Governor lauds Mining firms

Accra, June 8, GNA - Dr. Paul Acquah, Governor of the Bank of Ghana, on Friday lauded the increasing rate at which mining firms were voluntarily repatriating their foreign exchange earnings far above the mandatory requirements.

Under the Minerals and Mining Act, 2006, companies are permitted to retain a proportion of their export revenues in offshore accounts for the purposes of acquiring essential equipment and other payments. The retention levels have varied between 30 and 80 per cent but the progressive relaxation of this provision has meant that some companies are now completely exempted from repatriation.

Speaking at the 79th Annual General Meeting of the Ghana Chamber of Mines, Dr Acquah said the current high level of voluntary repatriation had helped improve significantly the foreign exchange inflows into the economy.

For example in 2006, 10 major mining companies exported minerals valued at 1.2 billion dollars and repatriated 781.38 million dollars instead of the mandatory 281.5 million dollars.

Despite the huge contribution of the sector to employment, community development and government revenue, there has been a lot of debate on the regime of incentives granted under the mining law, especially on the foreign exchange retention levels.

However, Dr Acquah said the new Act was promulgated in response to a need to keep the incentives for private investment in the sector right and in line with international best practice in the industry. He mentioned the Stability Agreement, which sought to protect the holder of a mineral right for a period of up to 15 years from any adverse effects of future changes in law that are capable of imposing huge financial burden on the holder, as one of the most significant features of the mining law.

"Mining companies are attracted to those countries where the policy environment allows them a reasonable prospect of commercial success," he said adding that those incentives had enabled the country to attract mining giants such as Golden Star Resources, Newmont, AngloGold Ashanti and Alcoa.

Dr Acquah urged mining companies to aim at adding value through processing some of the gold bars in the country and to also take advantage of opportunities

to integrate the sector into the local economy through encouraging local production of activated carbon, iron ore, alum, hydrated lime, all of which were natural products available in the Ghanaian economy. "Investing in the productive use of these would reinforce the sector as a pillar for rapid growth in the search to achieve a middle income status," he added.

On the performance of the industry, Mr. Jurgen Eijgendaal, President of the Ghana Chamber of Mines, said despite a mixed performance of the industry in 2006, total mineral revenue went up to 1.4 billion compared to 995.7 million in 2005.

He attributed the ambivalent production in 2006 to the electric power supply crisis that hit the industry in August last year. The Annual General Meeting was held on the theme: "Mining and the Development of Ghana; Past, Present and Future." 08 June 07