Operationalize Mining Development Fund – Mineworkers Union
The Ghana Mineworkers’ Union has commended government for providing the legislative framework for the sector, but called for its operationalization to address the poor infrastructural development in mining communities.
Ghana has enacted the Mineral Development Fund Act 2016 (Act 912) and set up of the Mineral Development Fund Secretariat, a substantial step towards responding to the deteriorating infrastructure and the glaring infrastructural deficit in mining communities, the Union said.
This was in a statement signed by Mr Abdul-Moomin Gbana, Secretary General of the Union, and copied to the Ghana News Agency in Accra, as part of the Union’s week celebration slated from Monday June 21 to 25 l, 2021.
“We believe that the sliding nature of the mineral royalties’ calculator selectively applied to some mining companies, under the guise of Stability and Development Agreements entered with the government is a regressive fiscal policy decision as far as revenue from mineral royalties is concerned,” he said.
This, he explained, is because the current sliding scale was only a function of gold price and not gold production and that to ensure the full realization of mineral royalties for its intended use under the Mineral Development Fund, it was important to reconsider the use of the sliding scale and apply a flat rate.
He said the Union believed that the current 20 percent share of annual mineral royalties allocated to the Mineral Development Fund was woefully inadequate and ought to be increased to at least 50 percent if the country was committed to seeing the transformation of mining communities as was envisaged in the Mineral Development Fund Act.
“Taking the year 2020 as an example, producing mining companies paid a total of about GHs 4.5 billion direct taxes and about GHs1.4 billion in mineral royalties to the GRA giving a total direct mineral revenue of about GHs5.6 billion”.
“Pursuant to Section 3 (a) of the Mineral Development Fund 2016 (Act 912), only 20 percent (GHs 278 million) of the above mineral royalties went to the MDF,” he said.
“The Fund also gave 20 percent (GHs 56 million) of its share of the royalties to the Mining Community Development Scheme set up under it for mining community development, while the rest of the Fund share of royalty funds went to the Office of the Administrator of Stool Lands (50 percent), Minerals Commission (13 percent), Geological Survey Authority (8 percent), Research (5 percent) and Ministry of Lands and Natural Resources (4 percent)”.
He said “in the nutshell, government made only 1 percent of the huge mineral revenue in 2020 available under its current arrangement for the development of the entire mining communities which was certainly unacceptable.”
The Union advocated a Mining Sector Infrastructure Fund under the Mineral Development Fund when its share of annual mineral royalties was increased to 50 percent as proposed, adding the Mining Sector Infrastructure Fund of 30 percent of annual mineral royalties should focus on addressing the infrastructure gaps of these mining communities on a more sustainable basis.
“We are therefore calling on the Parliamentary Select Committee on Mines and Energy to pay particular attention to the activities and accountabilities of the Mineral Development Fund in order to ensure that mining communities benefit fully from the Fund,” he said.
He called on government to fix the poor road infrastructure in mining communities immediately.
A tour of mining communities in this country reveal one similar and chilling characteristic – wretched and unplanned infrastructure if there ever existed any, huge infrastructural gap, lack of access to potable drinking water, polluted waterbodies and environmental degradation.
He said the resources that continued to fly out of these communities were finite and would be depleted someday, hence needed action to resolve that challenges.
“These mineral revenues were generated from no other place in Ghana but typical mining communities such as Tarkwa, Akyempim, Ayanfuri, Damang, Akyem, Ahafo, Manso Nkran, and Obuasi.
“Despite these revenues from these mining communities and Ghana’s current place as the largest producer of gold in Africa, Ghana continued to experience disappointing results in translating these mineral wealth into broad economic development for the benefit of its citizenry especially mining communities, which were host to these deposits,” he said.