MAC: Mines and Communities

Ghana to permit mining in forest zone

Published by MAC on 2008-07-01

Ghana: Newmont Gets Green Light to Mine in Forest

Public Agenda (Accra)

13th June 2008

Selorm Amevor

The Minister of Lands, Forestry and Mines, Ms. Esther Obeng Dapaah has given clear indications that Newmont Ghana Gold Limited (NGGL) will be given a permit to commence operations at the controversial Akyem Ajenua Bepo forest by the end of the year.

She broke the news in a statement issued on her behalf when the Birim North District had its version of this year's People's Assembly.

The Ghana News Agency quoted her as saying that the commencement of the project will not only pave way for land owners to get reasonable compensation for their crops but make it possible for the farmers to get annual grounds rent she had personally initiated.

Ms. Dapaah was optimistic that Newmont's operation will create job opportunities for the people and at the same time enhance the living standards of the communities.

However, the Executive Director of WACAM, Mr. Daniel Owusu Koranteng has slammed the new twist to Akyem Ajenua Bepo controversy, describing the government's change of mind " as very disappointing in the wake of a public forum scheduled for the 4th of July this year between the company and other stakeholders."

He said Ms. Dapaah's change of mind coming shortly after her widely publicized confession during the 12th United Nations Conference on Trade and Development (UNCTAD XII) that the nation had benefited minimally from mining smacked of double standards.

"With such a decision already taken it is worthless for the people to even continue with the public forum since the outcome will not have any effect on the decision by government to give the concession to Newmont," he added.

Mr. Owusu Koranteng was of the view that for the government to go ahead and give NGGL the concession inspite of the many concerns raised by the communities is another example of ignoring people's concerns in making public policy.

He indicated that the draft revised Environmental Impact statement document prepared by the company shows that the company has not completed all necessary procedures needed have the permit.

According to him, any decision by government to give the company the permit to operate would lead to the loss of heritage and archaeological resources, including some significant historic places.

In addition, the forest serves as water shed for many water bodies and the destruction would significantly affect the rivers in the region.

On the statement by the Minister that it was her own initiative that made that made the company to decide to pay ground rent, Mr. Owusu Koranteng said she was throwing dust into their eyes since it was not her role to negotiate on behalf of the farmers.

He said that the farmers have the right to negotiate with the company based on articles 72, 73 and 74 of the Minerals and Mining Act 703. The compensation principle of the Act includes compensation for land and other forms of compensation.

He urged the government to consider the petition of about 215 farmers who during the early part of this year petitioned the government not to give the company the license to operate in the forest.

Meanwhile the Sector Minister on Monday announced that government would invest $87million into the forestry sector within the next two years.

Ghana: Newmont Kenyasi Mining Area Under Threat From Residents

Public Agenda (Accra)

27th June 2008

Newmont Ghana Gold Limited (NGGL), managers of the Ahafo project at Kenyasi in Asutifi District in the Brong-Ahafo Region, has expressed worry about the rate at which residents put up structures and farm on its mining lease purposely to claim compensations.

Mr Randy Barnes, External Affairs Manager, told newsmen at Kenyasi on Wednesday that, the practice was impeding the operations of the company.

Leading newsmen to Amoma, an area within the concessions that the company intends to excavate, he said the situation was putting a strain on the company considering the high investments it has made in the area.

Mr Barnes said the company always declared a moratorium of its activities on the mine site and noted with regret that immediately after the declaration, people started raising structures with the hope of getting compensation.

"NGGL will and only compensate those who built before the declaration of the moratorium and who are found eligible for resettlement, relocation or compensation in accordance with the provisions of the 1992 Constitution and the new minerals and mining Act (2006) 703", he warned.

Mr Barnes said NGGL believed in dialogue to improve its relationship with communities within its operational areas.

He indicated that the company would conduct survey to record buildings, crops and land owners in the control area in collaboration with the land owners and lawful occupiers on the matter.

"After the declaration of moratorium at the Amoma area, perpetrators erected more than 400 illegal structures, a practice that not only frustrate the company but also the community, since the company will not compensate such people," he added.

Mr Barnes said in order not to create unnecessary confusion, NGGL had established a monitoring and control team to educate local communities on the company's concessions and cautioned that "no one should build a structure or upgrade crops in the control area without the approval of NGGL".

Ghana to cut mine firms' power subsidies


27th June 2008

Ghana will cut electricity subsidies for mining companies from July 1, as record oil prices threaten to eat into the country's budget and growth rate, finance minister Kwadwo Baah-Wiredu said on Thursday.

"Mining companies were paying about 11 cents (per kilowatt hour), that was too low," Baah-Wiredu told Reuters in an interview on the sidelines of a conference.

Ghana is Africa's second-biggest gold producer after South Africa, and has a bauxite mine operated by Rio Tinto.

"From 1st July they will be paying about 22 or 23 cents. They have agreed, they understand, we need to remove these imbalances."

Economists have cited utilities subsidies as a factor in a weakening cedi currency which has lost 12.5 percent of its value against the dollar in the past three months.

Ratings agency Fitch mentioned subsidies as a factor in Ghana's growing fiscal deficit when it downgraded its outlook for the country to "stable" from "positive" in February.

Ghana's government bought Alcoa's 10 percent stake in the inactive 200,000 tonne/year VALCO aluminium smelter last week and plans to relaunch the industry with a new bauxite mine and alumina refinery.

Baah-Wiredu said it would be possible to sell on a stake in the industry. "There are major investors from Brazil and Norway who are interested, they want to come in as quickly as possible."


Oil prices as high as $140 a barrel were far above the government's expectations and made it harder to meet the country's targets for growth around 7 percent and for a fiscal deficit of 4 percent of GDP, Baah-Wiredu said.

Government figures show Ghana had a fiscal deficit at 8.1 percent of GDP as of April 2008, though International Monetary Fund calculations were even higher. But Baah-Wiredu said the figures were lower excluding oil and one-off expenditures.

"If you discount the oil, the deficit is about 5 percent."

Baah-Wiredu said improvements in agriculture, construction and the services sector would help to alleviate the negative impact on the economy of high oil prices.

Oil reserves discovered in Ghana last year are due to start flowing in the first quarter of 2010. The state oil company doubled its output estimate for the project earlier this month to 120,000 barrels per day.

However, imports to help spur sectors like mining and infrastructure were contributing to Ghana's large current account deficit, which Baah-Wiredu said was running at 11 percent of GDP. "If you ask me 'What is your major problem?' I would say the current account deficit," he earlier told the conference.

Global price rises were also contributing to high inflation in Ghana, running at an annual rate of 16.9 percent in May.

The Bank of Ghana raised interest rates by 175 basis points to 16 percent last month to try to control inflation, and Baah-Wiredu said more hikes were likely. "Obviously the central bank will adjust interest rates," he said.

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