Highlights of Global Gold Dore Forum For more details visit

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1 Highlights of Global Gold Dore Forum 2017 For more details visit

2 GGDF 2017 COVERAGE Address by the CEO of Minerals Commission, Dr Toni Aubynn Topic-Recent Developments in Ghana s Gold Mining Sector: Policy Reforms to Promote Investment, Regulate Trade and Conduct Business in Responsible manner. through the Parliamentary vetting processes, and God willing, we will soon have him as the substantive Minister responsible for the mining sector. Fellow dignitaries here with me on the high table, Distinguished participants, Distinguished Invited Guests, Ladies and Gentlemen. I am most grateful for the opportunity to address this important forum to set the tone for further discussions. Let me on behalf of the Ministry of Lands and Natural Resources and Minerals Commission, well you to this beautiful country of ours, Ghana. Three days ago, our new President, H.E. Nana Addo Dankwa Akufo- Addo nominated Hon John Peter Amewu as the Minister-designate as the new Minister for Lands and Natural Resources, he will go I am very much aware that the forum will provide opportunities for networking on responsible gold sourcing as well as attracting potential investors to Ghana. I am sure some of you might have noticed the euphoria and excitement in the country in the last month or so. The explanation is simple. Ghana once again exhibited political maturity and the consolidation of its democracy by peacefully conducting free and fair elections and seamlessly transferring political power from one elected party to another. I am therefore grateful to the organizers for choosing to hold the Global Gold Dore Conference here in Ghana. This is evidence of the confidence that investors continue to show in Ghana s economy. Page 8 Volume 7 Issue 2 9 February 2017

3 GGDF 2017 COVERAGE While welcoming you to the beautiful city of Accra it is important to highlight a number of developments in Ghana s Gold Mining Sector: in particular some Policy Reforms designed to Promote Investment, Regulate Trade in the sector. 2 After several years of efforts, Ghana finally launched her Minerals and Mining Policy in February last year. The thrust of the policy is to ensure mining contributes to sustainable development. Government will continue to implement these policies with active collaboration with stakeholders to ensure a winwin situation for all. In the last four decades, Ghana s Minerals and mining activities have been conducted under the Minerals and Mining PNDC Law 153 as amended and seamlessly replaced by Minerals and Mining Act 706 Act 2006, which contained a considerable improvement in the previous laws, with attendant comprehensive sets of regulations. The Establishment of the Minerals Commission in the 1980s provides a clear institutional approach in doing business in the mining industry. Thus, you are not only assured of robust and resilient legal and institutional environment in conducting your business in the minerals sector, it also means that you do not need to rely on individuals and personalities to conduct your business as, I am told, occurs elsewhere. Your investments will always remain safe here in Ghana. Investment Promotion As parts of efforts to continue to attract and retain investment in the country and to maintain a careful balance between incentives granted to mineral sector investors and benefits that accrue from the exploitation of our mineral resources a number of policies have been pursued. These include: (i) a comprehensive review of the mining fiscal and regulatory regime that ensures Predictability and stability of fiscal incentives over time; Transparency and a level playing field for all companies; Broad and active Stakeholder Engagement; and International Competitiveness (ii)adoption of the Africa Mining Vision and other International Policies that deepens good governance and transparency in the extractive sector. 3 It may interest you to note that the 2013 Natural Resource Governance Institute (NRGI) Resource Governance Index (a measure of transparency and accountability in the oil, gas and mining sectors) rated Ghana as the 15th most complaint country out of a total of 58 countries that were assessed. The Index assesses the quality of four key governance components: Institutional and Legal Setting; Reporting Practices; Safeguards and Quality Controls; and Enabling Environment. This positive index indicator on good governance in the extractive industry including mining sector holds potential for prospective investors to partner existing exploration companies or invest in greenfield concessions. (iii) Development of Mining Casdastre Administration System. This is in line with the Minerals and Mining Act, 2006 (Act 703) and the Minerals and Mining (Licensing) Regulations, 2012 (LI2176) to promote timeous acquisition of mineral rights. Currently Ghana is receiving support from the Australian Government to establish her mining cadastre. A key milestone of the project was chalked in July 2016 when an online data repository was launched via The online repository is a web based portal where all data recorded in the Mining Cadastre pertaining to minerals rights and related revenues are published. The system when fully completed will enhance Volume 7 Issue 2 9 February 2017 Page 9

