Business News of Thursday, 5 August 2021
Source: www.ghanaweb.live
2021-08-05VIDEO FLASHBACK: Govt shuts down GMCL as state records over US$200 million loses
play videoKwaku Asomah-Cheremeh, former Lands and Natural Resources Minister
The Ministry of Lands and Resources indefinitely closed down the Ghana Manganese Company Limited (GMCL) citing huge loses to the state for the period of 2010 – 2017.
The decision, according to the former sector Minister, Kwaku Asomah-Cheremeh, was as a result of a lack of transparency in the operations of some mining companies in Ghana which has been a
Read full articlesource of “serious concern” to the Ministry.
He noted there was a manipulation of the sales in order to stockpile ore prior to adjusting the price downwards by $0.65 for every DMTU adding that this price per production manipulation was conservatively estimated to be $3.6m.
Read the full story originally published on August 5, 2019, on Ghanaweb
The Ministry of Lands and Resources has indefinitely closed down the Ghana Manganese Company Limited (GMCL) citing huge loses to the state for the period of 2010 – 2017.
The decision, according to the sector Minister, Kwaku Asomah-Cheremeh, follows the apparent lack of transparency in the operations of some mining companies in Ghana which has been a source of “serious concern” to the Ministry.
Hence the Ministry decided on an audit of the company to ascertain the causes of the loses.
Findings from the audit were based on Fair Pricing Model utilizing best business practices, open source data as well as information obtained from verifiable business intelligence centers.
Results indicated that an additional revenue residing offshore from 2010 to 2017 with no transfer pricing audit performed prior to 2017 recorded loses of a whopping $259m.
Further, loss of dividends within the period amounted to $6.1m while additional corporate tax due was $79m.
Aside the findings of the audit report, Cheremeh added that in late 2014 and 2015, just before the sales agreement reached between Manganese Trading Limited (MTL) as the sole off-taker of the total volume of the manganese produced by GMCL, there was a manipulation of the sales in order to stockpile ore prior to adjusting the price downwards by $0.65 for every DMTU.
Calculated loss due to this price per production manipulation was conservatively estimated to be $3.6m.
The Audit has also noted major infrastructural deficiencies as a result of GMCL operations. Primarily road and rail infrastructures are stretched beyond capacity and are close to complete failure
The Minister disclosed that Ghanaian contractors providing services to GMCL are owned hundreds of millions of Ghana Cedis even though the company continuous to expand its export of manganese.
“Current figures available to the ministry suggest production and export in excess of 3 million metric tonnes.” He told the media.
“These and several other infractions leave me no option as the sector minister than to close down the operations of GMCL until further notice. The company is therefore instructed to a stop all mining, exploration, and export of minerals effective August 6, 2019.”
The ministry together with the Minerals Commission and other relevant stakeholders will immediately commence discussions with Ghana Manganese to resolve these and all other outstanding issues in the course of the shutdown.
