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Newmont agrees to renegotiate thorny mining agreement with government of Ghana

NEWMONTNewmont Ghana has agreed in principle to renegotiate its mining Agreement with the government of Ghana, that’s according to Lands and Natural resources minister, Inusah Fuseini.

Government signed the mining agreement with Newmont in 2003, but parts of the deal have become thorny.

Under the Mining Act, government has the right to own up to 20 per cent shares in any mining company, but government waived this right in the 2003 agreement, thus the country has no equity stake in Newmont. Government also waived the payment of VAT for Newmont.

Civil Society groups such as WACAM and Third World Network have demanded that government renegotiate the Newmont agreement. They contend that the deal is bad for Ghana which denies the country the right to maximise benefits from agreement.

Last year, government set up a Mining Review Committee headed by Prof. Akilakpa Sawyer, to review some stability agreements with the mining companies.

The seven-member Committee was tasked to review and renegotiate stability agreements entered into by government with some mining companies.

It followed the resistance by mining companies which had stability agreements with government, to plans by the state to raise corporate mining tax to 35 percent from 25 percent and introduce a 10 percent windfall tax.

Newmont and Anglogold are two of the major mining companies in Ghana which have stability agreements with government.

The Akilakpa Sawyer Committee is yet to present its report to government. But Joy Business has learnt that Newmont has agreed “in principle” to a renegotiated its agreement with government.

“The team has engaged with Newmont and has built consensus on the areas that need rethinking”, Lands and Natural Resources Mininister, Inusah Fuseini told Joy Business.

“Government itself thinks that something must be done to the Stability Agreements and the company-Newmont also agrees in principle that it could engage with government to look at those things”, he added.

The Committee will also determine whether the Stability agreements conform to Ghana’s Mining Laws, and to see if those companies received preferential treatments over other agreements entered with other mining companies.
It will also review the Fiscal regimes and government’s Participating Interests in mining companies.

Source: Joy Business

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