4 GGDF 2017 COVERAGE transparency, accountability and compliance in the management of mineral rights in Ghana. Again, under this new system, information relating to existing mining concessions as well as status of new applications (payments made, concession validity, size, location among 4 others) can be assessed and tracked online. It is expected that come April 2017, investors can conduct full cartographic searches and apply online for mineral rights. Trade Regulations Distinguished ladies and gentlemen, Ghana has adequate provisions in regulating the gold trade sub-sector. The Minerals and Mining Act, 2006 (Act 703), section 7 and the Minerals and Mining General Regulations, 2012 (L.I.2173) schedule 3 and 4, deal with exportation, sale and disposal of minerals particularly gold in Ghana. One therefore cannot operate gold business in Ghana without first, obtaining licence issued by the Minister responsible for mines. It is worthy to note here that, a holder of a licence to export, sell or dispose of gold shall comply with the conditions specified in the licence and any other conditions that the Minister may prescribe. Establishment of Gold Assay laboratory Ladies and gentlemen, in order to deepen transparency in the export of minerals in the out of the country, and also maximize revenue collection from the gold mining sector, the Government of Ghana is acquiring capacity to verify the actual amount (fineness of gold) in bullions exported from Ghana. To this end an independent assay and bullion reference Laboratory prior to export will soon be inaugurated at the precinct of Kotoka International Airport (KIA) here in Accra. This will validate the percentage purity of bullion for export. The establishment of a Government Assay Laboratory for the first time in Ghana will enable the country determine independently the quantity and purity of all Gold that is shipped out of Ghana rather than relying solely on the assay value of mining companies and the returns from refineries. This project is being supported by the World Bank. The PMMC, a Government authorized body will handle the gold assaying. Distinguished Participants,, the mention of PMMC brings to fore the feat we all chalked as stakeholders in the gold trade business last year. Following the legal suit in 2015 between the Association of Gold Exporters of Ghana on one hand and the BOG, PMMC 5 and GRA on the other, the Commission realizing the possible far reaching economic loss to the state and the parties involved, intervened by seeking out-of-settlement. The constructive consultations that ensued with the active participation of all the parties resulted in the development of new procedures that is currently governing the exportation of gold by Licensed Gold Exporters (LGE) in the country. Ladies and Gentlemen, let me take this opportunity to once again thank all the stakeholders who worked tirelessly to bring this impasse to a fruitful closure. Let me also assure all that, the Commission is working through the sector Ministry to ensure that measures as was agreed by all parties shall be in force until substituted by other procedures that may subsequently be prescribed as we look up to the programming and implementation of gold assaying at the Government Reference Laboratory. Ladies and Gentlemen, commissioning of the Asanko Gold Mine, located at MansoNkran in the Amansie West District on June 7, 2016 for full-scale production, gives further credence to Ghana s position as the preferred destination for mining investment. This was at such a critical time of low gold price. This is expected to boost the country s economic growth by creating jobs for the local people and generating revenue for government by way of taxes and royalties. Page 10 Volume 7 Issue 2 9 February 2017

5 GGDF 2017 COVERAGE This is further underscored, by the establishment of a major gold refinery. Government sees the merit in partnering the private sector to establish gold refineries for many reasons. Responsible Business Conduct Distinguished Participants, Ghana s mining sector has undoubtedly remained amongst one of highly regulated sectors on the continent. A number of mining Ministries delegations from across the continent have visited Ghana on a study tour of the mining sector to learn about the best mining practices and the regulatory environment we have instituted in managing mining operations in the country. Unfortunately, this positive testimonial has been negated by the activities of illegal miners who operate indiscriminately across mining communities, resulting in serious environmental challenges for the country which include degraded lands, open mine pits, polluted water bodies and polluted atmosphere. The activities of foreigners in the illegal small-scale mining trade in recent years have added to the extensive destruction of water bodies due to the use of heavy mining equipment such as excavators, bulldozers etc. In order to meet one of the policy objectives of the Minerals and Mining Policy of Ghana i.e. ensuring high level of environmental stewardship in the exploitation and use of minerals, there is the need to strategies to help address the environmental effects of the illegal mining menace in Ghana. In doing so, we have proposed to re-categorize mining to meet the changing needs of the varied investors in the mining sector. The proposal is to have the Artisanal Mining segment, the Small Scale Mining segment and the Medium Scale Mining segment with specifically tailored set of environmental and safety requirements for each of the segments. Gold Sourcing Programme The Minerals Commission has since 2014 partnered Solidaridad, an international Civil Society Organization in its flagship programme, Partnering for Better Livelihoods in the Gold Supply Chain. This three year project seeks to achieve the following: Artisanal and Small-Scale (ASM) mines in Ghana operating legally and are eligible for fairmined certification; Artisanal and Small-Scale mines earning more income from improved management and production; Artisanal and Small Miners operate responsibly in line with Responsible Jewellery Council criteria; Increased volume of responsible traceable gold available to buyers etc. Conclusion Distinguished Participants, I wish to emphasize that the desired goal of every mineral resource endowed nation is to fashion out and implement policies and strategies that will transform the mineral resource into other forms of capital aimed at contributing to sustainable development. Therefore, your deliberations at this conference should focus not only in trading gold dore in Ghana, but also, look at how best to invest in the local economy to add value to Ghana s natural resources. I wish you the best in your deliberations. Thank you once again. Disclaimer: Views are personal and not the views of the publisher. Volume 7 Issue 2 9 February 2017 Page 11

