…As Gov’t Terminates Mining Contracts of GCDGL
Government has cancelled the mining leases of Great Consolidated Diamond Ghana Ltd, a subsidiary of the Jospong Group of Companies.
A letter announcing the cancellation and signed by the Minister of Lands and Natural Resources, Kwaku Asomah-Cheremeh, explained that the action is pursuant to Section 68 of the Minerals and Mining Act 2006 (Act 703).
The Minister indicated the cancellation is without prejudice to any obligation or liabilities incurred by GCDGL in relation to leases prior to the cancellation.
In December, 2018 a letter of notice was served on the company to remedy breach of its mining license within 120 days of the receipt of the letter.
According to the letter, GCDGL had breached the terms of six mining leases granted it in December 2012.
And owes the Minerals Commission US$7,705,600 in accrued mineral right fees, which is a clear breach of Section 68 (1) (a) of the Minerals and Mining Act 2006 (Act 703).
“The Company has been dormant for five (5) years and therefore has not been able to carry out its obligations including the production of diamonds required under Section 69 (1) (a) of the Minerals and Mining Act 2006 (Act 703),” the letter says.
“GCDGL is hereby required to remedy the above-mentioned breaches within one hundred and twenty (120) days from the date of this notice.”
“Please take note that failure to satisfactorily remedy the breaches within the time specified in this notice will result in the termination of the mining leases,” the letter concludes.
Government in 2011, through the Divestiture Implementation Committee, sold assets of the then Ghana Consolidated Diamonds Ltd (GCD), which was then solely owned by the state to the Great Consolidated Diamonds Ghana Ltd (GCDGL), an associate company of Jospong Group of Companies.
The government at the time entered into an asset sale and purchase agreement with GCDGL and as part of the terms of the said contract, the assets of GCD were sold to GCDGL for US$17 million on certain terms and conditions.
However, as at December 5, 2011, GCDGL had made only part payment of $2.7m, according to the sale contract executed by the parties.
As of November 2018, GCDGL reportedly owed GRIDCo, the bulk power distributor, more than GH¢5 million ($1m) in unpaid electricity bills.
Its failure to settle the debt led to the disconnection of power to the entire company and surrounding communities.
MP for the Akwatia Constituency, Ms Mercy Adu-Gyamfi, in December 2017 appealed to government in a statement she read on the floor of Parliament, to withdraw the licence of GCDGL for failing to honour its contractual obligation to revive operations of the Ghana Consolidated Diamonds Ghana Limited (GCDL) at Akwatia in the Eastern Region.
According to her, inauguration of the company brought great hope to the people of Akwatia and the constituents whose fortunes have, since large-scale mining begun in 1924, depended on mining in the town.
The hopeful dreams, she said, have since fizzled out because of the failures of the company.