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ANGLOGOLD Cooperation Agreement Bad Deal -Pressure Group

botchway May 10, 2018

By Frederick E. Aggrey

The convener of the Ghana National Coalition on Mining (NCOM), Dr. Yaw Graham, has described the Development and Tax Concession Agreement between the Government of Ghana and AngloGold Ashanti (Ghana) Limited, which is before the Parliament of Ghana for ratification, as a bad deal, which must be abrogated outright.

Dr Graham asserted that under the Constitution, minerals are for the people and is held in trust by the government, as a result of which all related agreements and policy directions must inure to the benefit of the people.

This, he noted, places a responsibility on them, as major stakeholder industry players, to defend the constitutional provisions and the interests of the people.

He revealed further that the concessions and tax rebates offered Anglogold Ashanti under the agreement, leaves Ghana with nothing at the end of the day.

He explained that the law, under Section 48 of the Minerals and Mining Act, 2006 (Act 703), gives the government legal authority to optionally offer fiscal concessions to a holder of a mining lease.

He said further that under that legal framework, the only fiscal concessions that could be offered by the government is to freeze (stabilise) current fiscal obligations and did not give it the power to waive or reduce fiscal obligations to the Minister.

Speaking at a press conference at the Conference Room of the Trades Union Congress (TUC) in Accra yesterday on their recommendations to the Parliamentary Joint Committee on Mines, Energy and Finance on the aforementioned Agreement, Dr. Graham asserted that “the two agreements, in their present forms, should be rejected and the executive invited to take steps to revise them,” adding that “the Agreement is a bad deal, and should be scrapped, that is why we are here to tell the whole world.”

He also indicated that Parliament, on its own motion, also does not have the power to waive or vary taxes, adding that it can only do so by approving the exercise of a power to waive or vary taxes by a person or authority vested with the power to do so.

He further stated that, under the agreement, the government offered a conservative estimate of US$275 million in revenue as tax waivers to AngloGold, hence Ghana is only earning US$30 million throughout the10-year period of the Agreement.

Government estimates to receive US$304m as revenue during the first ten years of the redeveloped mine. This makes the US$275m a huge give away that leaves the government with less than US$30 million as revenue over the ten-year period.

He lamented that AngloGold has mined 32 million and more ounces of gold in Ghana since its operations, amounting to US$39 billion and more at current world gold prices, but the country has got nothing out of it as all have been siphoned outside.

He added that royalties to be paid by the company have been pegged at between 3% and 5% on a sliding scale. Concessionary rate of corporate tax for the company also has been reduced to 32% from the normal 35%, and according to Dr. Graham, a phenomenon that deprives Ghana of revenue.

He said that Obuasi currently has gold deposits of over 33 million ounces, making it a very viable and profitable venture, which does not need any fiscal concession to survive. He called on the Parliamentary Joint Committee to reject the agreement in the interest of Ghana.

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