Government to sanction violating mining companies – Amewu

Awaso (WR) – The government has announced plans to sanction multi-national mining companies that have been flouting the Lease and Sales and Purchasing Agreements they signed with government in order to avoid paying taxes.

The move has become necessary following discovery that most foreign mining firms had been consistently declaring losses annually but continued increasing their production capacity, thereby denying revenues due the government.

Mr John Peter Amewu, the Minister of Lands and Natural Resources, made this known when he led a delegation from the Ministry, Minerals Commission and Mineral Development Fund to the Ghana Bauxite Company (GBC) in Awaso in the Bibiani- Anhwiaso-Bekwai District of the Western Region on Wednesday, to acquaint himself with the Company’s operations and challenges.

The Minister said some mining firms were engaged in affiliate transactions with foreign firms to sell the country’s raw materials without government’s consent.

He cited the Ghana Bauxite Company, which had been selling bauxite to Siate Mineral Group, a sister company in China, without the involvement of government which had 20 per cent stake in the company and believed those transactions were undertaken at the blind side of the government to short-change the State in terms of the payment of taxes and revenues.

He warned that government’ would suspend defaulting companies’ mining lease licences and refuse granting them prospecting licences for new reserves.

Mr Amewu said government would not continue its marriage with such mining firms that had been declaring losses, noting that, those firms did not merit to continue operating in the country.

“Government cannot tolerate the tax shielding mechanism by companies that are not declaring profits and yet, they are planning to increase their production target to about 156 per cent.

We need to investigate motives behind those losses,” he added.

The Minister noted that those firms were short-changing the government and failing to pay the right prices of raw materials sold on the international market, saying; “this must stop”.

He said it was time mining companies built mining refineries in the country to process raw materials locally in order to add value to them.

He noted that there were sufficient bauxite deposits in the country, therefore mining firms must collaborate to construct refinery plant to process bauxite ore in Ghana.

Mr Amewu announced that government would not grant mining permit to the GBC to prospect for bauxite in Afumba and Bokakhirri, saying that it would advise itself accordingly when GBC’s mining lease expired in 2022.

He expressed displeasure over the continued deterioration of the arterial roads to the Takoradi Ports due to the haulage of bauxite for shipment.

The Minister said Government and the people of Ghana were not happy with the attitude of some multi-national firms exploiting the country’s natural resources without corresponding payment of revenues to the State.

Mr Jingkun K. Fang, the General Manager of the GBC, said the Bosai Mineral Group purchased the 80 percent shares owned by the Riotinto Alcan Group in 2010 because the latter was running at a loss, and also incurred $11 million loss in 2009.

He said since Bosai took over in 2010, it recorded losses for five consecutive years until 2015 when it made $4 million and the Company had paid all the outstanding penalties incurred for overloading its haulage trucks but failed to disclose the year and the amount paid.

Mr Emmanuel Mensah, the Mine Manager for GBC, said bauxite mining started in Ghana in 1940s and had undertaken corporate social responsibility including awarding scholarships to students in the company’s operational area, drilled boreholes, and toilet facilities, among others.

Currently, he said, the Company produced 4,000 metric tonnes of bauxite a day, 120,000 monthly and 1.4 million metric tonnes last year.

The company has been mining bauxite in Inchiniso and Kanayerebo since 1940s and wanted mining permit to mine at Subri that has 11 million tonnes of reserves.

Source: Ghana News Agency