Ghana plans to set up a minerals development fund to boost infrastructure development for local communities, amid complaints from civil society groups that many mining areas suffer an acute lack of of infrastructure due to underfunding.
A law to establish the fund is now before the country’s parliament for approval, and once in place the fund will see the establishment of a mining community development scheme.
The proposed law sets out guidelines for rolling out corporate social responsibility projects, set health and safety standards, tackle environmental issues and resolve issues relating to blasting activities by mining companies.
The scheme would be funded by proceeds from royalty payments and development funds paid by mining companies and other sources.
Ghana boasts of a wide range of natural resources including timber, cocoa, rubber, bauxite, manganese, iron ore, clinker, limestone, oil and gas, among others, with gold, which has been mined in Ghana for the past 200 years, being the largest resource.
But civil society groups such as the Third World Network and the Wassa Association of Communities Affected by Mining (WACAM) believe Ghana has not benefited from the mining activities.
Lands and Natural Resources Minister Mike Allen Hammah told a forum to discuss the fund in Accra on Monday that government was putting in place regulations, including provisions for implementation of local content, which had been drafted to make full use of the Minerals and Mining Act.
The regulations also before Parliament include provisions on localisation and local content to spur development.
Hammah said apart from the regulations ensuring that companies employed a reasonable level of locals in the operational areas it would also make mining operations transparent.
Infrastructure such as roads and railway lines to help the industry to contribute adequately to the country’s development will also be boosted. “The benefits of mining should far outweigh its detrimental impact on the environment as companies seek to adopt more responsible mining practice,” Hammah said.
Ghana’s Chamber of Mines organised the forum to find solutions to mining related challenges. It has also introduced a quarterly mining for development forum to discuss and strategise on how mining could serve as a catalyst for development.
The country’s mining industry accounts for 70 percent of the country’s Gross Domestic Product. Minerals make up 37 percent of total exports, of which gold contributes over 90 percent to this figure.
Ghana is Africa’s second largest gold producer after South Africa, producing more than 80 tonnes annually. It is also a major producer of bauxite, manganese and diamonds.
Many multinationals companies in Ghana have acquired licenses for further exploration offshore and onshore oil deposits after it was discovered in 2007.
In 2010, about 2 million ounces of gold was mined in Ghana. Gold at the time was going for about US$1,300 per ounce. That translates to a whopping US$2.6 billion.
But the government received a mere five percent of the US$2.6 billion revenue.
This, according to civil society, is as a result of bad agreements signed with many of the mining companies by past governments.