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Gold Fields' agreement with government illegal – Third World Network – Citifmonline

Monday, 4 April 2016

The Third World Network has described as illegal the development agreement between the government of Ghana and Goldfields Ghana Limited.

According to the Network, Parliament’s waving of a notice period and ratifying the development agreement raises questions which need to be answered.

The government of Ghana through Parliament agreed to a new development agreement with Goldfields Ghana limited which according to the 1992 constitution is to see Goldfields invest 500 million dollars in its mines.

The new agreement also has a fiscal stability agreement which granted royalty and tax concession to the mining company.

Speaking to Citi Business News the coordinator of the Third World Network Dr Yao Graham called on government and parliament to disclose the details of the agreement.

“A development agreement may and usually include stability…the most relevant part is that a new sliding rate for royalties with a ceiling of 5 percent has been introduced. Where they (Goldfields) are now, they’ll be paying the basic.”

“If you look at Article 48 which makes provision for stability agreement, it says that the agreement is to ensure that the holder of the mining lease will not be adversely affected by a new enactment, other instrument or other action. It may not be adequately affected by subsequent changes to the level of payment of customs, taxes and other physical imports. So I cannot see any basis in the law for revising Goldfields’ existing fiscal obligations downwards,” Dr. Yao Graham stated.

Though he contends that it is necessary to assist distressed mining companies, the Coordinator of the Third World Network insisted the law must be followed in all the processes.

Responding to whether the Parliamentarians and the Minister had engaged in any form of illegality, Dr. Graham said,

“They have violated the law on the face of what has been published so they should provide information that will discredit what I am saying.”.

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