The National Coalition on Mining, (NCOM) and the National Mine Workers Union are threatening to take a legal action against government should Parliament ratify an agreement before the House to allow a redevelopment of the Obuasi mine.
Government and Anglogold Ashanti in February this year, signed a regulatory and fiscal agreement that will provide the framework for the redevelopment of the mine.
In the agreement, Anglogold Ashanti is allowed to pay below the 5% royalties required by mining companies.
The company is also going to enjoy a cut in taxes, where it will pay 32.5% in corporate taxes as opposed to the flat rate of 35 %, as well as a US$177 million waiver on imported items.
Although the agreement is currently before parliament awaiting ratification, NCOM has described it as illegal, claiming the country will lose out on revenue.
Coordinator for the group, Dr. Yaw Graham told journalists in Accra that, they will intensify public awareness on why the agreement is not in the best interest of the nation.
He stated that “the mining laws, specifically ACT 703, does not allow the cutting of taxes for mining companies. The agreement is also weak on employment and training issues because there are no measuring targets in respect to employment. These are not renewable resources that should be for the benefit of the people in the future”
The group wants parliament to review and request for a renegotiation of the contract.
“We look forward to an opportunity to interact with parliament, we have submitted a memoranda and we await the committee’s decision, and based on that we will know the next line of action to ensure the best interest of the Ghanaian people is achieved”, Dr. Graham noted.
Operation at the Obuasi mine is expected to fully begin in the 3rd quarter of 2019, with the first phase producing up to 2,000 tonnes of gold per day.
Initial capital expenditure for the project minus production cost is estimated to be between US$450 and US$550 million.
The project is also expected to create up to 2,500 jobs.
Source: Citi Business News