Dr. Toni Aubynn, Chief Executive Officer of Ghana Chamber of Mines, has said some mining companies were proceeding with their production in spite of the uncertainties and the business risks associated with the industry.
Government in the 2012 Budget announced an increase in corporate tax on mining companies to 35 per cent from 25 per cent and a 10 per cent windfall tax on mining profits to be introduced.
The Government recently set up a team to review and re-negotiate stability agreements it had entered into with some mining companies to ensure that the country derived maximum benefits from its resources
“Most companies are willing to expand their operations which will invariably bring value to the mining industry. This would bring value to the country,” Dr Aubynn said during a presentation to a German Business Delegation to Ghana.
He said while a couple of companies in the mining industry were in distress in spite of the relatively high gold price, most companies had been able to play down the global down turn very well and the Chamber expected this to continue.
Dr Aubynn said the emphasis on fiscal receipts directly from the industry did not reflect on the total benefits of mining to the economy.
The country, he said, should adopt a policy to identify and develop all downstream and upstream activities linked to the mining industry for which the country had a competitive advantage to create value multipliers.
Dr Aubynn said based on data gathered by Supply Managers, it could well be possible to increase mining sector spending on Ghanaian manufactured products in the long term by 66 per cent from around 120 million dollars per annum to 200 million dollars.
“The multiplier effect of this growth on the Ghana economy would be many times the current increase in direct expenditure,” he said.
In this direction, he said, a Memorandum of Understanding had been signed between the Chamber, Minerals Commission and IFC to define the roles and responsibilities of each of the parties in the development of a National Local Content Programme.
He said the mining sector would continue to play its lead role as a major export earner and contributor to the country’s balance of payment, accounting for nearly half of the country’s gross export revenue.
Dr Aubynn said contrary to public perceptions most mines continue to return well in excess of the statutory 25 per cent of foreign exchange earnings.
"For example in 2010, the industry returned about 2.2 billion dollars representing 68 per cent of their mineral revenue through the BOG and the Commercial Banks,"he said.
Despite the achievements, Dr Aubynn said the mining industry needed to deal with the challenges of illegal mining and use of cyanide and mercury by the illegal operators as well as public’s perception about the industry vis-a vis the price of Gold.
There is also the high cost of haulage due to poor rail network, arbitrary review of companies contracts (Stability and Development Agreements) and high energy and power cost.
Source: GNA
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