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Business News Sat, 23 Jun 2018

Parliament grants $259m tax concession deal to Anglogold Ashanti

Parliament has ratified the Stability and Development Agreements including fiscal concessions entered into between the Republic of Ghana and Anglogold Ashanti Ghana Limited following the adoption of the report of the joint Committee on Finance and Mines & Energy.

A tax concession worth US$259,000,000.00 was also granted to the mining company in the process at a sitting, Thursday, June 21, 2018.

The move, therefore, gives Anglogold Ashanti a lifeline opportunity to redevelop its defunct Obuasi mine.

Per the agreement, Anglogold Ashanti Ghana Limited is expected to make a capital investment of US$880million in the Obuasi mine during the execution of the agreement which will end on December 31, 2018.

According to the report of the joint Committee on Finance and Mines & Energy signed by Dr. Mark Assibey-Yeboah and Emmanuel K. Gyamfi, the redevelopment of the Obuasi mine which has a lifespan of some 22 years will have a positive net contribution to the Ghanaian economy.

For instance, the West African nation is expected to derive a total amount of US$5.3billion from the development of the mine over the 22-year period. This represents approximately 51% of the total sales revenue.

This includes direct contribution to government revenue (fiscal mechanisms), local content, as well as employment and community investment.

Out of the total contribution to the economy, US$2.2billion represents the direct contribution to government revenue over the life of the mine, representing about 21% of the total revenue pie over the life of the mine.

Out of the total contribution to the economy, local content is expected to generate US$2.4billion. The deal is expected to employ between 2000 and 2500 during the process. An additional 1500 people are expected to be employed during the construction phase.

Moving the motion for the adoption of the report of the joint Committee on the development agreement, the Chairman of the Mines & Energy Committee, Emmanuel Akwasi Gyamfi told the House that after a thorough scrutiny of the agreement and engagement of key stakeholders, the Committee was of the view that Ghana stands to benefit in the long term if the agreement was ratified by the House.

Contributing to the motion, the Ranking Member of the Mines & Energy Committee and NDC MP for Damongo, Adam Mutawakilu, said urged the government not to leave the development of the Obuasi town into the hands of Anglogold Ashanti Ghana alone after the company declared contributing US$2 out of every ounce of gold produced into a trust fund development of the Obuasi town.

On his part, the NDC MP for Yapei/Kusawgu, John Jinapor described the agreement as good news for the country following the benefit that the local community will derive from its implementation.

He therefore called for judicious use of revenue derived from the mining activities to improve on the conditions of the people.
Source: kasapafmonline.com
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