MINERAL POLICY AND FISCAL REGIME

• Ensuring that Ghana’s mineral endowment is managed on a sustainable economic, social and environmental basis and that there is an equitable sharing of the financial and developmental benefits of mining between investors and all Ghanaian stakeholders.
• Encouraging local and foreign private sector participation in the exploration for, and commercial exploitation of mineral resources, consistent with the government’s commitment to a free-market enterprise economy. The government recognizes that private sector investors need to be able to operate profitably, be internationally competitive and satisfy their shareholders’ and employees’ expectations. To this end, the government will establish and maintain:

- a conducive macro-economic environment for mining investment;
- a stable regulatory environment that provides for the transparent and even-handed treatment of investors; and
- a stable, competitive and fair fiscal regime.

• Achieve a socially acceptable balance between mining and the physical and human environment and ensure that internationally accepted standards of health, mining safety and environmental protection are observed by all participants in the mining sector.
• Encourage and facilitate orderly and sustainable development of small-scale mining. There is considerable potential for small-scale minerals exploitation in Ghana and the Government recognises that small scale mining can provide additional or alternative livelihoods in rural areas and can help to foster the development of Ghanaian mining skills, entrepreneurship and capital.
Empower Ghanaians to become professional miners, mine managers and owners by maximising opportunities for minerals-related education, training, career development and other support.
• Require respect for employee, gender and human rights in mining. The government wishes also to remove obstacles to participation in the mining sector on the basis of gender or marital status
• Encourage mining companies to develop a participatory and collaborative approach to mine planning, development and decommissioning, taking into account the needs of local communities, thereby fulfilling their role as socially responsible corporate citizens.
• Develop streamlined and effective institutional arrangements for the mining sector, together with adequate capacity to promote, authorise, monitor and regulate mining operations
• Apply modern principles of transparency and accountability to the administration of mining laws and regulations and facilitate community participation in such processes. To this end, the government recognises that there is a need for proper co-ordination between government departments and agencies, and that there is a need for dissemination of information to the public on all aspects of mining as a basis for informed participation.
• Endow Ghanaian mining authorities with the capacities to gather, analyse and disseminate geo-data necessary for the promotion of minerals sector investment.
• Act in harmony with regional and international partners and, to this end, to endorse and imple-ment principles that are established in regional and international conventions and other instruments and undertakings that are relevant to mining and to which Ghana is a party or signatory.
• Foster the development of a mining sector that is integrated with other elements of the national economy, which will contribute to the economic empowerment of Ghanaians by generating opportunities for local entrepreneurship, increase demand for local goods and services and, creating employment for Ghanaians.
The basic law governing the Minerals & Mining industry is the Minerals and Mining Act 2006, Act 703. This and associated legislation combines regulation of the mining industry with fiscal incentives for investors. Some of the more significant features of the legislation are:

ALL MINERALS ARE OWNED BY THE STATE:
The Minister of Lands, Forestry and Mines (MLFM) grants exclusive mineral rights. A summary of the types of mineral rights that can be granted under the Minerals and Mining Act is as indicated in the table below. No transfers are permitted without the approval of the MLFM.

• APPLICATION OF MINERAL LEGISLATION:
The legislation is applied equally to Ghanaians and foreigners, except for the provisions relating to small-scale mining of minerals, which is reserved for Ghanaians. However, foreigners can participate in the exploration and exploitation of industrial minerals where the proposed investment is not less than US$10 million.

• GOVERNMENT PARTICIPATION IN MINING LEASE:
The Government is entitled to a free-carried equity interest of 10% in mineral ventures. Any further participation is to be agreed with the holder.

• PAYMENT OF ROYALTIES:
Royalties vary from 3-6% of the gross value of minerals produced.

• MINING LEASE:
A person, not necessarily a holder of an RL or PL may apply for a mining lease.

• STABILITY AGREEMENT:
It seeks to protect the holder of a mineral right for a period of up to 15 years, from any adverse effects of future changes in law that are capable of imposing huge financial burden on the holder. The agreement is subject to parliamentary approval.

