Mining companies in Ghana are cursed!

The Assembly member for Sanso in the Obuasi Municipality, Hon. Benjamin Annan believes that Ghana’s mining industry is under a curse due to the maltreatment it has continuously meted out to communities in their operational areas. According to him, over a century of gold mining has failed to transform the living standards of residents of communities living in frontline communities. The grief and agony that these communities go through has become a curse to the mining industry, hence the difficulties the industry is going through.

Contributing to a panel discussion on capturing sub-national revenues for community development at a 2 day validation workshop organized by the Natural Resource Governance Institute, Hon. Benjamin Annan asked mining companies to become a lot more open and responsive to the needs of the communities in their operational areas. Failure to do this has tended to generate needless conflict that has come at a huge cost to both the companies and communities. He called on AngloGold Ashanti to place a lot more emphasis on addressing the development challenges of communities, rather than explaining that once they satisfy their statutory obligations they have no more obligations to the communities, because eventually when communities take up arms the first target is normally the companies, not the government.

The two-day workshop was used to validate findings of a research commissioned by the Natural Resource Governance Institute and undertaken by Centre for Social Impact Studies on sub-national revenue management, using Obuasi as a case study. The workshop was attended by representatives of civil society, Ghana Chamber of Mines, representatives of AngloGold Ashanti, members of the Ghana Extractive Industries Transparency Initiative (GHEITI) and Adansi Traditional Council. Some of the major findings of the study include the fact that the Obuasi Municipal Assembly generates 20 percent of its total revenue from property rate paid by AngloGold Ashanti alone. This dependency presents serious problems for the Assembly’s ability to sustainably generate enough revenue to undertake its development mandate, considering that AngloGold Ashanti is scaling down its operations for two years to undertake major repair works.

Another major finding emanating from the study is the quality of spending by the Municipal Assembly. Some expenditure items funded by mineral revenue have been questioned. For example, the construction of an entrance arch by the Municipal Assembly in 2007 at a cost of 89,000 cedis was questioned by participants who wondered the development priorities of the Assembly. Furthermore, the report revealed a number of discrepancies between what AngloGold Ashanti paid in 2010 as property rate to the Obuasi Municipal Assembly and what the assembly reported to have received.