Stability privileges to mining coys to be cut to 5yrs

Adnan Adams Mohammed
Mining companies operating in the country and enjoying
privileges under stability clauses will by next year see a cut in the number of
years to five (5) from fifteen (15) as captured in amendment proposals of the
Minerals Commission.
The Commission which is currently undertaking stakeholders’
validation of its proposals for the amendment of Minerals and Mining Act, 2006
(Act 703) proposed a reduction of the upper limit of the stability period of 15
to 5 years under Article 48(1).
A stability agreement, which are signed between the
government of Ghana and companies, normally freezes mineral royalty and other
tax-rates paid by a company over a 10- to 15-year period creating a situation
where very little of the windfall earnings of a beneficiary company accrue to
the state.
“Ghana’s stability clause is the clause is the most generous
in the world”, Lawyer Martin Ayisi, Dep. CEO (Promotion & Development) at
the Minerals Commission indicated at a workshop organized by the Natural
Resources Governance Institute (NRGI) for CSOs in Accra yesterday.
The stability agreement seeks to protect the investment of
the companies due to the risk of mining and it being an expensive venture.
However, it is not all mining companies that have such agreements, since they
started operations in Ghana.
According to the Minerals Commission, out of the several
mining companies operating in the country, only three (3) gold mining companies
(Anglogold Ashanti, Newmont Ghana and Goldfields Ghana) have the stability
clause.
Currently, Tanzania has upper limit of 10 years of stability
agreement while DR Congo give a maximum of five (5) years for stability
agreement now reduced from 10years previously. These provides enough basis for
Ghana to also achieve the changes it is proposing.
In 2015, the Government of Ghana announced its intention to
review stability agreements between the state and all mining companies
operating in the country.
It then proceeded to set up a seven-member team headed by
Prof. Akilagpa Sawyerr to review, re-negotiate and redesign the entire mining
regime agreements so that the state derives maximum benefit from the sector.
As part of their duties, the team was asked to review and
re-negotiate any part of the stability agreement between Ghana and any of the
mining companies in the country in the best interests of the country.
Also, the negotiation team was to revise the manner of
granting stability agreements, and redesign any existing or draft agreement to
ensure that it yields better social and economic returns for the country.
But while answering some questions from journalists in
Accra, Prof. Sawyerr said, “There have been difficulties since we started this
negotiation. This is simple because our existing mining laws are not in favour
of this country at all.” Adding that, they are trying to give a better deal for
Ghana.
According to him they have realised that Government at times
raise resources from some mining companies for developmental projects and this
has affected their negotiation, even though they are trying to make the
companies to understand why the need for renegotiation of the stability
agreement.
However, the mining companies have said that the changes to
the mining sector stability agreement would put their investments at risk. They
are of the belief that the government is trying to make things difficult for
them.
A stability agreement normally freezes mineral royalty and
other tax-rates paid by a company over a 10- to 15-year period creating a
situation where very little of the windfall earnings of a beneficiary company
accrue to the state.
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