Parliament approves investment agreement with three mining companies

Accra, Dec. 18, GNA- Parliament on Thursday ratified an investment agreement between the Republic of Ghana and Newmont Ghana Gold Limited, Rank Mining Company Limited and Golden Ridge Resources Limited for the exploration, development and production of minerals in the country. The ratification was adopted by a resolution backed by 168 votes. Mrs Cecilia Bannerman, the Minister of Mines moved a motion for the adoption of the resolution.

A Report of the Committee on Mines and Energy on the investment agreement said the three mining companies are registered in the country to undertake mining operations. The companies are subsidiaries of Newmont Mining Corporation and have all been granted mining leases and prospecting licenses to undertake exploration and mining in the Eastern and Brong Ahafo Regions.

Newmont was granted a 30-year mining lease (Ahafo Mining lease) on 13 June, 2003. The lease covers an area of 286.33 square kilometres in the Tano and Asutifi District of the Brong Ahafo region. Newmont also holds a prospecting license (Akyem prospecting license) for a two-year period at Noyem and Ntronang in the Birim North of the Eastern region, the Report added.

The agreement was first laid before Parliament on Thursday 12 December, 2003 and was referred to the Committee for consideration. Newmont intends investing about 700 million dollars in the development of two mining projects over 15 years at Kenyasi and Yamfo in the Asutifi and Tano districts of the Brong Ahafo region and at Noyem and Ntronang in the Birim North District of the Eastern region. The Committee's Report said Ghana stands to earn about 641 million dollars (exclusive of expatriate income tax) on the Ahafo and Akyem projects throughout the 15-year investment period.

"An estimated number of 2,500 local jobs will be created during the construction phase of the projects, and estimated number of 1,400 jobs will be created for Ghanaians during the operation stage," the Report said.

"The payroll of these workers is estimated at 7.7 million dollars during the operation and contractual agreement with local contractors is estimated at 42 million dollars." "About 10 million dollars is estimated as expenditure for land use and crop compensation," the Report added.

Newmont is also to make significant infrastructure investment and development in the area of roads, water and power during the period of the projects.

The Report said Newmont is noted for its world-class environmental protection, reclamation and reforestation.

Mr. Seidu Paakuna Adamu, NDC-Bibiani/Anhwiaso/Bekwai, in supporting the agreement, said there was the need for a separate document containing a mining lease agreement to be made available to Parliament in addition to the investment agreement document, since that would spell out details of the responsibilities and obligation of the three mining companies.

Mr. Abraham Ossei-Aidoo, Deputy Majority Leader disagreed with the member and said the investment agreement document was enough and qualified to be ratified by Parliament since it details the investments agreement to be reached.

Another issue, which raised a heated debate, was the question of government's profits from the agreement, which raised two issues as to whether it should be based on a 10 percent government interest on the profits of the companies or 10 per cent of the net cash flow.

Mr. Yaw Osafo Maafo, Finance Minister was of the view that government stood to benefit since the agreement was based on the 10 per cent net cash flow, which meant government would always benefit from some level of profit irrespective of the profit or losses of the companies.

Alhaji Malik Al-Hassan Yakubu, NPP-Yendi, supporting the agreement, said the people in the areas stood to benefit from the infrastructure development to be embarked by the companies in terms of health, education and roads.

Alhaji Amadu Seidu, NDC-Yapei/Kusawgu, said it was a wonderful opportunity for other regions, namely Eastern and Brong Ahafo to benefit from mining companies just like the western region.

Dr.William Boakye Akoto, NPP-Birim North, said pupils in Birim North performed badly in the recent examination and therefore stood to benefit from the companies investment in education.

Mr. Alban Bagbin, Minority Leader, said it was the duty of the communities to keep an eagle eye on the activities of the companies in order to ensure that their health and environment was not compromised.