Ghana Manganese Company shut down over $300m loss of revenue

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The Lands and Natural Resources Minister, has ordered the shutdown of the Ghana Manganese Company Limited until further notice effective Monday, August 5.

Kweku Asoma Cheremeh said the closure is in response to the company’s inability to fulfil its financial obligations which has resulted in over $300 million loss of revenue to the state.

“We are going to engage them to find an amicable solution to the infraction that they have committed. If indeed they do not have any good explanation for the happenings, then we will arraign them before court,” he said.

He added that government will also consider an outright take over the company or sell the company’s assets to defray the debt if it becomes necessary to do so.

Sometime in January, the Ghana Manganese Company Limited was directed to halt its mining operations to enable the state to undertake a thorough financial audit of its operations.

Subsequently, the Ministry agreed with the company that the audit could be carried out whiles mining operations are ongoing.

After the preliminary audit has been completed it came to light that the state is incurring huge losses through the operation of the company.

It came to the fore that the company failed to pay additional royalty ($12.8 million), additional corporate taxes ($79 million) and a loss of dividends declared ($6.1 million).

There was also a loss of $259 million additional revenue residing offshore from 2010 to 2017 as there was no transfer pricing audit performed prior to 2017.

The audit also noted major infrastructure deficiencies as a result of GMCL operations.

“Primarily, road and rail infrastructure are stretched beyond capacity and are close to complete failure. Aside from the findings of the audit report, there is also ample evidence of lack of compliance and circumvention of the local content policy following a complaint to the Ministry by local contractors.

”Ghana contractors providing services to GMCL are owed hundreds of millions of cedis though the company continues to expand its export of manganese,” he disclosed.

According to him, current figures available to the ministry suggests production and export are in the excess of three million metric tonnes.

“There are also defaults by the company in the payments of Annual Mineral Right Fees in excess of $4 million. These and several other infractions leave me no options as the sector Minister than to close down the operations of GMCL until further notice,” he said.

He said the Ministry together with the Minerals Commission and other relevant stakeholders will immediately commence discussions with the company “to resolve these and all other outstanding issues in the course of the shutdown.

 

Source: Myjoyonline.com

 

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