Overview of Mineral Sector Regulation in Ghana

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Ghana is well endowed with substantial mineral resources, the major ones being gold, diamonds, manganese and bauxite. Gold is the predominant mineral produced in the country accounting for over 90 percent of all mineral revenues annually over the past two decades.[1] The mining sector currently contributes approximately 41 percent of total exports earnings, 14 percent of total tax revenues, and 5.5 percent of Ghana’s gross domestic product (GDP).[1] The 2006 Minerals and Mining Act states that these mineral resources belong to the Ghanaian people, and therefore their management is entrusted to the President in accordance with the governing provisions of the Constitution. Thus, the Parliament of Ghana may make specific laws regulating rights and interests in minerals. It is the specific mandate of the Minister of Lands and Natural Resources to govern access to minerals, on behalf of the President.[2]

Evolution of Mining Sector Regulation

In 1986 the Minerals and Mining Law (PNDC Law 153) was enacted to develop the sector and liberalise the mining sector, offering significant new benefits to investors in the area. The law established the Minerals Commission to regulate this development. Since the passing of the 1993 Minerals Commission Act (Act 450) the Commission hass been responsible for day-to-day administration, regulation and management of the mineral resources of Ghana. It advises the Minister of Lands and Natural Resources on matters relating to minerals policy and on the granting of mineral rights. The Commission’s mandate also includes formulation and monitoring of national policy for the exploration of mineral resources.[3]

The Small-Scale Gold Mining Law (PNDC Law 218), the Mercury Law (PNDC Law 217) and the Precious Minerals Marketing Corporation Law (PNDC Law 219) were passed in 1989 to formalise and integrate small-scale gold mining, control mercury usage by small-scale gold miners, and create legitimate marketing channels for the minerals produced by small-scale miners. This regulation allowed significant inflows of investment, substantially increased production of gold in the country, and allowed for some increase in manganese and bauxite production.[4]

Regulatory Framework

Since the 1980s the government has privatised the mining sector, leaving itself performing a largely regulatory role. There exists a complex regulatory structure in relation to the mining sector.[1] At a central level The Ministry of Lands and Natural Resources is required (by the President and Parliament) to regulate the mining sector. It coordinates this regulation through various 'subsector institutions'.[5] The Mining Commission is responsible for regulating mineral resources and managing minerals policy. The Geological Survey Department is tasked with collecting geological data, and creating a bank of geo-scientific information for use by the Ministry to assist regulation and policy-making. Inspectorate Division of the Mining Commission assumes the role of monitoring and enforcing the health, safety and environmental regulations that are detailed within mining law. The Precious Minerals Marketing Co. Ltd control the marketing channels for minerals and jewels produced within Ghana. At a local level, District Assemblies and Traditional Institutions retain some say over the nature of mining sector regulation, although central organisations have no direct accountability to them.[1]

Current Mining Sector Regulation

Government has developed a new mining law, Minerals and Mining Act 2006 (Act 703) to replace the Minerals and Mining Law, 1986. The Minister responsible for mining retains responsibility for the overall management of Ghana’s mineral resources and policy-making, including the grant of mineral rights. According to a 2009 UN report, unlike the old legislation, the process of drafting and passing the 2006 Minerals and Mining Act was marked by the involvement of key stakeholders such as mining sector officials, civil society organisations (CSOs), nongovernmental organisations (NGOs), local authorities, labour unions, commercial investors, academia and government revenue agencies.[2]

The new Act was designed with contemporary trends in minerals and mining legislation in mind and aimed to retain mining investment interests. Notable changes to the old Act of 1986 include a definitive time period within which the Ministry of Lands and Natural Resources must act in a decision over the allocation of mineral rights. Equally, written reasons must be provided explaining all such decisions - and mechanism for the contention of decisions is now in place. Regulations now apply equally to all parties, foreign or Ghanaian. The one exception being legislation specifically aimed at regulating artisanal and small-scale mining.[2]

As of February 2012, a draft of a new mining policy was being finalised for passage by Parliament.[3]

References

  1. 1.0 1.1 1.2 1.3 "Political Economy of the Mining Sector in Ghana" World Bank, retrieved 10 February 2012.
  2. 2.0 2.1 2.2 "A Report on Ghana’s mining sector for the 18th session of the UN Commission on sustainable development" UN Department of Economic and Social Affairs, retrieved 9 February 2012.
  3. 3.0 3.1 "The Role of the Minerals Commission in the Mining Industry" Ghana Extractive Industry Transparency Initiative, retrieved 9 February 2012.
  4. "Draft National Mining Policy" The Ministry of Lands and Natural Resources (Mines Subsector), retrieved 8 February 2012.
  5. "Ghana Mining Portal: Institutions" Ghana Mining Portal, retrieved 10 February 2012.