEs, Chiefs, and MPs
The success of the CMS cannot be fully realized without the contribution of MMDCEs, Chiefs, and MPs. Regrettably, some stakeholders are the major influencers in the activities of illegal SSM. They do this by engaging in the following acts: the illegal sale of land, compulsorily dispossessing rightful landowners of their properties, taking of royalties and other payments from the illegal miners among others. Chiefs, Queen mothers, and Assemblymen are custodians of the land and are to protect and secure the land and all natural resources.
As custodians of the land, they are to ensure that there are areas designated for CMS that do not conflict with people’s rights or interests in the land. In addition, there should be a sensitization program for these stakeholders. The program should highlight the relevant law and regulatory compliance, safe methods of mining, and the dangers of illegal mining.
- Contributions by Civil Society Organizations (CSOs) and Non-Governmental Organizations (NGOs)
Civil society organizations have a unique and adaptable role in engaging with mining sector stakeholders on a wide range of issues. In particular, they can influence and inform both government and stakeholders and can be effective brokers in designing and implementing solutions to complex social and environmental problems under the wider umbrella of a formalization process.
NGOs and CSOs are encouraged to promote Community Mining. Organizations such as SOLIDARIDAD, A Rocha Ghana, Friends of the Nation, and Fairtrade work actively in the mining space by influencing policy, providing technical, educational, and in some cases financial support to select actors (miners, regulators, communities, and landlords) within the chain.
CSOs and NGOs ought to influence policy in SSM and Community Mining by forming active CMS cooperative groups and positioning them to benefit from support services like training, investment finance, and information. Fairtrade International, as an example, identifies and certifies small-scale mining cooperatives whose members are trained to meet internationally accepted ore extraction and environmental standards. Member cooperatives further benefit from incentives like premium prices for their marketed produce.
A key priority for Ghanaian CSOs working on the extractive industries’ issues will be to
- Review past experiences of illegal mining and set vision, outcomes, and objectives for future engagement with CMS and towards amendment of the existing legislation;
- Develop an action plan that is realistic and supported by available resources to achieve an agreed outcome; and
- Rally for a flexible and cost-effective mode of application for a license which will in turn provide the opportunity for host communities to take advantage of the CMS.
These policies will assist with strengthening the CMS to achieve their maximum potential.
- Contribution by research institutions, academia, and universities
The University of Mines and Technology (UMaT) is the primary research and development institution in Ghana’s mining value chain. UMaT works closely with the Minerals Commission, EPA, Chamber of Mines (an association of commercial miners), and the Ghana Association of Small-Scale Miners to develop and adopt safe and sustainable mining methods.
UMaT also develops appropriate technologies useful for the sector including the ‘sika bukyia’, a technology for the direct smelting of gold concentrates as an alternative to mercury amalgamation. This technology has been piloted in selected mining communities nationwide with the intention of improving it for commercial distribution.
Other institutions such as African Center for Transformation (ACET) have been researching and advising on ways for resource-rich African countries to leverage their extractives sector to expand job creation, stimulate the growth of local businesses, and contribute to broad-based, sustainable development. It would be ideal for tertiary and research institutions to come up with specialized training, conferences, courses, and workshops for members of community mining. As a pacesetter, UMaT has trained about 2000 to 5000 registrants, and they have received their licensing to start mining.
The SSM sector is a major revenue driving area for Ghana. CMS is part of SSM therefore there ought to be a consistent effort by the government to enhance the regulation and promotion of CMS. The CMS programme, if properly implemented and given the required constant focus, will be one of the innovative ways to address illegal mining in the country.
Through a combination of tackling barriers in the SSM regulatory framework, ensuring strict compliance with the law, advocating for CMS-focused CSR programmes, encouraging logistical contributions by MMDCEs, Chiefs, and MPs, policy contributions by CSOs and NGOs and further contribution by research institutions, academia and universities, we may see a maximization of the benefits the CMS were intended to bring to the various communities.
Finally, there should be continued corporation among the various implementing ministries, departments, agencies, NGOs, and other stakeholders to promote mining methods that have no or a lower environmental impact, and to encourage private sector investment in the CMS.
>>>The author is a lawyer at Koranteng & Koranteng Legal Advisors. Contact: [email protected]