General News of 2014-01-27

Mining windfall tax: Mahama must stop whinnying and lead – Arthur K

Former Presidential Aspirant Dr Arthur Kennedy says President John Mahama must stop whinnying and fight neo-colonialist mining firms that are plundering Ghana’s resources.
Dr Kennedy, in a statement, wondered if President Mahama will “stand and fight as one standing where Nkrumah stood proudly or is he just going to whine? Mr. President, fight. Fight for Ghana! If God meant for our natural resources to enrich others, he would have put them elsewhere. Lead, Mr. President, LEAD!!!”
His admonishing comes on the heels of President Mahama’s complaint, while at the 2014 World Economic Forum in Davos, Switzerland, that mining firms in Ghana are holding his Government to ransom with regard to the implementation of a 10 percent windfall tax.
According to the president, mining companies have forced the West African country which is Africa’s second largest gold producer, into suspending the implementation of the tax introduced in the mining sector in 2012.
He said his government has not been able to implement the policy due to threats from the mining companies to layoff many workers should the tax be rolled out.
“They threatened to lay off workers if we implemented the windfall tax and because we needed the jobs and you don’t want workers laid off you are coerced to go along. So these are major issues we have”, he bewailed. “…They will not allow us to implement a windfall tax in our country”, President Mahama said.
Implementing the windfall tax regime would mean mining companies will be compelled to pay 10 percent of their profits to the Government of Ghana. The Ghana Chamber of Mines had earlier warned that the windfall tax dampen the resolve of investors in Ghana’s mining sector.
Dr Kennedy said Ghana, as a sovereign country must enforce its laws in her own interest.
He wondered: “Are we truly independent?”
“It is hard to imagine Nkrumah delivering such a whiney speech—he would have been embarrassed to do this. Indeed, a half-century ago, in his landmark speech before African leaders in Addis Ababa, Nkrumah warned against this. He said, ‘On this continent, it has not taken us long to discover that the struggle against colonialism does not end with the attainment of independence. Independence is only the prelude to a new and more involved struggle for the right to conduct our own economic and social affairs, to conduct our society according to our aspirations, unhampered by crushing and HUMILIATING neo-colonialist control and interference’”.
Ghana’s gold sector
Ghana is Africa’s second biggest producer of gold. The mining sector constitutes about 5% of Ghana’s GDP of which minerals make up 37% of total experts. Of the 37%, gold alone contributes 90% of total mineral exports. Production, according to zenithcrusher.com, rose 12 percent in 2009, with output at the country’s two biggest mines increasing. Ghana’s mines produced 2.9 million ounces in 2009, compared with 2.6 million in 2008.
Ghana’s largest mine is Tarkwa, owned by Gold Fields Ltd. The Tarkwa Gold Mine is located in south-western Ghana, about 300 kilometers west of Accra. The project consists of six open pits, two heap leach facilities, and a CIL plant. Tarkwa has a Mineral Resource of 15.3 million gold ounces and a Mineral Reserve of 9.9 million ounces. During financial 2010 Tarkwa produced 720,700 ounces of gold. For the 12 months to end-June 2011 the outlook for Tarkwa is to produce between 720,000 and 760,000 ounces of gold. Newmont Mining’s Ahafo mine produced 531,470 ounces of gold in 2009, up from 524,000 a year earlier.
Gold Fields also owns the Damang mine, located in south-western Ghana, about 300 kilometers west of Accra. The Damang Gold Mine has a Mineral Resource of 4.7 million gold ounces and a Mineral Reserve of 2.1 million ounces.
AngloGold Ashanti’s Obuasi operation produced 383,000 ounces a year. AngloGold Ashanti expects its Obuasi mine to produce around 400,000 ounces of gold per year by 2012.
AngloGold also owns the Iduapriem mine, which produces an average 190,000 ounces of gold per year.
Bibiani gold mine, owned by Noble Mineral Resources, is located in western Ghana, 250 kilometres north-west of Accra. The open-pit mine, which was commissioned in 1998, is in the Sefwi-Bibiani belt, and contains more than 17 million ounces of gold. The Sefwi-Bibiani belt is the second-most significant gold- bearing belt in Ghana after the Ashanti Belt to the east. Noble Resources plans a $9m drilling programme over the next three years.
Golden Star Resources, who has two operating mines in Ghana, poured its two-millionth ounce of gold from its Bogoso/Pretea and Wassa mines in 2009.
The Bogoso/Pretea project, in which Golden Star has a 90% interest (Ghana government owns the remaining 10%), consists of approximately 85km mining and exploration concessions along the Ashanti region in south-west Ghana. Bogoso/Presteas’s forecast for 2010 is production of 200,000 ounces.
The Wassa gold mine (also 90% owned by Golden Star), is located in the southwestern region of Ghana approximately 35 km east of Bogoso/Prestea. In 2009, mining operations at Hwini-Butre commenced and provide even higher grade ore to the Wassa mill.
Keegan Resources has two premier gold assets in Ghana. Keegan's flagship property is the Esaase gold deposit. Updated resource calculations indicate a 2.025 million ounce indicated and 1.451 million ounce inferred resource averaging 1.5 g/t and 1.6 g/t Au respectively. Development studies are currently underway that will enable the project to be brought quickly to production stage. Keegan is also exploring a second project, the Asumura gold property, is located along one of Ghana's largest and most productive gold structures.
Viking Ashanti holds over 440 sq km of ground in three project areas, Akoase, West Star/Blue River and Nchiadi/Nyame Dzikan. The Akoase project, located approximately 125km north-northwest of Accra, covers a 106km2 area in the northern part of the Ashanti gold belt.
