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Newmont denies wrongdoing…says 80% of earnings spent locally

  • SOURCE: | qwesa2big
  • NEWMONTNewmont Ghana says almost 80% of its earnings from gold sales were retained in the country in 2012, contrary to recent claims that it repatriated 100 percent.

    The earnings retained were spent on corporate taxes, local contractors and vendors, wages and benefits and land access, the company said in a statement. The remaining 20% was spent on offshore debt payment equipment and other offshore purchases.

    “Since we started operations in 2006, the company has complied with all financial, legal and regulatory frameworks of the country, resulting in it being adjudged Ghana’s most compliant corporate tax payer in 2011,” Adiki Ayitevie, Director, External Affairs and Communications, said.
    “Newmont Ghana remains committed to partnering with the Government and people of Ghana in its bid to bring sustainable development for all.”

    Newmont was reacting to a revelation during sittings of Parliament’s Public Accounts Committee (PAC) last week in Accra — that some foreign mining companies retained a considerable share of their annual earnings overseas under binding agreements passed by Parliament in 2003, with Newmont said to have retained 100 percent offshore.

    The committee subsequently called for an investigation to establish the circumstances under which the contracts received parliamentary approval in a country desperate for foreign exchange to fund its development projects.

    “Most of the mining companies retain about 50 percent, with most of them bringing in excess of 70 percent into the country’s economy,” Dr. Toni Aubynn, Chief Executive of the Ghana

    Chamber of Mines, told the B&FT in an interview.
    “Parliament is right to investigate the mining companies; it is within their domain, but the fact is that they can check from the BoG, other commercial banks in the country and the Minerals Commission to see the retention rate by the companies,” he added.

    Section 30 of the Minerals and Mining Act 2006 (Act 703) makes provision for mining companies to retain a minimum share of the proceeds from their minerals in offshore accounts for recapitalisation.

    But Hannah Owusu Koranteng, the Associate Executive Director for WACAM, a mining community advocate, speaking with the B&FT said the country’s minerals and mining laws need to be reviewed to favour the interests of the state rather than multinational companies.
    She said there are a number of provisions in the current law that protect the interests of the companies as against interests of the state.

    The Ghana Mine Workers Union (GMWU) has also said the disclosure that mining companies retain close to 100 percent of their earnings abroad should be a wake-up call to restore sanity in the industry.

    “If today Parliamentarians are hearing that mining firms repatriate 80 percent of mining receipts, then it should be a wake-up call to all of us and a clear signal for cabinet ministers to sit up to determine the real impact of mining on Ghana’s socio-economic development,” Prince William Ankrah, General Secretary of the Union, said.
    “If the intention of the policy was to attract foreign direct investments (FDIs), we have come of age now and the time to do the right thing is now.”Botswana experienced a similar situation but took a bold step and instituted the right measures, and today they are reaping from it. We need a progressive debate on the matter because we all know what impact the current situation is having on our economy, especially on our exchange rate.”

    Meanwhile, the sector Minister Inusah Fuseini said Parliament did not do due diligence before passage of the minerals and mining law that regulates operations of the sector. “Our Parliament failed to live up to its responsibility because it had a duty through its work and committees to look clearly at the terms of the agreement — and probably disagree with some of the provisions if they had cause to do so.”

    He said Parliament has a responsibility to make good deals and sign agreements that will benefit the country. “It is not for nothing that Article 257 talks about ratification, because the mineral resources of this country are the property of the people.”
    US$560m paid to Gov’t
    According to Newmont, since mining commenced at Ahafo in 2006, the company has invested more than US$2.3billion into the country’s economy and paid more than US$560million to government in royalties, taxes and other obligations.

    It said it has directly and indirectly created over 48,000 jobs and provided about 400 local businesses with nearly US$39million in contracts.

    The company paid over US$180million to the government in royalties, taxes and other revenues in 2012, and generated nearly 10010 of the nation’s total exports, 4.5°/o of its total foreign direct investment and 1.3% of GDP in 2009.

    To date, the company has made voluntary contributions of up to US$17million to the Newmont Ahafo Development Foundation (NADeF) for sustainable development programmes in the mine’s host communities.

    In addition to its significant financial and economic development contributions, Newmont Ghana has been ISO14001-certified since 2010. ISO 14001 is a benchmark for which top international companies are assessed to ensure adherence to the highest standards in environmental practice.

    Source: BF&T

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