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AngloGold’s reopened mine may not bring development to Obuasi – Baffoe Intsiful

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AngloGold’s reopened mine may not bring development to Obuasi – Baffoe Intsiful

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.”

Job creation

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.

Source: citinewsroom.com

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6 arrested by National Security over illegal gold business

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6 arrested by National Security over illegal gold business

Some six individuals have been arrested by National Security officers in Kumasi, Ashanti Region for allegedly engaging in the illegal gold business.

Operatives of the National Security, who had the necessary permits, made the arrests.

The suspects have been transferred to the National Security headquarters in Accra for further interrogation.

Kojo Oppong Nkrumah who is the Minister for Information confirmed the arrest at a news conference in Kumasi yesterday but did not give further details.

The Minister also talked about the security situation in the country and said the government was doing everything practicable to ensure that the country was safe.

He said the government had shown good faith by retooling the security agencies and recruiting more men and women to beef up the security of the state.

Matters of security, he said, were critical to national development and would, therefore, be tackled with all urgency.

Source: primenewsghana.com

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Contractors going bankrupt; pay them – Nduom

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Contractors going bankrupt; pay them – Nduom

The Chairman of Groupe Nduom, Dr Papa Kwesi Nduom, has said the delay by the government in paying local contractors, some of whom, he said, are customers or investors, has led to the lock-up of GHS2.2 billion from the Groupe’s Gold Coast Fund Management, alone.

“When we keep fighting for Ghanaian contractors to be paid, we are fighting for customers/investors to get their money. How much? GHS 2.2 billion is currently locked up in the process from Gold Coast Fund Management alone”, Dr Nduom wrote on social media Saturday, 10 August 2019.

Other Ghanaian financial institutions, he said, “Have funds locked up in infrastructure projects. The contractors are going bankrupt. The customers have it worse. They are suffering. When a contractor is not paid after three years of completing a job, the financial institution does not get paid. The customers who invested their monies with the financial institutions don’t get paid”.

“Who should fund infrastructure – roads, bridges, schools, etc. – in Ghana?”, the former presidential candidate asked, adding: “Gold Coast has been doing it for 15 years. Over 14 billion Ghana Cedis invested. Now with a portfolio of 2.2 billion Ghana Cedis”.

“It is the government that stopped giving advance payment to contractors and asked them to pre-finance projects. Gold Coast stepped in to support our indigenous Ghanaian contractors and has funded over 600 projects. This is a good thing the company has done.

“Our concern is to get the payment process going so contractors can complete projects, get them certified, get paid so they can pay back what they owe to Gold Coast so that Gold Coast can pay back money to its customers/investors.

“This is not Nduom’s money. It is not politics. It is pocket-level economics. The money is in Ghana with government agencies and in infrastructure projects”, he said.

Dr Nduom added: “This is not the only investment made by Gold Coast, which is why it paid back over 1 billion Ghana cedis in 2018 and has paid about GHS100 million this year”.

Recently, a coalition of local contractors threatened to lock all public schools and facilities they built if the government delayed further in paying them their funds.

Source: classfmonline.com

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CBOD petroleum price outlook: Refined products review and outlook

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CBOD petroleum price outlook: Refined products review and outlook

The international market prices of gasoline and gasoil averaged $648.98/mt and $584.73/mt respectively in the first pricing window of July (12th-26th July 2019), $5.70/mt lower than the previous window in the case of gasoline and $0.89/mt higher than the previous window for gasoil.

These prices (12th-26th July) were 29% and 7% higher than average prices observed in the beginning pricing window of the year. Average international market prices have been sporadic during the year, starting the first window of January at $504/mt for gasoline and $545.63/mt for gasoil.

Prices for gasoline and gasoil peaked in the first selling window of June at $749.68/mt and $639.88/mt respectively. This was 49% and 17% higher than the prices observed in the first window of January 2019.

International market prices are expected to drop between 1%-2% for both gasoline and gasoil in the second pricing window of July (27th July-11th August 2019). This is attributable to the ongoing trade war between USA and China which has slowed the growth in China’s demand.

FuFeX60

The forward FX rate (FuFeX) used is the average of the quoted indicative forward forex rate from major oil financing banks adjusted by the covered-interest parity pricing model. The FuFex60 is computed as the average 60-day forward fx rate of selected major oil financing banks. The Fufex60 to be applied for the first selling window of August 2019 is Ghs5.60/USD.

The adoption of a FuFeX30 (30-day forward rate) instead of FuFeX60 can reduce pump prices by about 2%. It is therefore necessary that BDCs revise their trade credit tenor downwards to help reduce consumer prices at the pump.

The Ex-refinery Price Indicator (Xpi)

The Ex-ref price indicator (Xpi) is computed using the referenced international market prices as observed to be usually adopted by BDCs, factoring the CBOD economic breakeven benchmark premium for a given window and converted from USD/mt to Ghs/ltr using the FuFeX.

Source: CBOD

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