The government has announced plans to introduce a new fiscal regime for the mining sector to ensure the country derives maximum benefit from the extraction of her mineral resources.
To that end, the government is seeking a paradigm shift in the thinking behind the utilisation of the country’s mineral resources, to ensure value addition to the raw minerals, instead of the current system of raw exports.
Addressing the chiefs and people of Essikado during the annual Kuntum Festival over the weekend, Vice President Dr Mahamudu Bawumia said the vision to add value to the country’s raw minerals had already began reflecting in the government’s approach to development, with the recent passage of a Master Project Facility Agreement by Parliament that sought to leverage a fraction of Ghana’s bauxite deposits in a barter arrangement for infrastructure development worth US$2 billion.
“We have not really benefited from the extraction of our natural resources, and it is for this reason that we need, especially in the area of our minerals, to bring a new paradigm, a new thinking, into how, as a country, we can benefit more from our mineral resources.
“There are many mines that are operating, and for years they tell us they have not made any profit so they cannot pay any dividend to government. But they keep mining and mining. How can you, as a business, continue to be in existence for so long and claim you are not making profit and so you cannot pay.
“There are some mines that are paying, but many are not paying sufficiently, relative to how much they are taking out of our country,” the Vice President observed.
Vice President Bawumia noted that a new fiscal regime similar to the one prevailing in the oil sector would soon be introduced in the mining sector so that the nation would derive her share of the minerals extracted from the country.
The Vice President said: “We have a regime that we are implementing for the oil sector, and we want to implement the same regime for the mining sector, so that when you take your gold out of the soil, if you take a 1,000 tonnes, you will have to pay us our share out of that. We will not wait for you to go and say you have not made any profit out of the 1,000 so you will not pay us anything. You will have to pay us something commensurate to what you have taken out.”
He gave the assurance that the government would welcome Foreign Direct Investment, but such investment should be a partnership, in order to ensure mutual benefit.
“We want foreign investment, there is no doubt about that. Our lawyers will say we have given them an invitation to treat. But that invitation to treat must not be an invitation to cheat. We want partnerships, and that is why we want a new regime in the mining sector, so that everyone will pay their share,” he added.
This new thinking, the Vice President said, was the guiding principle behind the decision to leverage a fraction of the country’s vast bauxite deposits to build an integrated bauxite and aluminium industry.
“We have decided that we are not going to allow what has happened to gold and manganese to happen with bauxite. Parliament just passed the Ghana Integrated Bauxite Authority Bill.
“We are forming this corporation, and will be forming partnerships with anybody who comes on-board, a joint venture, to build an integrated bauxite and aluminium industry.
“We don’t want the raw bauxite to be taken out of Ghana anymore. We will build a refinery here to refine the bauxite to alumina, take it to VALCO, and get aluminium, and you will see the massive increase in value,” the Vice President said.