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Business News Mon, 18 Nov 2002

Mining Sector Tops In Investment

The mining sector injected about $4 billion into the economy beetween 1997 and 2001. This represents about 55 per cent of total investment in the country within the period. The Chief Executive Officer (CEO) of the Ghana Chamber of Mines, Mrs Joyce Wereko-Brobby, speaking at a press briefing in Kumasi, indicated that the sector will continue to be the single most important foreign exchange earner, contributing approximately 40 per cent of the country’s Gross Domestic Product (GDP).

She, therefore, called for expedited action on the review of the Minerals and Mining Law to enable the nation to arrest the sharp decline in investments in the sector. She said for the past 16 years the law has not seen any major change, resulting in investments declining from $911 million in 1997 to $231 million in 2001.

The situation, she said, has affected the country’s vision of becoming the hub of mining activities in the sub-region with relatively new mining countries such as Mali and Guinea making giant strides in their operations due to the attractive fiscal and legal mining regimes developed over the years.

Mrs Wereko-Brobby said the mining industry has suffered a cumulative production decline while the rest of Africa excluding South Africa, registered operational gains.

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She noted that apart from Gold Fields Ghana (GFG) and the Ashanti Goldfields Company (AGC) that are doing well, all other companies in the country “are struggling to keep their heads above water” and stressed the need for prospecting mining firms to be exempted from the payment of the Value Added Tax (VAT) on their inputs since it is a high-risk activity.

She advocated an increase in royalties that go into infrastructural development in project communities and stated that there is the need for companies, which have already made commercial finds in productive forests to proceed to mine the ore under conditions set in the guidelines developed by the stakeholders. She also called for the setting up of a long term policy for mining in the productive forest areas.

Mrs Wereko-Brobby further called on chiefs to make judicious use of royalties from the mining sector adding that if that is done, it will prevent conflicts between the chiefs and their subjects.

She disagreed with the notion that mining has resulted in environmental degradation and stated that companies that are doing legal mining business abide by environmental rules and regulations.

Source: .
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