By
Benjamin Mensah, GNA
Accra, June 22, GNA
– Parliament has approved a development agreement between the Government of
Ghana and Anglogold Ashanti (Ghana) Limited, for the mining company to make a
capital investment of US$ 880million into Obuasi mine, which has seen a lull in
its activities for some time now.
The agreement, whose
execution would end by December 31, 2023, would revitalise the defunct mining
company, breathe life into what a committee of the House called “almost
deserted ghost town community.”
It would generate
2,500 jobs over the next seven years, and an additional 1,500 people are
expected to be employed during the construction phase.
The execution of the
project would also support the implementation of local development initiatives,
enhanced security at the Obuasi community and knowledge transfer to the
indigenous people.
A report of the
Joint Committee on Mines and Energy and Finance, presented to the House
observed that “the only way for Anglogold Ashanti (Ghana) Limited to operate
profitably, given the current position of the Company, is to secure the State
approval for Redevelopment of the Mine as well as some Tax Concessions.”
Despite the lull in
the activities of the Mine, the joint committee’s report indicated that a
feasibility study undertaken revealed good prospects for the Obuasi mine… and
there was also potential to convert other minerals to proven and probable
reserves to increase profitability.
Under the agreement,
Anglogold Ashanti is expected to inject an estimated capital of $1,045 million
over the projected 22 years lifespan of the mine.
Anglogold would
donate two dollars per every ounce of gold that would be extracted to a
Community Trust Fund to support development initiatives in Obuasi, as part of
the Company’s Corporate Social Responsibilities.
The Company would
also put in social intervention programmes and health facilities.
At Thursday’s
sitting, the House approved a tax concession worth US$259 million to the mining
company.
However, Mr
Cassiel Ato Forson, the Ranking Member
of the Finance Committee questioned the decision of the Government of Ghana for
the $259 million tax concession.
He said the deal was
badly negotiated and Ghana would lose in excess of $300 million.
“The intention is that Anglogold is going to
invest $880 million to revamp the Obuasi mines. They are saying that the
project will not be viable until the government of Ghana decides to grant them
a tax concession worth $259 million dollars,” he told journalists.
He was of the view
that the concessions will actually exceed the stated $258 million, explaining
that “in agreement, they are reducing corporate income tax that is supposed to
be for mining companies which is 35 per cent.
“In the case of
Ashanti Gold, they are giving it to them at 32.5 per cent. So I ask myself, why
the discrimination. For a company with the strength of Anglogold, why are they
reducing their tax exemptions?”
GNA