GHEITI Advocates Open Bidding For Mining Concessions

By Edmund Mingle

The 2014 Ghana Extractive Industries Transparency Initiative (GHEITI) Report has called for a review of the mining licensing regime that allows the Minerals Commission to grant licences on a “first- come first-serve basis.”

According to the report on the mining sector, the first-come first serve condition does not make the licensing system productive.

Mining concessions are often characterized with controversy

“The determination of who came first is left to the Commission. Again the country could possibly be losing needed funds.

“In order to ensure full transparency in the system, an open round of bidding should be conducted with the highest bidder obtaining the concession. This will ensure transparency and also has the potential of generating higher revenue,” the report recommended

It also suggested to the Minerals Commission to expedite plans of introducing the tendering process.

At a media workshop organised by the Institute of Financial Journalists (IFEJ), in partnership with GIZ, the German Development Cooperation, at Dodowa near Accra, to discuss the report, Mr. Kwaku Boa-Amponsem of Boas & Associates, which produced the report, noted that that there was a need for more transparency in the licensing regime.

Currently, per the regulations of the Minerals Commission, applications for mining lease and licence, including reconnaissance/prospecting mineral right for concessions, are dealt with on a “first-come first- considered basis, which means that, no application would be considered until the first in time goes through the process and is rejected.

But Boa-Amponsem explained that the current regime is prone to corruption, especially as the Commission is the sole determinant of who first applied for a mining concession.

In addition, he said some companies who do not have the resources to proceed after the reconnaissance and prospecting stages, would secure the licence only to sell the concession to make profit.

As recommended by the report, he was confident that through an open bidding process the Commission would be able to determine which companies have the resources to operate so as to derive the needed benefits for the State and host communities.

The Commission is often accused of not being transparent in the granting of licences and mining lease.

For instance, the Ghana Association of Small Scale Miners (GASSM), last month, accused the Commission of lack of transparency in allocating mineral concession for mining.

According to GASSM, lands or concessions have become difficult to secure from the Minerals Commission as certain individuals are allocated the concession who in turn lease to the miners.

Toni Aubynn, CEO of Minerals Commission

But the Commission refuted the claims, saying “the small-scale mining license acquisition process, guided by the Minerals and Mining Act and the Minerals and Mining (Licensing) Regulations, is transparent, neutral and based on merit.”

Touching on the development of the mining sector, the Report expressed worry over the delay in passage of the Mineral Development Fund (MDF) Bill into law, which it said was hampering transfer and utilisation of funds to the mining sector institutions for effective execution of projects.

The Report recorded over GH21 million  as the amount spent on mining sector institutions for 2014 , excluding the transfer to Office of the Administrator of Stool Lands, representing less than 10 per cent of the royalty proceeds meant for MDF activities.

“It is recommended that Parliament, at the earliest convenience, pass the MDF bill into law to ensure strict adherence of disbursement requirements to sector institutions,” the Report noted.