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REGULATORY CHANGES, REVENUE REPORTING AND DEVELOPMENTS IN GHANAIAN GOLD MINING SECTOR

PRESENTATION AT THE 15 TH INDIA INTERNATIONAL GOLD CONVENTION HELD AT LE MERIDIEN, KOCHI, INDIA ON 3 RD AUGUST, 2018. REGULATORY CHANGES, REVENUE REPORTING AND DEVELOPMENTS IN GHANAIAN GOLD MINING SECTOR. (JOSEPH YAW ABOAGYE) DIRECTOR, POLICY PLANNING MONITORING & EVALUATION

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REGULATORY CHANGES, REVENUE REPORTING AND DEVELOPMENTS IN GHANAIAN GOLD MINING SECTOR

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  1. PRESENTATION AT THE 15TH INDIA INTERNATIONAL GOLD CONVENTION HELD AT LE MERIDIEN, KOCHI, INDIA ON 3RD AUGUST, 2018 REGULATORY CHANGES, REVENUE REPORTING AND DEVELOPMENTS IN GHANAIAN GOLD MINING SECTOR (JOSEPH YAW ABOAGYE) DIRECTOR, POLICY PLANNING MONITORING & EVALUATION MINERALS COMMISSION, GHANA

  2. TABLE OF CONTENTS 1.0 Introduction 2.0 Policy & Legal Framework Governing Mining 3.0 Categories of Gold Exporters 4.0 Current Gold Export Processes 5.0 Challenges and Measures 6.0 Conclusion

  3. 1.0 INTRODUCTION • For the past 25 years Ghana has attracted significant mining sector investment amounting to US$19 billion. • Currently Ghana has 14 large-scale operating mines; i.e. 12 gold mines, 1 bauxite mine and 1 manganese mine. • In 2017, Ghana produced 4,231,376 ounces of gold. This resulted in export revenues of some US$5.7 billion. Significantly small scale miners contributed 34% (1.42 million ounces) of total gold production in 2017. • Total Foreign Direct Investment (FDI) into the minerals and mining sector in 2017 amounted to some US$1 billion. • In 2017, the mining sector contributed 16.30%to government revenue in the form of domestic tax as reported by the Ghana Revenue Authority. • The sector also employed 23,772 people in large-scale mining sub-sector whilst an estimated 1,000,000 people are generally engaged in artisanal and small-scale gold, diamonds and industrial minerals sub sector.

  4. 2.0 POLICY & LEGAL FRAMEWORK The various Laws and Policy governing mining operations in Ghana are as follows: • Constitution of the Republic of Ghana – Art. 257(6); Art. 269 • Act 450 – Minerals Commission’s Act, 1993 • Act 703 – Minerals and Mining Act, 2006 • Act 900 - Minerals and Mining (Amended) Act, 2016 • Minerals and Mining Policy of Ghana, 2014 • Other Legislations • L.I. 2173 - Minerals and Mining (General) Regulations, 2012 • L.I. 2174 - Minerals and Mining (Support Services) Regulations, 2012 • L.I. 2175 - Minerals and Mining (Compensation) Regulations, 2012 • L.I. 2176 - Minerals and Mining (Licensing) Regulations, 2012 • L.I. 2177 - Minerals and Mining (Explosives) Regulations, 2012 • L.I. 2182 - Minerals and Mining (Health, Safety and Tech.) Reg. 2012 • THE MINERALS AND MINING ACT, THE SUBSIDIARY LEGISLATIONS AND THE POLICIES ARE ADMINISTERED BY THE COMMISSION

  5. 3.0 CATEGORIES OF GOLD EXPORTERS • Basically, there are two categories of gold exporters in Ghana • All are licensed by Government of Ghana (represented by the Hon. Minister, Lands and Natural Resources) on recommendations of the Minerals Commission. • CAT. 1: Holders of Mining Lease Reg. 3, L.I. 2173 • Export gold produced from their mining operations • Currently, 12 mining lease holders have this permit • CAT. 2: Persons other than Mining Lease Holders Reg. 4, L.I. 2173 • Buy gold from small-scale miners and export • Process tailings from small-scale mining operations; recover gold and export • Process spent carbon and mill liners from large-scale mining operations, recover gold and export • Currently, 35 companies have this licence

  6. 4.0 CURRENT GOLD EXPORT PROCESSES Prior to export of gold from Ghana, a gold exporter goes through the following protocols: • Completion of Bank of Ghana’s Letter of Commitment (LOC) • Exporter will download the LOC from the GCNet Portal • Exporter provides information on quantity and value of gold to be exported, destination of the gold, details of the importer, method of payment and the name and particulars of the bank which receives the export proceeds. • Completed LOC is endorsed by GRA Customs Division Office at Kotoka International Airport (KIA). • Assaying of Gold by Government Reference Laboratory • PMMC was appointed Government Assayer on 27th October 2016 in line with Reg. 3(3) of LI 2173 • Appointment effectively ended the gold buying and exporting activities of PMMC. Also ended PMMCs ability to appoint Gold Buying Agents • Gold Exporter sends the gold to be exported to the Reference Laboratory operated by PMMC for confirmation of quantity and value • Examination and Sealing of Gold Bullion • Gold Exporter completes Customs Declaration Form • Gold is examined and sealed with Customs’ Seal and Reference Laboratory’s Seals • Gold is released for export after completion of the assay, examination and documentation which includes Assay Report, Airway Bill (AWB), CEPS Declaration Form, Proforma Invoice and a Parking List.

  7. 5.0 CHALLENGES AND MEASURES

  8. 6.0 CONCLUSIONS • Responsible Mining is not just about eliminating and minimizing negative impacts, it is about maximizing the positive impacts, and maximizing the value to society throughout the minerals cycle • For this reason, Government of Ghana has put in place a number of interventions to eliminate illicit gold trade i.e. smuggling, undervaluation, non-repatriation of proceeds, duping of unsuspected investors. • Ghana Government has put in place measures that will generate revenue (i.e. SSM Sustainability Fee) to manage and sustain the small-scale mining sector which provides the feed for local and international gold refineries • Ghana Government will continue to work at improving the gold mining sector by working with all other stakeholders including development partners to achieve sustainable development.

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