• DEVELOPMENT AGREEMENT:
The MLFM may enter into a Development Agreement (DA) with the holder of /applicant for a mining lease if the investment exceeds US$500 million. The DA may contain terms of a stability agreement, in addition to terms that may vary the mining law (especially the fiscal regime).

GEOLOGY AND MINERAL DEPOSITS

The most striking feature of the geology of Ghana is the parallel disposition of evenly spaced belts of folded Birimian metalavas. The width of each belt is 40 to 50 km, the distance between individual belts is approximately 90 km and the belts generally trend northeasterly.

The Birimian System in Ghana is part of the Birimian supracrustal sequence of West Africa, which extends from Ghana westwards to Senegal and Mauritania and northwards into Burkina Faso. The Birimian rocks consist of interlayered sedimentary and volcanic flow rocks metamorphosed to low greenschist facies of Barrovian type. It is subdivided into:

LOWER BIRIMIAN; these are metasedimentary rocks which are divided into volcaniclastic rocks, turbidite-re-lated wackes, argillitic rocks and chemical sediments.

UPPER BIRIMIAN; these consist chiefly of metalavas (metamorphosed basaltic and andesitic lavas). The Birimian gold deposits and occurrences are set in five parallel volcanic belts several hundred kilometers long and trending in a north easterly direction. These belts are the Ashanti, Sefwi, Kibi-Winneba, Bui and Bole-Na ngodi belts. They consist of tholeiitic lava flows and are separated by basins containing metasedimentary rocks and granitoids in different proportions. Sediments between belts consist of volcaniclastic rocks (pyroclastics and epiclastics) and volcanogenic argillites, which are derived from volcanoes of the belts.
Auriferous quartz-pebble conglomerates within the Tarkwaian System are exposed in the Tarkwa area. The Tarkwaian is a clastic sequence deposited in an elongate basin and is the second largest source of gold in Ghana. The gold deposits are fossil placer deposits and the mineralisation, somewhat remobilised, may represent detrital gold weathered out of the mineralised Birimian rocks. Similar to the South Africa ‘banket reefs’ of the Witwaterstrand and Transvaal, the Tarkwaian rocks occur in two well defined and one smaller northeasterly aligned belts. The main belt, lying immediately east of the main Prestea-Obuasi Birimian zone, extends from near the coast to the south of Tarkwa about 250 km to the northeast where it terminates at the edge of the Voltaian Basin. The main Tarkwaian belt has an average width of 16 km. It is believed that the Tarkwaian Banket Series was deposited in a braided stream channel environment beyond the mid-fan area with the gold derived from the primary vein and lode-type deposits in the underlying Birimian. Another belt of similar rocks occurs in the West Central Ghana near Banda, and smaller occurrences exist to the north and south of Bibiani and Kibi.
Alluvial gold deposit in Ghana can be found in most rivers draining the Birimian rocks. They occur in gravels of streams, river flats and old valleys on terraces and in beach and gravel sand. The placers are derived mainly from the primary vein and lode type deposit in the Birimian. Alluvial gold prospecting has been concentrated in the Birim, Pra, Jimi, Ankobra, Offin and Fura rivers.

MINERAL OCCURRENCE

Ghana abounds in minerals, as stated previously; the major ones currently being mined are gold, diamonds, bauxite and manganese. These minerals have been exploited over centuries. Since minerals are depletable resources, conscious efforts have to be made in finding new deposits as well as identifying other minerals which have the potential to support national development and also for export. Specifically, Under the Mining Sector Support Programme (MSSP) being implemented with European Union Support, about one-third of the surface area of Ghana is being covered with airborne geophysical surveys and detailed geological field mapping is on going in various prime areas of the country to generate up-to-date, investor friendly geo-scientific maps.
In order to provide mineral information to investors in the manner desired by investors and timeously, a component of the project is to develop an Information Management System which will involve the develop-ment of various databases, creation of an intranet to link up the various mining sector institutions to facili-tate information flow among the agencies and creation of an enhanced website – a Ghanaian mining portal will be launched shortly. Implementation of this project is at an advanced stage.
In the meantime, the country has up to date mineral related information in publications, concession maps, spatial geophysical and geological data (airborne geophysical coverage maps, geological maps showing various units and belts etc) in hard copy form, which serves as ready information to investors

