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The Gold Assay Center at Kotoka International Airport (KIA) is having a significant mitigating effect on tax evasion in the gold export sector.
The Minister of Lands and Natural Resources, Mr. Kwaku Asomah-Cheremeh, said that since its creation in 2016, the center had avoided tax evasion worth GH ¢ 14.1 million.
Addressing the Meet-the Press forum in Accra on Wednesday, the minister said that the total gold analyzed at the center from 2016 to July 2020 was 13,492,032.70 ounces, valued at nearly $ 19 million.
“The total tax revenues earned by the government for the analysis during the period amounted to GH ¢ 14.1 million. Without the analysis process, this would have been lost, ”he added.
He said production companies had also exported gold over the years without independent confirmation of actual ore volumes and grades prior to export.
“To address the situation, the ministry established an analysis center at KIA to adequately track (weigh, test, value and certify) the actual volumes and grades of gold being exported. I am pleased to say that as it is today, gold exported out of the country goes through the analysis process for true value validation. The Gold Assay Center at the airport generates taxes and fees for gold by validating the gold before export, ”he said.
The center was originally supposed to validate gold from small-scale mining industries, but its capacity was updated in 2018 to extend its mandate to large-scale industries.
Responsibility
Asomah-Cheremeh said that to ensure due responsibility for mineral exports, weigh bridges were built to track the shipment of bulk minerals.
“The ministry, in 2017, identified that the export of minerals in bulk was carried out by companies without adequate monitoring mechanisms to confirm the real volume of minerals produced and exported.
“To address the problem, the ministry has built two weigh bridges at Apemanim in the Ahanta West district in the western region and Awaso in the Bibiani-Anhwiaso-Bekwai municipality in the north western region. These are to track and confirm the actual volumes transported from the mines to the port of Takoradi. They must also ensure that Ghana is not defrauded in any way with regard to bulk mineral shipments, ”he said.
The minister said that the minerals sector continues to be the largest contributor of foreign exchange, with gold being the main commodity.
However, he said, research is currently underway on the country’s mineral base to help diversify the sector.
Production
Mr. Asomah-Cheremeh said that the production performance of Ghana’s major minerals during the period under review witnessed roller coaster trends in all major minerals produced.
He said that with regard to gold, more than 4.2 million ounces were produced in 2016, and almost the same production figure was achieved in 2017.
“For 2018, production increased significantly to almost five million ounces and fell to almost 4.7 million ounces in 2019. During the first half of 2020, 2.2 million ounces of gold were produced.
“For bauxite, the total production was around 1.3 million metric tons in 2016. That increased to about 1.5 million metric tons in 2017. In 2018, the production figure fell to one million tons. metric, and the situation was no different in 2019, with the production of 1.1 million metric tons. As of June 2020, around 500,000 metric tons had been produced, ”he said.
The minister indicated that in the case of manganese, production increased from two million metric tons in 2016 to three million metric tons in 2017, while production in 2018 increased to 4.4 million metric tons and 5.4 million metric tons in 2019.
He said that during the first half of 2020, about 470,000 metric tons of manganese were produced.
Generation of income
Asomah-Cheremeh said that Ghana continued to depend on mineral revenues for its development, indicating that the tax revenue collected in 2016 was ¢ 1.6 billion GH, which increased to ¢ 2.2 billion GH in 2017 and 2.4 billion GH of GH in 2018.
However, revenue fell to GH ¢ 1.9 billion in 2019, and in the middle of this year, revenue was GH ¢ 1.3 billion.
Total mineral royalties had also seen a systematic increase, reaching GH ¢ 1 billion in 2019, while the semi-annual amount stood at GH ¢ 659 million, he said.
Once again, he said, mining merchandise exports also saw an increase from $ 5 billion in 2016 to $ 6.6 billion in 2019, making mining one of the main sources of foreign exchange for Ghana.
He said that due to the current favorable price of gold, total mineral merchandise exports grew steadily to $ 3.5 billion during the first half of this year, compared to $ 1.6 billion during the same period in 2019.
Gross domestic product (GDP)
Regarding the sector’s contribution to GDP, Asomah-Cheremeh said that the mining and quarrying subsector contributed 8.5% of GDP in 2016, 10.9% in 2017, and 14.9% in 2019.
Regarding local participation in the sector, he said that it had been increasing.
He said that in 2017, 105 mine support services companies were registered and operated in the sector, with the number rising to 114 in 2018 and 240 at the end of 2019.
“Since the period under review, the country has been able to retain more than $ 1.42 billion through local acquisitions, which would otherwise have been used to import production inputs for the mining industry,” he said.
Legacy challenges
Listing some of the challenges faced by the sector since the government took office in 2017, he mentioned, among others, illegal mining, lack of alternative livelihood programs for communities in mining areas, collapse of companies large-scale mining and over-reliance on gold mining.
“To address the challenges, the ministry adopted a series of strategies and programs that produced remarkable results,” he said.
He said that in order to give the local population the opportunity to participate in mining in a well structured way, the government was implementing the Community Mining Program.
So far, he said, 14 mining plans have been launched.
Excavators seized
Asomah-Cheremeh said 157 excavators had been seized in the exercise to curb illegal small-scale mining (galamsey).
He denied allegations that 500 seized excavators were missing.
He said that all excavators were available and that the ministry was currently working to reconcile the figures, as well as developing a database to help manage the equipment.
“Once again, the ministry is working with the Office of the Attorney General to ensure full compliance with the Minerals and Mining Law of 2006 (Law 703), as amended by the Minerals and Mining Amendment Law of 2019 (Law 995) , especially sections (9) and (10), ”he said.
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