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Review of Mining Stability Agreements on course


By Fred Yaw Sarpong
Prof. Akilakpa Sawyerr, Chairman of Government’s renegotiation committee on mining stability agreements has said that the negotiation is still ongoing and they will soon come to the conclusion.
The Chairman has indicated that the negotiation involves a lot and they need to be carefully so that mistakes will not be repeated.
Prof. Sawyerr said this when he was answering questions as to what was the stage of the committee’s negotiation of the agreement at the launched of Revenue Watch Institute’s Resource Governance Index in Accra.
‘There have been difficulties since we started this negotiation. This is simple because our existing mining laws are not in favour of this country at all,’ adding that they are trying to give a better deal for Ghana.
According to him they have realise that Government at times raise resources from some mining companies for development purposes and this has affected their negotiation, even though they are trying to make the companies to understand why the need for renegotiation of the stability agreement.
The seven member team, led by Prof. Sawyerr was tasked to review, re-negotiate and redesign the entire mining regime agreements so that the state derives maximum benefit from the sector.

As part of their duties, the team was asked to review and re-negotiate any part of the stability agreement between Ghana and any of the mining companies in the country. This must be in the best interests of the country.
Also, the negotiation team is to revise the manner of granting stability agreements, and redesign any existing or draft agreement to ensure that it yields better social and economic returns for the country.

However, the mining companies have said that the changes to the mining sector stability agreement would put their investments at risk, and also they believe that the government is trying to make it difficult for them.
A stability agreement normally freezes mineral royalty and other tax-rates paid by a company over a 10- to 15-year period creating a situation where very little of the windfall earnings of a beneficiary company accrue to the state.

The stability agreements seek to protect all mining companies in the country. However, it will also going to affect some mining companies in one way or the other, which do not have such agreements, since they started operation in Ghana.

This new stability agreement allows the government to introduce a new process of bidding system for mining licences and mining certificates in the country. Before the adoption of the review and renegotiation of stability agreement, mining licences are awarded based on a first-come-first-served. Also it takes a looks at the company’s ability to deliver on its proposed activities.

The new system will see concessions put out for international tender and interested companies submitting details proving that they have the technical and financial capabilities to develop awarded concessions.

It will also bring much-needed clarity and sophistication to Ghana’s mining sector, as well as contributing to greater transparency through open, competitive processes.

Among the over 20 large-scale mining companies operating in Ghana currently, it is only Anglogold and Newmont that have mining Stability Agreements with the Government of Ghana.

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