IMANI GHANA, in an alert shed light on what it stated as an alarming problem with the Agypa Royalty deal, revealing that the 2019 data on annual production volume of gold, has been spotted to have missing numbers and alarming omissions.
The Policy Think Tank who has criticized the Agypa Royalty deal opined that the alarming omissions and missing numbers were noticed, when the group did a review on the 2019 data which solidified the valuation of the Agypa deal, by making an estimation that, the average annual production volume of gold across the 48 lease areas will be 2.9 million ounces.
According to IMANI, the lease areas in the short term for gold production is estimated at around 4.2 million ounces which supports its claim that, there are some missing numbers and omissions in the 2019 data submitted by the Ministry of Finance.
From the webinar conducted by IMANI, which had learned and knowledgeable people in the area of resource governance, accountability and transparency stated that “there is a poor appreciation of the fact that since 1990, gold production in Ghana has grown at an average of 7% per year,” which contradicts government’s average annual production of gold across the lease areas.
The Policy Think Tank further revealed that estimation calculations on some of the reserves are in disarray. According to the consultative forum, the understanding that the agreement will wind up when the last of the 48 leases expires doesn’t hold, arguing that a ceaseless renewal of the Agypa deal agreement is required so far as gold is discovered and mined.
Buttressing its claim, the Policy Think Tank stated that “AngloGold’s Obuasi operations have leases that have been effectively active for over 100years,” the source added.
It further explained that in 2018, government sought for an ease for Agyapa because, the company is expected to acquire much higher grades of ore after 10years, which has Agypa extending mine life by 22years. This, IMANI Ghana said, contradicts the duration of output for 15 years in terms of 2019 reserves.
According to the webinar conducted by IMANI Ghana in partnership with Africa Centre for Energy Policy, the deal which is described by the Attorney-General, Gloria Akuffo as unconscionable has a weak understanding of the mining sector and government is misguided on the deal.
IMANI Ghana also indicates that, the government’s agreement to float the deal on the London stock exchange is a similar strategy used, where Ghana gave up its share in the then Ashanti Goldfield on the premise of attaining more value.
“In 1994, before the listing of the then Ashanti Goldfields, Ghana had a 55% stake in the entity worth $880 million as share of bullion. Today, it owns 0.01% (having given up even the standard 10% it owns in all local gold companies) worth a paltry $110 million in equity value. Actual earnings come just from royalties, a measly $22 million, whereas in 1996, dividends and royalties together amounted to $115 million.”
The deal which stated that Agypa Royalties had to be incorporated in the tax haven of Jersey, which has caused a furore, has been defined as incapable of being defended.
“By incorporating in Jersey, where the laws permit notoriously impenetrable trusts, it has become all too easy for the underwriters to underprice the vehicle.”
IMANI Ghana as well as Civil Society Organization (CSO) are advocating against the Agypa Royalties Deal which is being defined as ‘broad daylight robbery.’
Read more: https://imaniafrica.org/2020/09/28/imani-alert-the-10-most-alarming-problems-with-agyapa/
