Ghana’s mining sector is set to undergo a major change in its regulatory framework as the Minerals Commission has initiated and proposed some key changes to the current Minerals and Mining Act, 2006 (Act 703).
The Commission has proposed amendments to the current Act, which has been in operation for 13 years, key of which is an amendment to government’s participation in mining lease.
During a technical session organized by the Natural Resource Governance Institute (NRGI) which focused on the proposed amendments to the Minerals and Mining Act, 2006 (Act 703), Technical Advisor to Chief Executive Officer of the Minerals Commission, Mr. Hassan Al Hassan said, the commission is proposing a revision to government’s pre-exemptive right under the section 43 of the Act, which refers to its free-carried interest.
Mr. Al Hassan said that, the Section, in its current form makes government to receive low or no dividends at all from mining activities, due the failure of mining companies to declare dividends.
“The proposed revision of section 43 will ensure that government is entitled to receive an annual guaranteed payment from mining operations in the country for the free carried interest during a year that the mining companies decide not to declare dividend,” he stated.
According to the Commission, it is anticipated that when the proposed amendments are effected, it would modernize Ghana’s minerals and mining act to be able to meet the challenges of the current trends and environmental issues and position the country’s mining sector to underpin the sustainable economic growth of the country, through linkages with other sectors of the economy.
The Minerals Commission proposing a review of the stability period from 15 years to five years. The rationale for this review is that the country viewed as a safe place to make mining investment.
Section 48 (1) of the Act states that The Minister may as a part of a mining lease enter into a stability agreement with the holder of the mining lease, to ensure that the holder of the mining lease will not, for a period not exceeding fifteen years from the date of the agreement.
It is also expected that the amendment will require a compulsory beneficiation allocation of certain percentages of quota of the mineral earnings. This will ensure the development of the local infrastructure, technology transfer, among others.
It is also expected to ensure greater local participation in the mining value chain.
The Minerals Commission is also proposing efforts to achieve a diversification of the minerals base of the country, since this has become a critical need for the economy. A key initiative in this regard is for the mineral base to be categorized to reflect the desired strategic direction of the sector.
Mr. Al Hassan said, “so, we intend to categorize the mineral base in our diversification process as strategic and non-strategic.”
In October 2018, The Minerals Commission extended invitation to various stakeholders including the Natural Resource Governance Institute (NRGI) to submit comments and suggestions towards the proposed review and amendment of the Ghana’s Minerals and Mining Act, 2006 (Act 703).