Leadership and members of the Ghana Mineworkers’ Union (GMWU) have lauded the decision by AngloGold Ashanti to redevelop its Obuasi Mine.
AngloGold recently announced to the media that it was taking steps to revamp its Obuasi Mine following an accord over the Obuasi Investment Framework.
Leadership of Ghana Mineworkers’ Union, in a statement issued to BUSINESS GUIDE and signed by its General Secretary, Prince William Ankrah said “the Union takes cognisance of the notes to editors in the AGA piece which stipulate that AngloGold Ashanti has a 100% interest in Obuasi, which is located in the Ashanti Region of Ghana, 200 kilometres North West of Accra.”
According to the statement, the Union was equally excited with the earmarked mine production for the first 10 years which will be focused on the upper ore bodies and is expected to average 350,000oz to 450,000oz at an average head grade of 8.1g/t. In the second 10 years, production averages 400,000oz to 450,000oz.
The critical pointer, it indicated, was how the project sought to deliver internal rates of return of between 16% and 23% at real gold prices of between $1,100/oz and $1,240/oz, leveraging on gold price whose current outlook is very positive.
Indeed, according to the economist magazine, The World, in 2018, gold price is predicted to hover around 1,300 plus as currently seen from the trend year to date, the statement added.
“With this positive price outlook, coupled with the levels of productivity, it raises the need to begin a conversation on mining windfall tax among other things which has the possibility of adding to our national purse and for that matter cure some of the revenue needs meant to reposition and grow our ailing economy,” it said.
Furthermore, it noted that “it is also worth mentioning that the World Bank had persistently emphasized the fact that a well managed extractive industry’s fiscal regime has a major role in building a robust economy.”
Undoubtedly, this confirms the incumbent president’s strong appetite for a Ghana Beyond Aid, according to the mine workers in the statement.
Tax Measures
It urged that the Government of Ghana and all other critical stakeholders to take keen interest in the whole process and contribute to AngloGold Ashanti’s request currently before Parliament.
That, it said, was because some multinationals have over the years reneged on their tax obligations to the state.
Governments over the years have put in measures, including introducing fiscal incentives (tax cut, reduction in royalties) to attract and sustain foreign direct investment (FDI), particularly in the mining sector, it explained.
“These good intentions have culminated in the signing of Development and Stability Agreements between the Government of Ghana and mining companies who have demonstrated their resolve to re-capitalize and expand their investments.”
“The Ghana Mineworkers Union is aware that AngloGold Ashanti is seeking a Development and Tax Agreement with the Government of Ghana as part of its revamping efforts, which is currently under consideration and ratification by Parliament.”
However, considering the experiences gathered from existing Development and Tax agreements entered into by Government of Ghana with some mining companies including Gold Fields Ghana Limited (GFGL), it is quite evident that some have either failed or reneged on their obligations to these agreements, the statement pointed out.
“A typical case in point is the failure by Gold fields to honour a fundamental obligation in the Development Agreement which emphasize the need for “an increase of at least 10 percent (10%) in the number of permanent employees, who are citizens of Ghana employed by GFGL at the mine, which is the subject of GFGL Mining leases when compared to 31 December of the year prior to the year in which GFGL began construction or other activity required to complete the Development described in the Extension Plan and financed by the additional investment,” it said.
By Melvin Tarlue