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PMMC CEO: Big mining firms under-declaring output

  • SOURCE: | qwesa2big
  • MININGSome of the big mining firms in Ghana under-declare their output, Chief Executive Officer of the Precious Minerals Marketing Company (PMMC) George Abredu-Otu has said.

    Without mentioning names, he said: “They are all doing what we call the under-declaration and under-invoicing. The big ones are doing it. It’s not everything that we can sit here and say [but] they are doing it.”

    “They produce one tonne and they come and declare that its 50 [kilos], who is there to verify?” Mr Abredu-Otu said on Class91.3fm’s Executive Breakfast Show hosted by Ekow Mensah-Shalders on Wednesday February 24.

    He also said the government must renegotiate all agreements with the big mining firms since the royalties those firms pay to the country are paltry. “If you ask me, my personal opinion…I think all these agreements should be renegotiated; the five per cent royalty, the two per cent, the seven per cent royalty.”

    The Government of Ghana in December last year said it had renegotiated its mining agreement with Newmont, one of the big miners in the country.

    Sector Minister Nii Osah Mills said the Government of Ghana was “satisfied with the whole agreement” in “every sense”.

    “…It’s a win-win situation…we’re both happy,” he told Joy FM’s George Wiafe in an interview.

    Per the new agreement, Newmont will pay more in royalty to the Government of Ghana when gold prices go up. By the same rule, the mining firm will pay less, proportionately, when gold prices drop. Mr Osah Mills said at the end of the negotiations, some payments were to be made upfront totalling US$27 million, which he said Newmont was organising to honour. “It constitutes some royalty payments and others all put together.”

    “It’s a good situation for Ghana, it’s a good one for Newmont as well,” Mr Osah Mills said.

    In 2012, Newmont Ghana agreed to renegotiate its 2003 mining agreement with the Government of Ghana.

    In the old stability agreement, the Government of Ghana forfeited its right, per the Mining Act, which allowed it to own up to 20 per cent shares in any mining company. Apart from that the Government also waived the payment of Value Added Tax (VAT) for the mining firm.

    Stakeholders in the mining industry, particularly NGOs including WACAM and Third World Network advocated the need for a review of the 2003 Agreement, since, in their view, it did not inure to Ghana’s benefit.

    The renegotiation was done based on a report presented to the Government by a seven-member Mining Review Committee chaired by Prof. Akilakpa Sawyer to that effect.

    The Committee was set up by President John Mahama after Newmont and AngloGold Ashanti, the only mining firms with whom Ghana has a mining agreement, opposed plans by the Government to raise corporate mining tax to 35 per cent from 25 per cent, as well as introduce a 10 per cent windfall tax.

    Mr Osah Mills said at the time that following the successful renegotiation of the agreement with Newmont, “the next in line for renegotiations is AngloGold Ashanti, so, we are in the process of beginning those negotiations and we hope that equally will go beautifully.”

    “We have the track-record now, we know exactly how to go about it, We know exactly which clauses will be of interest to both parties to renegotiate so we’re going to use what we learned from the Newmont agreement going forward with AngloGold and others,” Mr Osah Mills said.

    AngloGold Ashanti and Newmont Ghana are the only two mining companies with whom the West African country has signed such agreement.


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