6 GGDF 2017 COVERAGE Gold Dore Trade in Africa: Potential and Challenges - Ghana Perspective Mr Kwabena Asante Asare, Chairman, Association of Gold Exporters of Ghana Distinguished guests, ladies and gentlemen, it is a privilege for me as The chairman of the Association of Gold Exporters of Ghana (AGEG) to address this August House. Ghana, which used to be called the Gold Coast continues to live by that name with 8,373,566 Ozs of gold produced and exported by the large scale mines, from 2013 to 2015 and 4,118,646 Ozs by the small scale mines within the same period respectively. Courtesy Minerals Commission. The Potential of Ghana concerning gold trade in Africa is therefore enormous, though the precious metal is nonrenewable and therefore stands the chance of declining availability without responsible exploitation. The gold trade industry in Ghana has been liberalised over a decade now and the contribution by the sector cannot be overemphasized The formation of our August Association with its attendant formulation of code of ethics has gone a long way to curtail some perceived negative practices in the industry. The Association as part of its code of Ethics has been consulting stakeholders in a bid to eliminate Child labour and other criminal activities in the upstream process. The challenges, being encountered in the industry, hinge on difficulty in accessing funds, misconception of the industry and for that matter, the numerous incursions for fees by various governmental agencies. Indeed, these challenges have the potential to bring about the very evils that prompted the liberalisation of the sector. The review of the Minerals Law which introduced a withholding tax of 10% and subsequently reduced to 3% is just one of the challenges the sector is facing which may sway the projected gains as our neighbouring countries have lower rates. Introduction of 0.5% levy on exports by Minerals Commission as small scale sustainability fund on the total sales per month and 0.118% {VAT Inclusive) payable to PMMC for assaying are yet another cost challenge, notwithstanding operational fees at the airport, as well as intangible operational costs. A recent policy direction which highly affected the licensing regime of our members has impacted very heavily on our books. It is therefore heartwarming that, through proper dialogue, a workable mechanism of making it mandatory to obtain certificate from the state-run Precious Minerals Marketing Corporation {PMMC) for any dore gold exports to the world markets has the potential to increase the state s monitoring mechanism. Indeed, Ghanaians, as most of us are, will be happy to see Ghana gain more from the exploitation of the precious metal which is non-renewable. However, we also see a greater evil eroding the projected gains if the conditions in our surrounding countries are not well bench-marked. It is our dream that we will have the sector well streamlined to attract the required investments for the mutual benefit of our nation and the investors. We as the Association of Gold Exporters of Ghana would like to take this opportunity for the first time, to plead with the authorities to consult with us before coming out with policies relating to our industry. I would like to personally take this opportunity to warn the new investors, that there are a lot of scammers within the system. It is always not advisable to do gold transaction in hotels and other unauthorized places. A lot of scammers pose as gold dealers and exporters and offer outrageous and unrealistic discounts to unsuspecting clients where they become victims of their nefarious activities. So it is very important to deal with licensed miners, licensed exporters or a member of our Association and please take a few minutes of your time to consult with the Minerals Commission. I thank you. Disclaimer: Views are personal and not the views of the publisher. Page 12 Volume 7 Issue 2 9 February 2017

