The President of the Ghana Chamber of Mines, Eric Asubonteng, has called for an incentive package for mining companies to encourage exploration and sustain minerals production in the country.
Exploration is the single most critical activity that guarantees continuous production of minerals and discovery of new mineral resources to supplement production from existing mines or replace output of mines whose economic ore body is exhausted.
Speaking at the 93rd Annual General Meeting of the Ghana Chamber of Mines, which was held virtually, Mr. Asubonteng said: “It is, therefore, crucial to put in place an incentive scheme that will reduce the cost associated with exploration and attract the required critical investments into this high-risk business of mineral exploration.”
He explained that minerals exploration investment in Ghana has declined significantly in recent years, describing it as alarming for a country to which mining is critical for foreign exchange and fiscal revenue generation.
“We urge the government to exempt exploration companies from payment of VAT on big-ticket cost items such as drilling and laboratory services,” he said. “Effectively, the extent of actual exploration activity is diminished by upfront costs such as VAT on inputs and landholding costs. Thus, relieving the usually illiquid exploration companies from the payment of VAT as well as reducing the cost of landholding would not only improve their cash flow and reduce their operational costs but also enhance Ghana’s image as a competitive destination for exploration investment.”
According to him, in the long run, this will guarantee continuous mineral production and flow of fiscal and foreign exchange receipts as well as other benefits from the minerals sector.
He also urged the government to increase the host communities’ share of mineral royalties to 30 percent and earmark this for specific sustainable infrastructure projects in those communities
The CEO of the chamber, Sulemanu Koney, stated that the chamber is hoping to organise the next edition of the Mining and Energy Summit next year.
“It is our expectation that with the ongoing vaccination, the chamber would be able to organise the next edition of the Ghana Mining and Energy Summit, a flagship event for the mining and energy sectors, in 2022. Such interactive platforms are key to educating the populace on developments in the mining sector and related national issues.”
The Minister for Lands and Natural Resources, Samuel Abu Jinapor, touched on the need to support local entrepreneurs and build local capacities to capture the commanding heights of the mining industry.
He added that government is committed to developing a robust mining sector and regards it as key in the accelerated development of the country.
The total volume of gold produced in Ghana declined by about 554,000 ounces (12.1 percent) to 4.023m ounces in 2020 despite the windfall in gold prices, the chamber’s 2020 annual report showed.
The report said in 2021, the chamber expects most of its gold producing member companies to recover from the drags that characterised their operations in 2020.
Overall, the gold output of producing member companies of the chamber for 2021 is forecast to range between 3m to 3.3m ounces. The industry also expects production of manganese by Ghana Manganese Company to increase with a sustained full year of production in 2021.