‘Increase royalties to 30% for mining communities’


GHANA Chamber of Mines (GCM) has stressed the urgent need for government to increase the share of the overall proportion of royalties’ revenue paid by mining firms to mining affected communities into the Minerals Development Fund (MDF) from 20 per cent to 30 per cent for a fixed period of time.


The increment, according to the chamber, would help to adequately tackle the social and infrastructural challenges in the mining affected communities in the country.


The chamber further emphasised that the amount should be set aside for a specific period of time and ring-fenced for specific infrastructural development within the mining communities.


Mining communities, the chamber noted, holders of interest in land as well as traditional and local government authorities within mining areas are expected to receive direct financial resources form the fund.


The chamber stated that the mining firms complained bitterly that royalties meant for developing their host communities were rather diverted into other expenditures, most of them in places where no mining activities take place.


According to the chamber, in 2016, for example, mining companies in the country paid mineral royalties of GH¢ 550 million to government. However, only GH¢27 million was returned to the mining district assemblies for development.


That, the chamber noted, was woefully inadequate for the stimulation of meaningful infrastructural development in mining communities.


And this worrying development has compiled the President of Ghana Chamber of Mines, Mr Eric Asubonteng, on behalf of the members of the chamber to re-echoe their voice to the central government to consider increasing the share of the minerals revenue that go into the MDF to 30 per cent to substantially impact the development of these mining affected communities.


Indeed, he maintained that what the Ghana mining industry players need to do to develop host mining communities was a deliberate strategy to ensure that revenues were judiciously applied and accounted for in a transparent manner.
He noted that: “We are committed to developing our nation, we must be committed to using our resources the best way possible, and there are so many examples to learn,” he noted.
Mr Asubonteng made the call at the 91st Annual General Meeting of the Ghana Chamber of Mines, which was held on the theme: “Harnessing the Potential of Mining to Accelerate National Development.”


The country’s Minerals Development Fund which was established in 1991 was to make available a portion of mineral royalties to be used directly for the benefit of mining communities, for research and other projects related to mining.


The fund was instituted to address development challenges affecting mining communities by setting aside a significant proportion of mineral royalties for development projects.


This introduced the mining community development scheme that will directly sponsor socio-economic development in communities in which mining operations take place or which are affected by mining activities.


Mining communities, holders of interest in land as well as traditional and local government authorities within mining areas are expected to receive direct financial resources form the fund.


But Today’s investigations have revealed that currently only 10 per cent of the mineral royalties paid by mining firms in the country was deposited in the account, while another 9 per cent was paid to host communities.


In all, Today gathered that about 5.5 per cent of the total mining royalties went back to mining communities themselves, since much of the revenue which went through the local governments was used as recurrent expenditure for administrative work.


Today understands that the 5.5 per cent of total mineral royalties that went to mining communities was inadequate to meet their development aspirations, hence the chamber’s request for 30 per cent of the royalties to be returned to mining areas over a specific period of time.


On the Local Content practice of member-companies of GCM, Today learnt that out of the total number of 12,294 people employed in the mining industry in Ghana, 98 per cent were Ghanaians while only two per cent were expatriates.


This figure, Today was told, excludes the over 50,000 people who indirectly depend on the presence of mines in these areas for their income.


According to our Investigations, there was a list of 27 existing and potential direct local content mining inputs that local companies could take advantage of.


Data gathered by Today from the mining supply managers showed that it was possible to increase by 66 per cent of what mining firms spent on Ghanaian manufactured products in the long-term.


This, Today learnt, would raise the annual average of goods directly sourced from the country from about one billion US Dollars to 1.6 billion.




Writer’s email: freeman.koryekpor@todaygh.com

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