Goldfields has betrayed the Government of Ghana – Centre for Social Impact Studies

South African mining giant, Goldfields Ghana Limited, has announced that it will be retrenching a substantial number of its workers at its Tarkwa mine. The company has explained that it is adopting a new business model that will see it sub-contracting portions of its operations to some qualified contractors. The move by the company will see the retrenchment of over 2,000 workers. The impact of this proposed retrenchment exercise on individual households and the wider local economy will be very dire. It will be recalled that AngloGold Ashanti four years ago similarly retrenched over 5,000 workers. The negative ramifications of this exercise is still being felt in Obuasi and the nation as a whole.

The move by Goldfields Ghana to retrench the workers has come as a surprise to many Ghanaians. In our opinion the exercise smacks of bad faith on the part of the company, after virtually blackmailing the Government of Ghana to enter into a Development Agreement with it in early 2016. Among other incentives the Agreement gives Goldfields Ghana a reduced corporate tax from 35 percent to 32.5 percent. Additionally, the company will be paying royalty at the sliding rate of 3 – 5 percent, instead of the flat rate of 5 percent indexed to the price of gold. The Agreement is valid for 11 years.

There is no doubt that like Newmont and AngloGold Ashanti before it, Goldfields Ghana has been the beneficiary of the largesse of a state desperate to retain foreign direct investment in its mining sector. It is therefore not surprising that the company states on its website that the fiscal concessions they were given under the Agreement is saving them up to USD33 million a year effective 2016.

Almost a year after the Government of Ghana bent over backwards and gave Goldfields Ghana these generous incentives, it is disappointing to note that the company has betrayed the trust of the government. Typical of most multinational mining companies operating in our sub region, Goldfields has disregarded its own commitment and promises and rather proposed an insensitive retrenchment exercise that will see 2,150 workers losing their jobs and livelihoods. We are saddened that the inordinate desire to reap supernormal profits has lured Goldfields to make this decision. This is a clear violation of Section 68 sub section 1(c) and (d) of the Minerals and Mining Acts 703. Interestingly this is the second time Goldfields is laying off staff in three years. In 2014, its Damang operations sacked over 400 workers citing a similar excuse.

It is against this background that the Centre for Social Impact Studies (CeSIS), a non-governmental research and advocacy organisation, is calling on government to immediately halt this move by Goldfields Ghana to lay off more than 2,000 of its employees. With a precarious economy marked by high unemployment and youth agitations, it will be suicidal for government to approve a move by the company that will swell the ranks of the unemployed. Furthermore, CeSIS calls on government to revive the work of the Professor Akilagpa Sawyer-led team that started renegotiating the terms of Stability and Development Agreements signed between government and the mining companies to ensure that the state is not short-changed in any negotiation.

While commending the Trades Union Congress (TUC) and its affiliate, the Ghana Mineworkers Union (GMU) for their resilience, we urge all well-meaning Ghanaians particularly civil society organisations to support and participate in the campaign to ensure that Goldfields rescinds its decision to retrench its workers. This glaring case of corporate greed must not be countenanced in our country again.

Richard Kojo Ellimah

(Executive Director)

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