Official website of the Ghana Chamber Of Mines

News Updates

News

Chamber interacts with Journalists for Business Advocacy

The Ghana Chamber of Mines has engaged members of the Journalists for Business Advocacy in Accra. The meeting, which is part of the Chamber’s stakeholder engagement and media relations efforts was held on Friday, 23rd July, 2021.

Speaking at the event, the Chief Executive Officer (CEO) of the Chamber, Dr. Sulemanu Koney, stated that taxes and levies on mineral exploration investments are making Ghana’s mining sector unattractive for investors.

He noted that the value added tax (VAT) placed on exploration at every stage of the process is making investors turn away from Ghana and look at other jurisdictions where the conditions are more favourable. According to him, even though many of the exploration licenses are owned by Ghanaians, most of them seek to hand them over to foreign companies because they are unable to bear the exploration cost due to the heavy taxes placed on them.

He indicated that government should allow exploration companies to use 100 percent of their exploration investment for exploration – particularly gold – rather than charging taxes and levies before the companies even break the ground to find the mineral.

“It’s one of the concerns we had and the need to provide a fertile and conducive environment for exploration companies to use practically 100 percent of their exploration investment into exploration, rather than paying taxes and other levies even before they break ground.

“So we continue to advocate and engage with stakeholders for this to happen, and our expectation is that in the not too distant future, policy makers will hear our cry and will put in place the kind of policies that will allow exploration companies to operate competitively in the country,” he stated.

Dr. Koney noted that until investors find any mineral in commercial quantities, all preceding activities like drilling, assaying and others are investments without any financial gain, so it does not make economic sense for government to keep taxing them for such activities. The Chamber of Mines CEO said exploration is quite expensive and there is no guarantee the explorer would make a commercial find, and yet “we have a fiscal regime which requires companies to make some payment before even digging the ground.”

He said the situation is making Ghana less competitive compared to other jurisdictions, which have fiscal policies that allows explorers to make commercial finds before taxing them. “We think that government should allow the exploration companies some space to explore and when they find commercial quantities of any minerals, we can all share in the benefits,” he said.

“When it comes to investments in exploration activities, we didn’t do too well in attracting investments into exploration which is the lifeblood for the sector and ensures the sustainability of the mining industry,” Dr. Koney added.

Ghana, in 2020 lost its position as the second-largest recipient of investments in gold exploration on the continent. The country lost its position to Burkina Faso who in turn lost its enviable position as the largest recipient of investments in gold exploration on the African Continent.

In first and third place are Cote d’Ivoire and Mali respectively. Cote d’Ivoire’s rise to first place, the Chamber notes, is due to a significant increase in budgetary allocation for gold exploration in Cote D’Ivoire – around $105 million. Total planned gold exploration expenditure in Africa for 2020, according to the Chamber amounted to $590 million. A reduction by some $25.9 million when compared to the $615.9 million spent by gold mining firms in 2019.

Gold production volume in Ghana fell by 12.1 percentage points in 2020, the lowest in the last sixteen (16) years – since 2004. Gold production dropped to 4.02 million ounces in 2020 from 4.57 million ounces in 2019. But despite the fall, the country, however, retained its position as Africa’s top gold producer and sixth biggest producer in the world. Ghana’s closest rival and long-term leading producer, South Africa, also recorded a 13.7 percent decline in production at 91 tonnes and remained in second place on the continent and tenth globally.

Addressing the journalists, immediate past General Secretary of the Ghana Journalists Association, Mr Kofi Yeboah commended the Chamber for continually engaging the the media on happenings in the mining industry. He stated that journalists have a significant role to play in supporting the nation’s quest to make sustainable mining the norm even among small scale operators. He urged the Chamber and its members to continue to partner the media in demanding accountability for the use of mineral revenue and the exploitation of the mineral resources.

Meanwhile, President of JBA, Sulemana Mustapha noted that large proportion of the inputs used for mining exploration and production are now sourced locally, unlike previously when most of those inputs were imported.

He also noted that local expertise in technical areas such as geological survey, mining engineering and others are growing, adding that with the establishment of the African Continental Free Trade Area (AfCFTA), which allows for duty free exports, Ghana now has an excellent opportunity to be a continental hub for mining services.

“In turning this potential into reality however, Ghana’s business media has a vital role to play, in promoting the reputation of the country’s mining support service providers so as to make them attractive to other mining countries around the continent,” he said.

Subscribe to the GCM newsletter
The latest news, articles, and resources, sent to your inbox weekly.
© 2024 The Ghana Chamber of Mines. All rights reserved.

Website by Exceed