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Tight fiscal regime strangles mining sector— Chamber of Mines

  • SOURCE: | Editor
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    The Chief Executive Officer of the Ghana Chamber of Mines, Mr Suleman Koney, has raised concerns over the declining nature of exploration activities in the country’s mining sector, explaining that the trend, if not checked, could translate into a decline in annual gold output.

    He said exploration activities which covers both the company’s presence and their activities have gone down substantially.

    He explained that for the country to sustain the mining industry and the annual earnings from minerals, there was the need for the execution of pipeline of projects that would stretch from exploration to production in cases where the exploration is declared positive.

    “If your attractiveness towards foreign direct investment into exploration is going down then naturally the future and the sustainability of your industry will be bleak,” he said at an interaction with members of the Journalists for Business Advocacy (JBA) in Accra.

    He also chastised the fiscal regime in the mining sector for contributing to the declining exploration activities in the country, saying that most minning sector investors are often inundated with taxes.

    This, he explained scares them from chsoing Ghana into neigbouring countries.

    “Government itself is unwilling to invest in exploration because it so risky. Why don’t you ensure that there is no taxation at all on exploration to attract investors to come and help you unearth your mineral potential? Once they start production then it makes sense you start taxing them,” he said.

    As a result, Mr Koney said Ghana should put in place structures that would ensure that existing or prospective mining companies continue to undertake explorations to compliment earnings from existing mines.

    National revenue

    In 2014, the mining sector contributed about GH¢1.24 billion to national revenue, representing 16.2 per cent of the year’s total direct taxes.

    The sector accounted for 34 per cent of the country’s gross export revenue in that year, reinforcing its position as a leading source for forex and a major contributor to the country’s balance of payments.

    Additionally, producing members of the Chamber returned US$2.8 billion, representing 77.5 per cent of their mineral revenue (US$3.79 billion) through the Bank of Ghana and the Commercial Banks in 2014.

    Records from the Minerals Commission show that foreign direct investments into the sector in 2014 amounted to US$950 million.
    Cumulatively, the investment inflow into the sector from 2000 to 2014 rose above US$ 8 billion.

    Employment creation

    As of 2014, data from the Chamber of Mines showed tha the sector employed about 12,148 people directly, of which 234 people, representing 1.8 per cent, were expatriates. — GB

    – Source : http://graphic.com.gh/business/business-news/46945-tight-fiscal-regime-strangles-mining-sector-chamber-of-mines.html#sthash.tK4p7Mld.dpuf

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