Comprehensive  Ghana Oil and Gas news, information, updates, analysis


News in Brief

Small scale mining: a menace to society or a key to national development

galamsey 2Ghana is known globally for several things one of which is its mineral rich land. As Africa’s second largest producer of gold, it may be worth giving enough attention to all mining contributors irrespective of their size so as to optimise output. Small scale miners may not individually contribute much to the economy, however collectively, their contribution forms a significant portion of mineral output. For example the Minerals Commission reported a 34% gold output from artisanal and small scale miners (including unlicenced miners) in 2013.

In terms of employment, there are about 1,ooo,ooo persons engaged in small scale mining with an uncountable number of people depending directly or indirectly on small scale mining as a source of livelihood. Small scale miners are one of the main suppliers of gold to known marketing companies such as Precious Minerals Marketing Company and ASAP VASA.

The operations of illegal small scale or artisanal miners (popularly known as galamsey) has been on the rise in the country and it is now almost impossible to distinguish the output of legal small scale miners from that of illegal operators. Although incorrect, the average Ghanaian may regard all small scale miners as illegal operators and call for a total riddance of the subsector. There is however a legal means to engage in small scale mining.

The Minerals and Mining Act, 2006 (Act 703) and associated regulations (‘‘the mining laws’’) have provisions dealing exclusively with small scale mining but galamsey operators do not usually consider these provisions before commencing their operations. Could this be mere ignorance of the mining laws or a blatant refusal to comply?

To those that the former applies, I have provided snapshots of the mining law provisions. A small scale mining licence is given:

  • to a citizen of Ghana aged at least 18 years; and
  • to a registered member of the District Office of the Minerals Commission.

The licence is granted for an initial period of not more than five years (renewable) and once granted, it is not transferable to a non-citizen. (Obviously, the mining laws reserve small scale mining for citizens of Ghana only and foreign nationals who engage in small scale mining are in breach of the laws.)

Further, each mining area is required to have a committee consisting of the District Chief Executive and other nominated members of the community as well as a representative from the Environmental Protection Agency and the Minerals Commission. The role of the Committee is to “effectively monitor, promote and develop mining operations in the area’’ – the representation of the Committee suggests that the monitoring role can be carried out without any qualms.

Aside the aforementioned, the mining laws require the use of an effective and efficient method for mining, adhering to good practices, health, safety and environmental compliance. What an effective or efficient method is, can however be open to interpretations unless clear guidance is given. Quantities of chemicals such as mercury for mining also requires the written permission of the Minerals Commission.

I believe the question on your mind is: are these rules being adhered to? And if not what can be done to improve compliance? These questions are addressed subsequently but before that let’s look at the impact of illegal mining.

The failure of some small scale mining operators to obtain the necessary permits renders the Minerals Commission incapable of carrying out its monitoring role and hence unsafe mining operations may not be uncovered in time for appropriate action to be taken.

The impact of galamsey operations on the environment includes deforestation, destruction of water bodies, land degradation and other health hazards. In some cases, these illegal miners encroach on concessions of the large scale miners after their scheduled blasting, disrupting the flow of their operations. Illegal small scale miners also do not pay taxes to the economy in spite of their potential contribution.

Thinking aloud: will it not be worth considering a separate tax regime with features similar to the Vehicle Income Tax and Tax Stamp that is operational for commercial drivers, hair dressers and other petty traders for small scale miners? Better yet if as a nation, we are able to find a way to regulate galamsey miners, then it will become easy to identify and tax them. Broadcasted

A simplified regulatory regime that is well publicised (especially in the mining communities) will assist to make regulation and compliance easy. Such a regime should be comprehensive enough to cover the regulatory aspects of the subsector and passed into law with a household name such as the ‘‘Galamsey Law’’ – my suggestion for making it popular. The Galamsey Law can cover aspects of compliance such as:

  • a clear definition of small scale mining concerning the fractions of an area that can be the subject of a licence.
  • Special tax rates/amounts – this could be a fixed amount per month/quarter/year.
  • Specific environmental guidelines/rules.
  • Resources such as where to find technical assistance.
  • simplified forms for applying for the licence also taking the above into account.
  • Strengthen the community committee to act as monitoring agents. Members of the committee should include opinion leaders who will assist these miners to comply with the law.

Such a regime will offer a number of Ghanaians the chance to operate legal small scale mining and instil some sense of inclusiveness in them. Regularising small scale mining through simplified means will also encourage the miners to comply and enable them to contribute their quota to national development. With such a system in place, the galamsey miners do not need to look over their shoulders while they mine – they will rather invest in the mine operations and not into security.

Small scale miners/ artisanal miners are also encouraged to form an association similar to the Chamber of Mines which is represented by the large scale miners. This will make it easier for the members to be sensitised on environmental requirements and make a call for Government policy to cover small scale mining. This will go a long way to redeem the tarnished image of small scale mining and galamsey and raise tax revenue for Ghana.

Want to know more? Let’s talk. You can contact me by sending an email to george.kwatia@gh.pwc.com and copy in Mary Kwarteng (mary.kwarteng@gh.pwc.com).

About PwC

PwC firms help organisations and individuals create the value they’re looking for. We’re a network of firms in 157 countries with close to 195,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/gh

Business School – September 2015 session (Breakfast forum):

Topic(s): Expatriate Mobility – playing a vital role in national development

Venue: Movenpick Ambassador Hotel, Accra

Date(s): 8 September 2015

Source: http://thebftonline.com/features/opinions/15149/Small-scale-mining-a-menace-to-society-or-a-key-to-national-development.html#sthash.Jc8zvT4X.dpuf

Profile photo of Editor
Follow Us

Editor

Reporting Oil and Gas project was launched on 4th June 2009atTakoradi, Western Region, Ghana by Penplusbytes (PPB – www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector
Profile photo of Editor
Follow Us

Share this article

Leave a reply

Personality of the Month
  • Prof. Thomas Mba Akabzaa Chief Director of Ministry of Petroleum          …
Follow Us Online
Join the Discussions

Summary: Revenue mobilization from the oil sector for Agricultural production in Ghana, a myth or reality?

Agriculture, once considered the backbone of Ghana’s economy recorded a reduction of its contribution to GDP from 45% in 1992…

Responses Add your response


About Us
Reporting Oil and Gas project was launched on 4th June 2009 at Takoradi, Western Region, Ghana by Penplusbytes (www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector read more
Events Calendar
<< Aug 2017 >>
MTWTFSS
31 1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31 1 2 3
Twitter Activity Stream
 

Partners We are proud to be associated with:

Skip to toolbar