A conveyor belt and crusher at the one of Anglogold Mine
A conveyor belt and crusher at the one of Anglogold Mine

Civil society group, Third World Network (TWN) Africa is accusing mining giants, AngloGold Ashanti (AGA) of lacking expertise in deep level mining thereby placing the Obuasi mine under ?Care and Maintenance? resulting in job cuts.

? A conveyor belt and crusher at the one of Anglogold Mine

A conveyor belt and crusher at the one of Anglogold Mine

According to the Programme?Officer, Gender Unit for TWN Africa, Pauline Vande-Pallen, the company does not regard the local people as it has breached the stability agreement it signed with the government of Ghana in 2003.

She ?stressed that?the government?s silence on the closure of the mine seemed to suggest that it was in agreement with? AngloGold Ashanti?s intention to shut down the mine for what it called ?care and maintenance? for two years.

?For us the mine in Obuasi is not just for us it?s for the entire nation and the Obuasi mine is a national asset?, she stated

A statement issued recently by TWN Africa, noted among others that the Ghana government?s decision to award the then Obuasi mine to AngloGold instead of Randgold was as a result of a purported ?superior experience in deep level mining that the former was said to have possessed.

The group among the accusations observed that production at the Obuasi mine in 2002 before AGA?s takeover was 500,000 ounces of gold and that the expectation was AGA would have doubled the annual production which would lead to the creation of thousands of jobs for the people of Obuasi and its environs but unfortunately, production in 2013 was around 200,000 ounces of gold.

This, TWN Africa noted AGA does not have the otherwise superior experience in deep level mining to have been awarded the contract. AngloGold Ashanti at the beginning of this year, announced its intention to shut down the Obuasi mine for a period of about two years with the aim of undertaking what it termed ?Care and Maintenance?.

TWN Africa observed that over? 1,000 workers have been laid off and in spite of ongoing discussions with government, the company intends to further retrench the remaining workers numbering about 5,000 after which about 500 workers would be re-employed to ?guard and protect? the mine during the ?Care and Maintenance? period.

The ?group contended that ?In 2002, the underground mine in Prestea was put under a similar ?Care and Maintenance? for a period of two years. The mine has since not resumed production, resulting in dire economic and environmental consequences for the people of Prestea. Thousands of jobs were cut and most of the lands there cannot support farming activities following decades of mining-related pollution which continues?today?because of ongoing and widespread surface mining.?

The group said, ?The fiscal and regulatory incentives that were given under the stability agreement were given for the purposes of recapitalizing and re-equipping the Obuasi mine to expand output, not a declaration of ?Care and Maintenance?.

It further accuses AngloGold Ashanti of not paying corporate and indirect taxes to the government thereby robing it of revenue.

?Over the period also, there have been concerns about the payment of taxes by AGA. According to reports by the Extractive Industry Transparency Initiative (EITI), the Obuasi mine did not pay any corporate tax to the government of Ghana between 2004 and 2009. It is also uncertain if the Obuasi mine has made any payments to the government of Ghana as corporate taxes beyond 2009.

Last year, the Ghana Revenue Authority submitted tax assessments to AGA for a number of years following audits they undertook for the 2006 to 2008 to 2011 tax years. In these assessments, AGA was accused of not paying indirect taxes amounting to tens of millions of dollars over the assessment periods,? the statement said.

The ?group also noted that the mining company failed to establish a Community Trust Fund (CTF) when it began operations to develop its operational areas as contained in the stability agreement.

Attempts made by these reporters to get an official response from AngloGold Ashanti on the accusations proved futile; however, deep throat sources hinted that production at Obuasi merger with AngloGold in 2004 and 2013 ranged between 240,000 and 392,000 ounces of gold.

The source noted the low production was ?due mainly to underground challenges; old equipment, poor underground transport system and poor infrastructure. The rest are over bloated labour as well as poor prices of gold leading to lower production and high cost of production.?

Touching on allegations of tax evasion, the deep throat source admitted AGA has a stability agreement with the government and that accounted for the reason why the company does not pay corporate and indirect taxes.

The source said, the company instead pays royalties and community taxes and has so far paid over 80 million US dollars.

The source further hinted that the development of Obuasi was the responsibility of government but AGA has over the years built schools, hospitals, and provided job opportunities for the youth, modern stadium as well as an airport.

In 2003, the government signed the first ever stability agreement with AGA and offered a number of incentives to the company to revive the Obuasi mine.

Among the incentives offered was a 15-year freeze in tax instruments such as royalty (at 3 percent) and corporate tax rate (at 30 percent) and the permission to retain up to 80 percent of foreign currencies obtained from the sale of gold off-shore accounts.

The government also agreed that AGA?s ?operations will not be adversely affected by any new enactments or orders or by changes to the level of payments of any customs or duties relating to mining operations, taxes, fees and other fiscal imposts or laws relating to exchange control, transfer of capital and dividend remittance for a period of 15 years after the completion of the business combination.?

Story By Francis Tandoh/Roger A. Agana/Nana Appiah Acquaye

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.