AngloGold’s reopened mine may not bring development to Obuasi – Baffoe Intsiful
Kwasi Baffoe Intsiful, a Law Lecturer at the Ghana Institute of Management and Public Administration, GIMPA, has said the reopened AngloGold Obuasi Mine may not deliver the development residents are expecting especially in the area infrastructure.
Speaking on Citi TV/Citi FM‘s news analysis programme, The Big Issue on Saturday, Mr. Intsiful said the prospects are not as high as it looks because mining in Obuasi has not resulted in any major infrastructural and economic development of the town.
This he said is because policymakers fail to use revenue from mining to develop the mineral areas.
“I think we should slow down on the expectation. The President is talking about development, then they have to do a whole lot of work, because if you look at the current legal framework, in terms of development, I do not see anything new, I see the same old thing, if you look at Tarkwa, if you look at Prestea, it is the same because the paradigm hasn’t shifted,” he said.
He said until changes are made in the areas mentioned, there isn’t going to be any proper change in Obuasi to bring it to anything close to Johannesburg, South Africa.
On January 22, 2019, President Nana Akufo-Addo said the circumstances that led to the shut down of the AngloGold Ashanti Company Limited at Obuasi in the Ashanti Region would not reoccur under the watch of his administration.
He said this at the re-opening of the AngloGold Ashanti gold mine which had been closed since 2014.
“I assure management and staff of the mine that the sequence of events that led to the closure of the mine will not recur under the watch of this Government. The days of forceful encroachment on the concession of the company, as witnessed between 2010 and 2016, are over.”
AngloGold Ashanti’s Obuasi Mine shut down in 2014 because it was operating behind a development schedule for three years.
Gov’t targets US$2.2 billion in taxes from reopened AngloGold Ashanti Mine
Government is expected to receive direct taxes of about $2.2 billion from the reopened Anglogold Ashanti Gold Mine, should they meet the target of producing an estimated 500,000 ounces of gold each year.
This follows plans by the company to also invest about Ghc881 million into its initial redevelopment stage which will span for over two decades.
The total investment for the redevelopment of the Obuasi Gold mine is 1.6 billion dollars for the 22-year period.
Speaking on Citi Breakfast Show, Chief Executive Officer (CEO) of AngloGold Ashanti, Eric Asubonteng, maintained that the firm has restrategized to revamp its operation; hence these targets are likely to be attained to develop the country.
“So we are going to invest about 881 million over the initial period which we define as the first six years. By then we would have put in place all the necessary infrastructure and investment that we require for the remaining years of mine. We are currently looking at a life of mine for over 20 years.”
“On an average in the land mine, we are looking at between 400,000 to 500,000 ounces per annum. With this, we are estimating that US$5.3 billion will be retained in the country. This amount includes direct taxes to government, support to local businesses, corporate social responsibilities expenses and others.”
“The direct taxes to government will be about US$2.2 billion over this period. If you look at the total revenue that the mine is going to generate over the life of mine, this US$5.3 represents just over 51 percent of the revenue pie that is going to be retained in the country. The rest goes into paying off the initial capital investment and then shareholder returns.”
Meanwhile, it is expected that the resumption of the operations of the mining firm will also provide about 2,500 jobs.
Mr. Asubonteng also disclosed that several other people will be employed on a temporary basis in the course of production.
“Now that we have changed our mining method to a mechanized and automated manner, the number of employees we are going to hire wouldn’t be high. But at an early stage of the production stage, we are looking at about 2,000 and 2,500 people to be engaged. The scale of production will definitely be higher than when we suspended operations. We will then go through a construction period of about two years. During that period, other people will be engaged on a short contract basis temporarily.”
Obuasi Mine redevelopment
The redevelopment project is scheduled to take approximately 30 months to deliver with an approximately 22-year life of mine to produce four hundred thousand ounces of gold per annum.
The project phase also includes the redesigned underground mine, refurbished and upgraded underground and surface infrastructure to support efficient operations.