Business News of 2014-08-18

Miners groan over high cost of power

Acting Chief Executive Officer of the Ghana Chamber of Mines, Mr. Sulemanu Koney, has said that high cost of electricity and diesel are seriously impeding operations of the mining industry in the country.

Comparatively, the ex-refinery price paid by mining companies for diesel has been significantly higher than that paid by other users of diesel.

Speaking at the Ghana Chamber of Mines’ Forum for Editors in Accra, Mr. Koney explained that the energy charge for firms with consumption similar to the mining companies is 37.03 percent lower than that paid by mining companies.

Between February to August 2014, ex-refinery price spent by mining companies amounted to GH¢3,706.74, compared to the GH¢2,679.54 paid by consumers for the same quantity during the same time.

Mr. Koney observed that the high tax burden on the mining companies is affecting the industry’s fortunes.

The corporate tax rate was reviewed from 25 percent to 35 percent, and the royalties were also increased from three to six percent to a flat-rate five percent of the total volume of gold produced.

In spite of the challenges, the mining sector has been the number-one taxpayer and highest contributor to the Ghana Revenue Authority’s (GRA’s) collections over the last five years.

The mining sector contributed approximately GH¢1.1billion to GRA, representing 18.7 percent of GRA’s total direct taxes in 2013 and GH¢518million in corporate tax; representing 19.5 percent of the total company tax collected in 2013.

Mr. Koney said the producing members of the chamber retained US$3.1billion, representing 68 percent of their mineral revenue, through the Bank of Ghana (BoG) and the commercial banks in 2013.

The industry accounted for 37.6 percent of the country’s gross export revenue in 2013, reinforcing its position as a leading source of foreign exchange and a major contributor to the country’s balance of payments, he remarked.

Source: B&FT
« Previous | Next »
View Comments
Sponsor Links
News Categories
Site Menu