The Minister for Lands and Natural Resources, Emmanuel Armah-Kofi Buah, has outlined major reforms in the new Mining Act currently before Parliament, which he says will transform mining communities, stop licence speculation and significantly increase Ghana’s mineral revenues.
Speaking at a seminar organised by Geological Engineering Students of the Kwame Nkrumah University of Science and Technology (KNUST) under the theme “From rocks to resources to results – leading Ghana’s extractive future,” the Minister said communities where mining has gone on for years have seen no visible impact.
He said the government is changing that by making Community Development Agreements mandatory as part of the larger mining lease agreement to be signed by the Government of Ghana, where mining companies will sit down with communities to agree on development projects.
To the Minister, communities will no longer be told they cannot be employed because they lack qualifications, as companies will be required to help produce the next professionals in the field within a specified number of years.
“Don’t come back and tell the communities they can’t be employed here because they don’t have the qualifications. Let’s have an agreement with the communities that in the next ten years, the mine is going to help us produce the next geologists and engineers from this village or mining community,” he said.
Mr. Buah said the government is also introducing District Mining Committees to curb the practice where miners show up in communities with licences from the Minerals Commission without the knowledge of chiefs and without verifying the use of the land at the time.
Illegal mining is among the biggest challenges of the country’s mining sector, threatening lives and communities.
Statistics from the Ministry show that Ghana has 288 Forest Reserves, with almost 50 of them completely impacted by illegal mining. This amounts to almost nine thousand hectares destroyed, equivalent to twelve thousand five hundred football fields.
This has further affected air quality and water sources, as almost 60 percent of the country’s water comes from forest reserves.
Research shows turbidity levels of river bodies are now between five thousand and twelve thousand, against the acceptable level of 0 to 500, making water treatment almost impossible.
“Two weeks ago I was with the NAIMOS. Today, I can tell you that this issue of illegal mining must be our collective responsibility,” he said.
He called on students to lead the fight against the canker, stressing the need for collective action to preserve the environment for future generations.
A key focus of the new law, which seeks to revamp the 2014 mining policy, is ending licence speculation where individuals acquire reconnaissance licences and hold on to large tracts of land for years, waiting for investors without doing any work.
“The new law is to provide a five-year exploration mining licence. Two years with conditions; if you meet those conditions, we expand it for five years. After five years, if you can’t find the gold, let’s give the land back to the community to start farming,” he said.
The Minister also disclosed a major shift from the decades-old flat royalty regime, where a production cost of around 1800 dollars per ounce was used as a benchmark even when gold prices soared to 4000 and 5000 dollars, allowing companies to claim excess profit.
“For decades, we had a flat regime of royalties, so a mining company will negotiate with Ghana that the cost of producing an ounce of gold will be around 1800 dollars; that becomes a benchmark. Gold prices may go all the way to 4000 dollars, and they are claiming the profit, and we’ve locked it up,” he said.
He said the government has now introduced a sliding scale from 5 to 12 percent that rises when prices go up and drops when they come down, ensuring a reasonable return on investment for companies and higher royalties for the state.
According to the Minerals Income Investment Fund, Ghana received 7.82 billion cedis as royalties between January and September this year, compared to 3 billion cedis under the previous regime, saving Ghana over four billion cedis.
Meanwhile, the Minister encouraged students to work hard to attain the necessary academic heights as the government makes efforts to improve local content in the mining industry.