Midland Minerals top priority project is currently the fully permitted Sian/Praso gold project, located just 30 kilometres northeast of Newmont Mining's +8.7 million ounce Akyem gold deposit on the Ashanti Gold Belt. The company also owns the highly prospective Kaniago gold project, located on the Asankrangwa gold belt. The project is contiguous to two past open pit gold producers, Abore to the north and Obotan to the south.
Besides gold, Ghana is also rich in other mineral resources such as diamond, bauxite, manganese, and oil.
Oil
Daily oil production hit 115,000 barrels per day in June 2013, significantly higher than the projected average for the year, according to the African Centre for Energy Policy (ACEP) report on Government Compliance with the Oil Revenue Management Act in the 2013 budget. Total oil revenue of GH¢1.15 billion also far exceeded the projected target by GH¢362.3 million.
Below is the full article by Dr Arthur Kennedy
PRESIDENT MAHAMA CONFESSES IMPOTENCE AT DAVOS
Orangeburg, South Carolina
Sunday, 25th January, 2014
The President of Ghana, John Mahama, has confessed to the world that despite our independence, Ghana is incapable of implementing our laws in our national interest. The President told the World Economic Forum in Davos, Switzerland last Wednesday that his government has been unable to implement a new windfall tax policy on mining because of threats from mining companies. According to the President, “They threatened to lay off workers if we implemented the windfall tax and because we needed the jobs and you don’t want workers laid off you are coerced to go along. So these are major issues we have.” He concluded pathetically “They will not allow us to implement a windfall tax in our country.”
Now, “who born dog?”
If over a century after Paul Kruger said, “This is my country. These are my laws and those who do not wish to obey them may leave”, this can happen in our country, it begs the question, “Are we truly independent?” It is hard to imagine Nkrumah delivering such a whiney speech—he would have been embarrassed to do this. Indeed, a half-century ago, in his landmark speech before African leaders in Addis Ababa, Nkrumah warned against this. He said, “On this continent, it has not taken us long to discover that the struggle against colonialism does not end with the attainment of independence.
Independence is only the prelude to a new and more involved struggle for the right to conduct our own economic and social affairs, to conduct our society according to our aspirations, unhampered by crushing and HUMILIATING neo-colonialist control and interference.”
To be fair, President Mahama’s weak, embarrassing response to this existential crisis is not original with him. He is just the last in a long line of “Nkontomire-spined” leaders who have done nothing more than hold the coats of the imperialists and multi-national corporations as they have stolen our resources, not just in Ghana but all across the developing world. Eduardo Galeano has chronicled vividly the pillage of Latin America’s resources by the West in, “THE OPEN VEINS OF LATIN AMERICA”, the book the late Hugo Chavez handed to President Obama when they met. He documents the repeated overthrow of leaders in Latin America who would not play ball. He talks also of countries and leaders who stood up fearlessly for their people and when necessary, nationalized resources—like Mexico with oil and sulphur. In Africa, one just has to look at Obuasi to appreciate how our God-given wealth has just benefited mostly foreigners, after a century in which Obuasi has produced over 28 million ounces of gold, according to an article in “Mining Weekly”, edited by Elizabeth Rebelo in July, 2004. It is still virtually a shanty-town, compared to say, Johannesburg, which has been producing gold for just as long. For the most part, our country and the relevant communities have just received crumbs from our God-given wealth that has gone to enrich others.
Disgustingly, it turns out that the tax reforms that have upset the mining companies existed prior to the 2006 review, in PNDC Law 122, according to the THIRD World Network’s Alhassan Atta-Quayson. In addition to the revenue changes, Ghana is seeking to reduce the amount that mining companies can write off for expenses, which is as high as 80%. Even the International Monetary Fund supports these changes in our laws.
Demanding a fair share of our natural resources is not anti-business. It is pro-fairness and pro-business. America holds those doing extractive business to very high standards of conduct and jealously safeguards the interest of her citizens and we must do the same. For too long, mining companies have operated in the developing world with callous disregard for the interest of their host countries. This must cease.
How do we move forward?
First, we should enforce our laws. The government must assert our sovereignty and Parliament must have hearings to ascertain why our government is refusing to implement our tax laws. This should also extend to how foreigners without the requisite documents can set up mining and other businesses while Ghanaians are jailed for petty thefts.
Second, the Extractive Industries Transparency Initiative (EITI) must be implemented with vigour and given more teeth. If Ghana is a signatory to the EITI, how did the coercive activities of the mining companies escape the NGO’s? The government must move to publicise the details of the coercion so that it can mobilise public support as it moves to assert the rights of Ghanaians.
Third, the media and the NGOs must be more active in protecting our rights. Where is the TUC when workers need them? Why are they not flexing their muscles to increase the pay of mine-workers and to make their jobs more secure? Over 3 decades ago, mineworkers from Obuasi, mobilised by the PNDC boarded buses and travelled all the way to KNUST to disrupt a NUGS Congress. Their militancy then was misdirected and wrong but militancy now, in defense of their jobs and families would be right and patriotic. Let them act.
Next, I wonder what has happened to the NDC. That is the party that, in its earlier incarnation as the PNDC, introduced the song, “We no go sit down make them cheat us every day!!” Why are they lying down for them to cheat us every day now?
Finally, what is the President going to do? Is he going to stand and fight as one standing where Nkrumah stood proudly or is he just going to whine? Mr. President, fight. Fight for Ghana! If God meant for our natural resources to enrich others, he would have put them elsewhere. Lead, Mr. President, LEAD!!!
Let us stand up for Ghana, together.
Arthur Kobina Kennedy
Source: XYZ
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