Business News of 2014-03-13

Minerals Commission probes Romex Mining

The Minerals Commission has begun investigations into the activities of Romex Mining Ghana Limited, a mining company which was shut down in September last year for violating mining regulations and failing to adhere to best practices.
Among other things, the company is being investigated for breaches/allegations of transferring or assigning its mineral rights to another company, FCMI Ghana Incorporated, without the consent of the minister responsible for mines and non-payment of royalties as required by the Minerals Act.
Romex’s mining lease was granted on May 24, 2012 for a period of 10 years but just a year into its operations, FMCI took over its assets, following its inability to pay a $5million loan acquired from FCMI’s parent company, Friedberg Mercantile Group Inc.
No licence to mine in Ghana
However, in response to Daily Graphic enquiries, the Minerals Commission manager in charge of monitoring and Evaluation, Mr Amponsah Tawiah, in a letter dated November 13, 2013, indicated that FCMI did not hold a mining lease or any mineral right in Ghana.
The company (Romex) also acquired its EPA permit, which expires in April 2014, on October 24, 2012 but later transferred its interest to FCMI without the stamp of the Minerals Commission or that of the Ministry of Natural Resources Lands and Forestry as required by law.
Under section 14 of the Minerals and Mining Law (Act 703 of 2006), no mineral right can be transferred, assigned, mortgaged or dealt in any manner without the consent of the minister responsible for mines.
“The commission’s record does not show that the changes referred to in your enquiries have been submitted to or approved by the minister,” the letter said.
The Daily Graphic on September 14, 2013 reported that during an unannounced visit to the mines – Aburi Goldfields, not-too-impressed officials of the EPA queried the reclamation programme of the company, describing it as a violation of mining best practice and regulations.
Environmental hazards
During the visit, the EPA found huge pits at many places which were yet to be covered. Instead of the top soil and the overburden (material that lies above the area of economic interest) being stockpiled and later used to fill the pit, it was not done.
The company’s processing plant also had oil spilled around its generator set. A tributary of the River Offin – the Ayensu stream – which runs through the company’s concession, was partially blocked and looked turbid.
The disturbing images forced the EPA to shut down the company.
Complex affair
The FCMI/Romex affair is a complex affair.
Romex holds the prospecting licence on the 52.63 square kilometre land and secured a $5 million loan to operate the mine.
This gave birth to Aburi Goldfields Ghana Limited which was established in June 2012 pursuant to a joint venture agreement between Coastal Explorations Ghana Limited and Minatura (BVI) Limited.
Coastal is owned by Ghana Gold (BVI) Ltd, which in itself is owned by Ghana Gold Corporation (Toronto).
The basic parameter of the deal was that Coastal would contribute all licences to mine the property along with the EPA permit and the plant. Minatura was to contribute for its 50 per cent ownership to put the mine in operation, which was done through Ghana Rae Gold Mines Limited. The company then began production in July 2012.
However, along the line, Minatura (BVI) Limited’s agreement was terminated.
FCMI first loaned $5 million to Ghana Gold Corp. (GGC) in October 2011. It (FCMI) was to be paid $300 from each ounce of gold produced, and also received 20 million shares to become a 33 per cent shareholder, with warrants to acquire a further 20 million shares. The loan was to be repaid by April 29, 2013.
However, the company failed to meet the payment deadline. As of April 10, 2013, only $986,531 had been paid out of the $5 million. The company commenced payment on August 8, 2012.
The default compelled FCMI to take over the operation of the mine, even though it had no licence to operate in Ghana.
Work and residence permits
Ghana Gold Corp, Coastal Explorations Ghana Limited, Romex Ghana Limited are linked to Bob Griffis who has been the key local figure in all the activities that have taken place around the Aburi Mine.
Daily Graphic checks at the Ghana Immigration Service (GIS) indicated that although Coastal and Romex have a number of expatriate employees, only one person has a resident and work permit.
GIS could not confirm the resident permit or work permit of a senior official (name withheld) of the company, who a source close to the company told the Daily Graphic had been in Ghana for the last 30 years without the two permits.
Source: graphic.com
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