Mining companies face risks of shorter capital-intensive investments following the government’s decision to halve mining leases from the original thirty years to fifteen years as part of a major overhaul of the sector.

Speaking during a policy roundtable discussion hosted by the Institute of Economic Affairs (IEA) in Accra, the Chief Executive Officer (CEO) of Ghana’s Minerals Commission, Martin Ayisi, revealed that his outfit decided to limit lease periods after discovering that most mining companies do not even have ore reserves to last 20–30 years.

About 80% of the mines have less than 10 years of life remaining unless they invest in further exploration. With this finding, the fifteen-year cap does not automatically become a standard lease period for all companies; rather, each company’s lease will be determined by how much ore it can prove it possesses.

“...But most importantly, we ran some models, and I realised that, as we speak, if the mining companies don't do any extensive exploration, about 80% of them will not have more than a 10-year mine life. And I can give examples.

“On average, only about six companies can do anything more. I can talk about this Chinese mine: if no work is done in two years. But the report they submitted said they have 17 years, and underground 22 years,” he detailed.

According to him, many of the companies in Ghana do not have enough ore to even last them a decade, let alone three, hence the government’s decision to cap leases at a decade and a half.

“If you think about all this, all the other companies, even Knight, which is the biggest ore in Africa today, their lifespan is 11 years. So why should we be talking about 30 years? They found some good ore bodies; they’re saying that expansion just adds 8 years’ life, maximum 10 years’ life.

“So barely can you hit your chest and say you can get about six or seven mines that have maybe 15 years or more. So why should we keep 30 years or even 20 years in our book? So we said no — nobody can get more than 15 years. Now this is what determines, or goes into determining, the duration,” he added.

Before the government announced the capping of mining leases, companies were granted up to 30 years with the possibility of renewal under the Minerals and Mining Act, 2006 (Act 703). Under this law, mining companies were given a three-year prospecting license, which was reportedly renewable indefinitely, often without rigorous checks. This allowed companies to hold rights without necessarily investing in exploration.

Mr. Ayisi further explained that, after conducting checks, his outfit discovered most African countries have similar lease times. He noted that many of these countries, such as Kenya, copied Ghana’s mining laws verbatim. However, these laws have not served the sector well, prompting Ghana to chart a new path that could set an example for others.

Consequently, the new lease period has been capped at fifteen years.

“It's never helped us. I did a check around the world. I found an average between 21 and 30 years. Most countries in Africa are between 25 and 30. And a lot of the laws in African countries were basically Ghana's law. A lot of countries copied from us. I also happen to write many of the laws in East Africa, so I know what I'm talking about. Kenya's law is just a copycat of Ghana's. We just do it for them. Mining is basically in Ghana.

One was in French, one was in English, etc., and some of them have gone to..... So we have decided that the upper limit of mining should be 15 years. We have the record in the world in terms of how far you can go. And don't get me wrong — when we say the limit, it doesn't mean the record will get 15 years. So we are dropping it from 30 to 15 years. Very significant for us,” the CEO mentioned.

The government will now determine the lease period each mining company is entitled to. The commission in charge of mining will base its decision on how much mineral the company has proven it can mine and what its feasibility studies reveal.

“So when a company does exploration: ‘I’ve done exploration for this number of years, I found some good ore, I’ve been able to convert many of my resources — let’s say a million ounces.’ It says, okay, my feasibility, they tell you everything there — the type of mineral, impact, social, whatever. …” he mentioned.

Still on mining, His Excellency President John Dramani Mahama has appointed three distinguished professionals to the GoldBod Tribunals. This was announced in a post shared on the authority’s official Facebook page yesterday, Tuesday, August 19. The inauguration ceremony was held at the Ministry of Finance in Accra, where the Minister of Finance, Dr. Cassiel Ato Forson, swore in the members of the tribunal.

The tribunal members who were inaugurated are Biadela Mortey Akpadzi (Chairman), Hamidu Mariam (Member), and Justin Pwavra Teriwajah (Member). The tribunal has been charged with the task of “considering appeals regarding decisions made by the Gold Board, matters relating to licensing under the Act, and rulings of the Dispute Resolution Committee.”

GoldBod is the official regulatory authority overseeing Ghana’s artisanal and small-scale gold sector. In a recent development, the Narcotics Control Commission (NACOC) on Tuesday, July 29, handed over seventeen (17) gold bars valued at $1.7 million to the Ghana Gold Board (GoldBod).

At the Ministry of the Interior in Accra, the gold bars seized by officers of the Upper East Command of the Narcotics Control Commission at the Paga Border Post from two Burkinabe nationals who were attempting to smuggle them out of the country were received by the Chief Executive Officer of GoldBod, Sammy Gyamfi (Esq.).

The handing-over ceremony was witnessed by the Chief Director of the Ministry, Mrs. Doreen Annan; the Director General of NACOC, Brigadier General Maxwell Obuba Mantey; and other senior officials from NACOC and GoldBod.

This development comes after the Acting Chief Executive Officer of GoldBod, Mr. Sammy Gyamfi (Esq.), stressed that persons who engage in gold trading without GoldBod licenses after June 21 would be prosecuted. He made this clear during a meeting with the Chamber of Licensed Gold Buyers.

"As we have announced, by the 21st of this month, we shall ensure that only holders of GoldBod licenses are able to buy gold, and so if you are not licensed by the GoldBod, you cannot buy gold after June 21st. It will constitute a punishable offence to do so."

Mr. Gyamfi urged gold buyers to forge partnerships that will boost compliance with the new GoldBod licensing regime. The acting CEO noted that the process for registering has been made seamless and free of corruption.

"We have removed the human interface element, and so there is no corruption, bribery, inducements, or favouritism. It is a very transparent and competitive process, and once you qualify, you get the license. I don’t take or demand bribes before I issue a license."