DIAMONDS

Diamonds are recovered from river gravels mostly in the Eastern, Western and Central regions. The Ghana Consolidated Diamonds (GCD) is the only large-scale diamond mine in Ghana. GCD uses a strip and mine method with a stripping ratio of 3:1, using 4600
Manitowoc draglines. The company has operated 12 treatment plants over its life to date modernising to en-hance efficiency. The current plant is a 170 t/h washing plant, which is reported to have a current availability of 38%, and producing under capacity, due to age and obsolescence.
Available reserves stretch over an area of 240 km2 along the Birim River and is estimated to contain 14 Mct of proven reserve at an average grade of over 1.0 carat per cubic metre, 4.6 Mct of probable reserve and about 30 Mct of possible reserve in addition to associated fi ne gold. GCD also has a gold concession covering an area of 128 km2. No kimberlite discoveries have been reported. Government is currently looking for a strategic investor to take over the mine.

BAUXITE

Bauxite, derived by weathering of Paleoproterozoic Phyllites, is mined in the Awaso area of the Western Region. Reserves of 15 Mt have been reported. Other major bauxite deposits occur at Kibi and Nyinahin. Recently, Government has signed two Memoranda of Understanding (MOU) with ALCOA of USA and ALCAN of Canada over the Kibi and Nyinahin bauxite deposits. The main objective of the MOU is the development of an integrated aluminium industry in the country.

MANGANESE

Manganese ore in the form of manganese oxides and carbonates are mined at Nsuta in the Western Region. Total reserves are given as 4.7 Mt.

INDUSTRIAL MINERALS

Small-scale production of sand and gravel is widespread. Several small clay and kaolin deposits are worked for bricks and/or ceramic products. An ornamental granite is quarried near Bolgatanga in the Upper East Region. Several granite quarries are exploited to meet the increasing demand for rock and concrete aggregates by the road and building construction industry.


OTHER MINERALS

There are three major iron-ore deposits, which have industrial importance in the country. These are located at Oppon Mansi, Sheini and Pubo respectively. These deposits can be exploited as raw material to feed the iron and steel making industry. Indications of chromite, asbestors, andalusite, barite, mica, nepheline syenite, cassiterite, columbite, monazite, beryl, spodumene, molybdenite and on-shore alluvial ilmenite and rutile have been identified but have hardly been followed up.

PRESENT STATE OF EXPLORATION ACTIVITY: As of June 2006, 66 local and 47 foreign companies held prospecting/reconnaissance licences. Additionally, 31 companies had been granted mining leases. Many of the companies holding exploration licences are focusing on gold exploration. Companies currently engaged in exploration in Ghana can be divided into three groups:

I. Major international mining companies,
II. Junior international mining companies and
III. Local companies.

Major international (transnational) mining companies with interests in Ghana include: Gold Fields, Newmont, Golden Star Resources, ALCOA, ALCAN and Anglo Gold among others. The junior international companies are mainly from Canada, South Africa and Australia. These companies usually conduct exploration with the objective of quickly blocking out enough ore reserves for disposal of the upgraded property to major companies or in a few cases, to support a bankable feasibility study to raise funds for production, as in the case of Red back Mining Inc.
The local companies usually lack the capital and technical expertise to conduct modern exploration work. They are usually unable to finance exploration beyond the reconnaissance stage; they then proceed to look for partners in order to continue with the exploration work. Therefore, most concessions held by the local companies and some foreign junior companies are possible joint-venture opportunities for major or junior international companies.