The Institute of Economic Affairs (IEA) has expressed dismay about the sale of Newmont’s Akyem Gold Mine Project in Ghana to China’s Zijin Mining Group for $1.0 billion
The IEA described the deal as flawed in several respects, inimical to Ghana’s interest and unacceptable.
According to the institute, Ghana needed a complete paradigm shift in its mineral contracts by taking ownership of the minerals to create job opportunities, wealth, and technical capacity development for Ghanaians.
The IEA in a statement issued on Monday said that, “The IEA notes that the project lease was signed between the Ghana Government and Newmont on 19th January 2010 and has an expiry period of 15 years that is valid until 19th January 2025. According to the terms, the lease is transferable within the duration period, subject to mutual agreement between the Government and Newmont.”
“The lease is also subject to extension after its expiry date by mutual agreement. The lease has not yet expired and therefore, any decision by Newmont to sell the mine must be on a transfer basis and must be for the unexpired term only and subject to Government agreement”, the statement disclosed.
“At the end of the expiry period, Newmont is obliged to hand over the mine back to Government, the truthful owner of the gold under the assigned land. Any company that wants to operate the mine after the expiry date of the lease must sign a new agreement with Government,” it added.
The IEA in the statement pointed out that Newmont and the government have not reached any agreement for the mine to be transferred to Zijin for the unexpired term of the lease, which is up to January 19, 2025.
Moreover, it said it was unaware that Newmont has evoked the extension clause and that the government has agreed to such an extension, adding, “The IEA wishes to point out that apart from Newmont, no other company has an original locus or right in the extension of the Lease.”
“The IEA has learned that some Ghanaian entities also bid for the mine, but were allegedly outbid by Zijin. Allowing a foreign company to take over the mine would, however, be contrary to the President’s own position as he stated in his State of the Nation Address (SONA) in February this year: “We will engage with Newmont to give priority to Ghanaian investors who will want to acquire this mine to ensure that our mineral resources better benefit the Ghanaian people,” it noted.
The statement further stated that even Canada, where Zijin was also seeking to invest in the domestic critical minerals sector, and planning initially to buy a 15 per cent stake in Canadian copper company, Solaris Resources had decided to limit Zijin’s stake in the interest of Canadian national security.
The IEA also emphasised that Ghana’s natural resources represent the low-hanging fruits for the acceleration of the country’s development and eradication of its endemic poverty.
Therefore, to achieve these goals, Ghana should maximise the benefits from these natural resources and this can only be done by jettisoning colonial-type mineral contracts skewed in favour of foreign companies.
The IEA proposed two fundamental proposals to help introduce sanity into the governance of Ghana’s natural resources and to reduce corruption.
“The first is to amend Article 257(6) of the Constitution that vests Ghana’s natural resources in the President on behalf of, and in trust for the people, which seems to give him a carte blanche to sign the resources away at will.”
“The second is to introduce in the Constitution or the Minerals and Mining Act, 2006 (Act 703) a provision that prohibits the government from signing contracts above a specified monetary value six months to the end of their four-year term. This will prevent incumbent administrations from signing eleventh-hour contracts in favour of their families, friends or cohorts, or for personal gain.”
BY TIMES REPORTER