7 GGDF 2017 COVERAGE Gold Dore Trade in Africa Potential and Challenges in DRC and ICGLR Region Dr. Bali Barume (BGR) There is increasing competition for ASM-sourced gold from Africa, as the result of steady gold demand from the Far and Middle East. The National governments in the Great Lake Region (i.e. DRC and Tanzania) are also coming to appreciate the strong actual and potential contribution to employment and income generated by ASM gold activity. Artisanal Gold mining is contributing significantly to the livelihood of more than miners and their families in the Eastern Provinces of the Democratic Republic of the Congo (DRC). The sector has boomed in the past years The DRC s artisanal gold production is about 10 tonnes per year (UnGoE, 2013) Challenges and lessons learned Implementation of a Responsible Supply chain and OECD Due Diligence Artisanal gold its origins, transport routes, and export points has been in the last years under increased attention from both national and international actors in DRC and the ICGLR region and beyond. The implication of ASM gold supply chains in the financing and support of armed groups in the DR Congo (and other conflict-affected or highrisk areas) has been the chief area of concern. Smuggling For the national government in DRC, the main pre-occupation has been illegal crossborder gold flows and undeclared gold exports (i.e. smuggling). All legal gold exports from DRC and other ICGLR countries currently require an export license normally issued and processed through the ministry of mines that demonstrates that a gold exporter has paid all the appropriate royalties and export fees. Due Dilligence and Certifcation schemes Due Diligence and certification Schemes are effective tools for responsible sourcing 1.- OECD Due Diligence Guidance 2.- ICGLR Mineral Certification/ Export Licences A regional certification Mechanism has been implemented in 2011 to comply with the OECD Due Diligence guidance as well as the Dodd Frank Act (section 1502). The ICGLR Certificate documents that due diligence has been performed on the associated supply chain. Page 14 Volume 7 Issue 2 9 February 2017

8 GGDF 2017 COVERAGE BGR Gold Pilot project Kampene Considering the importance of the artisanal gold sector in DRC, the DRC Ministry of Mines with support of BGR has started a Gold Pilot Project in Kampene. The project proposes to source the gold from artisanal mine sites around the town of Kampene and to install a transparent, traceable and responsible supply chain from the local gold producers. Other than being conflict free, the gold would also be conform to national and international transparency initiatives and OECD due diligence standards for every part of the supply chain. The main objectives of the pilot supply chain are to formalize all actors in the upstream supply chain and exclude all illicit actors from the gold production. Transport and commercialize the gold through an official and transparent channel from the pit to the international buyer Assure regular and secure financial transactions between the miners, the cooperatives and the international buyer. Start: 2016 Estimated monthly Production: Kg Type of deposits Alluvial deposits along the valley, mining consists in first clearing out an area with spades and pickaxes until the gold bearing conglomerate, at the base level is reached. No chemical product Congo (DRC). The sector has is used to process the ore or boomed in the past years. separate the gold. All legal gold exports from DRC The primary deposit is mainly and the ICGLR region currently mined underground, by galleries require an export license and and pits that follow the goldbearing quartz veins in the by CEEC in order to comply the ICGLR certificate issued uppermost-altered layer. The with the OECD Due Diligence mineral is concentrated in Guidance. sluices fit with carpets. The The BGR Gold Pilot supply chain obtained concentrate is mixed in Kampene in the Province with mercury to obtain a Maniema has started in mercury-gold amalgam that is Gold from Kampene shall be later burned in order to obtain exported to Middle and Far relatively pure gold (80-90% Au). East. The BGR and the Ministry of Summary Points Mines in DRC are looking for Artisanal Gold mining is refineries and international contributing significantly to the buyers to source Gold from the livelihood of more than 200 mine sites around Kampene. 000 miners and their families Extension to other mines in the Eastern Provinces of the planned in DRC in Democratic Republic of the Disclaimer: Views are personal and not the views of the publisher. Volume 7 Issue 2 9 February 2017 Page 15

