Ghana sets rules to mine gold in forest reserves

Published by MAC on 2003-09-03

Ghana sets rules to mine gold in forest reserves

3 September 2003

Story by Kwaku Sakyi-Addo, Reuters News Service, Accra, Ghana

Ghana is looking to grant five licences for companies to mine gold in forest reserves, partly because these areas have already been badly damaged, and it has set conditions for awarding the permits, the mines minister said yesterday.

The five companies being considered are the world's largest gold miner Newmont NEM.N Mining Corp MGC.AX , Ghana's Ashanti Goldfields AGC.GH ASL.N , Canada's Birim Goldfields BGI.TO , Satellite/Bogosu Gold and Australia's Red Back RBK.AX . A committee representing the West African country's forestry department, the environmental protection agency, mines and minerals commissions and local authorities were assessing the applications, Mines Minister Cecilia Bannerman told reporters.

"If the assessment is positive we'll give them the licences. Loggers and small scale illegal miners who know there's gold in these areas have already degraded the forests," she said.

"Many of these (forest) reserves are reserves only on paper."

Ghana is Africa's second largest gold producer after South Africa and it also has bauxite, aluminium and salt resources. Mining contributes about 45 percent of the former British colony's foreign exchange earnings.

The five companies already have prospecting licences in forestry reserves in different parts of Ghana and have applied for mining rights, but they have faced opposition from traditional chiefs and environmentalists.

Bannerman said the successful applicants would be required to pay an additional royalty of 0.6 percent on the value of every ounce of gold mined to cover the cost of monitoring and enforcement of the licence conditions.

Mining companies are already obliged to pay a three percent royalty to the government on the value of gold produced.

The companies would also be required to reclaim the land after the mine was exhausted and to post reclamation bonds to cover the cost of any required reclamation work carried out by the government rather than the company.

"Additionally, only the actual mining will be allowed within the forest reserve. All other activities, including processing and accommodation, are to be located outside the reserve," Bannerman said.