Lands Minister decides not to revoke FGR lease; grants company 4 months to implement “turnaround strategy”

The Minister for Lands and Natural Resources, Samuel Jinapor, is said to have decided not to revoke the mining lease of Future Global Resources (FGR).

The Minister has rather granted the mining firms a “Conditional Approval’ of a further 120 days (four months) to allow the company to implement its proposed turnaround strategy for the Bogoso Prestea Gold Mine.

In a memo to employees on Wednesday, the General Manager of FGR, Kenneth Allen, noted management of the company will in the coming days communicate to all relevant stakeholders, the company’s road map to recovery.

Further stating that FGR will meet all of its salary obligations that are legitimately due by 30th May to employees.

“We are pleased to inform you that the long-awaited decision from the Minister for Lands and Natural Resources has finally been made and he has confirmed that the lease for FGR is not revoked but rather granted the Company a “Conditional Approval’ of a further 120 days to allow the company to implement its proposed turnaround strategy,” he noted.

“This has been a difficult and trying periods for all of us but we are confident that the worse is now behind us and within the shortest possible time we should get back onto our road to recovery. As part of the conditions the company is expected to meet all its salary obligations legitimately due by 30th May. In line with that directive the December and January salaries will be paid by the first week of May 2024,” he added.

The “Conditional Approval” by the Lands Minister follows calls by the Ghana Mine Workers Union for the termination of the mining lease of Future Global Resources Ltd.

This is because the company lacks the finances to invest and operate the Bogoso-Prestea gold mine it acquired more than three years ago.

“Since FGR took over the business in 2020 it hasn’t invested anything in the business and clearly it has brought the business to its knees. Since December mining activity has been at standstill after the state energy producer cut supply to the mine for nonpayment of bills,” said Abdul-Moomin Gbana, General Secretary of the Union.

According to him, the 15,000-member union is planning demonstrations on Thursday and Friday in the capital, Accra, to urge the government to withdraw the license of FGR.

The company owes millions of dollars to mainly local suppliers and vendors, and workers have virtually been out of work in the past four months.

The mine, which was producing 150,000 ounces of gold a year prior to acquisition, now struggles to turn out 60% of that.

Blue International Holdings formed FGR in 2020 as a wholly owned subsidiary to acquire high-quality long-term mining assets in sub-Saharan Africa, according to its website.

In October that year, it took over the Bogoso-Prestea mine located in the Ashanti Region of Africa’s biggest gold producer for about $95 million.

Future Global Resources Ltd. owns 90% of the mine and the government of Ghana holds 10%. FGR bought the mine from Toronto-based Golden Star Resources Ltd., which was later acquired in 2022 by China’s Chifeng Jilong Gold Mining Co.

Source: Norvanreports