Increase royalties for mining communities – Chamber of Mines to gov’t

Increase royalties for mining communities – Chamber of Mines to gov’t

The Ghana Chamber of Mines has blamed the poor state of mining communities on the process by which mineral revenues accrued from mining activities are distributed and used, which leaves minimal percentage of royalties for the communities to use.

It is, thus, urging government to increase the communities’ share of royalties from 8.95 per cent to 30 per cent for their development, and for projects.

Mining communities, have for the longest time, been the least resplendent evidence of their mineral wealth. Describing the distressed state of communities in which mining companies operate as “nothing short of a disgrace,” the President, Nana Akufo-Addo, at the 2018 edition of the West African Power Conference and Exhibition, called for more to be done through ‘intelligent and sustainable’ collaborations between government and the mining companies.

However, according to its 2018 annual report, the Chamber said its members have been suffocating from several challenges stretching across non-fiscal, fiscal and advocacy issues, key among which is the mechanism for allocating and utilizing fiscal revenues realized from the extraction of mineral resources. This, it said, is a huge contributing factor for the worrying state of these communities.

The report said apart from the mandatory percentage of mineral royalties that goes back to the host mining communities, all other streams of fiscal revenue derived from the mining sector end up with the central government, whose need to finance other pressing infrastructural requirements does not allow it to revisit the mining communities.

“Even in the case of mineral royalty, only 13 per cent of the realized revenue is ploughed back to the communities where mining takes place. Out of this amount, 4.95 per cent accrues to the District Assembly while the Mining Community Development Scheme (MCDS) set up under the Minerals Development Fund (MDF) Act, 2016 (Act 912) receives 4 per cent. The remaining amount is ploughed back to traditional authorities in the host mining communities. In essence, the share of mineral royalty that is used to support development in mining communities is 8.95 per cent,” the report explained.

This, the Chamber argued, is woefully inadequate to meet the infrastructure deficits in these communities, thus, their call on government to consider an increase in the communities’ share of royalties from 8.95 per cent to 30 per cent and apportion same for specific projects.

Meanwhile, the Chamber also wants government to fast-track the plough-back of mineral royalty revenue to the community, which is usually hampered by delays, to sustain the value of the revenues to the community.

 

Source: Energy Ghana

 

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