9 GGDF 2017 COVERAGE India can Play an Instrumental Role to Foster Global Responsible Supply Chains of Gold Mr Louis Marechal, Policy Advisor, Extractives, Responsible Business Conduct, OECD The OECD s work on responsible mineral supply chains has benefited from the active contribution of OECD countries as well as important mineral producing, processing and consuming countries, such as China, the United Arab Emirates and countries from Latin America and Central Africa. This cooperation has allowed for significant improvements in mineral supply chains transparency and curbing of illicit financial flows and illicit trade from the exploitation of minerals. Across the world, gold production and trade represent a significant source of income for hundreds of thousands, if not millions of people, particularly in developing countries. India, as the first or second (alternatively depending on the year) consuming market of gold in the world, plays a very significant role in this aspect, increasingly importing material from, in particular, Africa and Latin America. A recent report by the World Gold Council (WGC) noted that a challenge facing India s gold industry is that part of it operates in the grey market. This minority has benefited from anonymity and a lack of transparency on price, purity, taxes and supply sources. The WGC further notes that the Indian gold industry is increasingly getting organised (in particular the retailers) and has managed to significantly increase its refining capacity, from a mere three to four refineries in 2013 to 30 refineries in In parallel to this drastic evolution of the industry in India, international buyers of gold have in the past 3 to 4 years significantly developed their sourcing requirements, going beyond purely physical specifications to include responsible sourcing criteria, as defined by international standards and regulation. One of those international standards was adopted in 2011 when the Organisation for Economic Cooperation and Development (OECD) worked together with non-oecd countries, the private sector and civil society to negotiate the so-calledoecd Due Diligence Guidance on Responsible Supply Chains of Minerals from Conflict- Affected and High-Risk Areas( OECD Guidance ). In just over 4 years, this Guidance has become the de facto international standard to foster global responsible supply chains of minerals. The OECD Guidance is now used in national regulations (e.g. section 1502 of the US Dodd Frank Wall Street Reform and Consumer Protection Act; the draft European Union (EU) Regulation on Responsible Mineral Supply Chains, which aims to ensure that gold imported into the EU is sourced responsibly) and industry compliance Page 16 Volume 7 Issue 2 9 February 2017

10 GGDF 2017 COVERAGE programmes (e.g. the London Bullion Market Association Responsible Gold Guidance) for companies to avoid contributing to conflict, respect human rights, and comply with international anti-money laundering and terrorist financing standards through their mineral sourcing practices. Its ultimate purpose though is to ensure that responsible investment flows into producing countries to support local economic development as a pillar of stability and peace. The OECD s work on responsible mineral supply chains has benefited from the active contribution of OECD countries as well as important mineral producing, processing and consuming countries, such as China, the United Arab Emirates and countries from Latin America and Central Africa. This cooperation has allowed for significant improvements in mineral supply chains transparency and curbing of illicit financial flows and illicit trade from the exploitation of minerals. As one of the leading global consuming markets of gold, India clearly has a crucial role to play in global efforts towards responsible supply chains of minerals. The Gem & Jewellery Export Promotion Council of India (GJEPC) has regularly participated in OECD s Forums on Responsible Mineral Supply Chains since Their engagement has already enabled export-oriented jewellery industries in India to have a voice and help shape global developments on responsible gold. In 2015, the OECD sponsored a Roundtable on Responsible Gold with the support of the Centre for Responsible Business and the Government of India. This Roundtable helped advance discussions with relevant governmental authorities and the private sector on future cooperation In January 2017, the OECD Secretariat had the honour to be invited to speak at the first edition of the Global Gold Dore Forum organised in Accra, Ghana, to connect Indian buyers with Ghanaians gold producers. For the OECD, it was an important opportunity to strengthen our engagement with West African stakeholders while at the same time developing contacts with Indian private sector representatives. The importance of implementing international standards relating to responsible sourcing of gold figured prominently in the discussion and raised the interest of many participants, both domestic and international. and activities to foster responsible practices in the Indian gold industry. In January 2017, the OECD Secretariat had the honour to be invited to speak at the first edition of the Global Gold Dore Forum organised in Accra, Ghana, to connect Indian buyers with Ghanaians gold producers. For the OECD, it was an important opportunity to strengthen our engagement with West African stakeholders while at the same time developing contacts with Indian private sector representatives. The importance of implementing international standards relating to responsible sourcing of gold figured prominently in the discussion and raised the interest of many participants, both domestic and international. Looking forward, developing the interest and participation of Indian stakeholders in the fight against illegal exploitation of gold is instrumental to the strengthening of global and responsible supply chains of minerals. The OECD stands ready to provide all the support it can to the Indian government and private sector to further promote transparency and integrity of the local gold market. Disclaimer: Views are personal and not the views of the publisher. Volume 7 Issue 2 9 February 2017 Page 17

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