Ghana’s Minerals and Mining Act, 2006 (Act 703) and draft amendment align with the regional mining frameworks under six thematic areas but still lags in focus and scope of alignment, the Africa Centre for Energy Policy (ACEP) finds.
The country’s mining sector faces a host of perennial problems, some of which have been addressed by prior draft amendments. Nonetheless, the challenges that continue to persist include revenue mobilization shortfalls, damaging environmental effects, and destruction of the livelihoods of inhabitants in host communities, especially from illegal mining activities.
Meanwhile, Ghana subscribes to a host of mining governance frameworks both regionally and sub-regionally. Specifically, the draft amendment converges with these frameworks in terms of legal and institutional framework; geological and Mineral information systems; fiscal design; localization, Local Community Development and Export of Mineral Resources; Artisanal and Small-Scale Mining (ASM) operations; Environmental and Social Issues.
Gaps in mining laws and ACEP recommendations
These notwithstanding, the Minerals and Mining Act, 2006 (Act 703), the draft amendment, and the Income Tax Act, 2015 (Act 896) do not address weaknesses in mobilizing the right share of revenues from resource exploitation. Notably, these laws are all silent on additional profit tax on mining operations. They do not also consider different royalties for different mineral types and have no provisions on competitive auctioning of mineral rights.
To address this, ACEP recommends that areas with regional geological, geochemical or geophysical data on concessions being applied for, should be subject to competitive tendering processes as per guidelines of the Mineral Commission.
Another gap is the presence of sub-optimal contract negotiating capacities, wherein in this case, contract negotiation involves only State Institutions. ACEP, therefore, advocates for the creation of a National Advisory Council or Committee on Mineral Resources devoid of politics which would advise on matters pertaining to the development of the mineral sector. Also, it recommends that membership in the council should be apolitical.
Furthermore, there are no express provisions requiring mineral rights holders to consult and negotiate on issues or decisions affecting host communities. Therefore, ACEP recommends an additional clause to section 13 of the amendment so holders of mineral rights can consult and negotiate on decisions and actions affecting host communities. This will promote social legitimacy and reduce social conflicts in mineral operations.
In addition, the disclosure of beneficial ownership information is largely non-existent even though regional frameworks recommend strengthening transparency and access to information at all levels. Accordingly, the draft amendment must, therefore, emphasize the disclosure of beneficial ownership information through the creation of a subsection under Section 20, which provides for public disclosure of all contracts and permits, ACEP suggests.
Other recommendations for Government’s consideration
Preferably, this will help to reduce the risk of corruption, illicit financial flows, and other rent-seeking behaviour that deny the country of its due. It also helps to deal with conflict of interest situations emanating from politically exposed persons.
Additionally, there are no provisions in the laws that promote value addition as additional consideration for granting mineral rights. Specifically, Government must pursue policies at the onset of any mineral operation to promote the establishment of facilities needed to ensure optimized value addition to minerals in-country as a first option.
Another challenge that requires attention is the absence of a concrete legal definition that distinguishes artisanal mining from small-scale mining. This has resulted in a situation where artisanal miners operate outside the confines of the law. Also, the tenure of artisanal mining licenses and processes for acquiring them are not spelt out in the existing laws.
From the foregoing, ACEP recommends a redrafting of Section 82 to 89 of the law to clearly distinguish between artisanal and small-scale mining. This is based on factors such as certification and operating land size.
Following this, training must be a condition precedent for acquiring artisanal and small-scale mining rights to build the capacity and competence of holders, ACEP suggests.
Having already undergone series of amendments, the government has proposed a third. Therefore, a new amendment adequately blocks all the loopholes while ensuring full alignment with regional frameworks.
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