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State Ownership of Minerals in Ghana

Posted in Mining, Natural Resources7 months ago • Written by Eunice Yayra Loh5 Comments

Source:www.azureviral.com

Minerals are substances that occur naturally in the Earth’s crust. Minerals therefore form part of the land from which they are exploited. Legally, land includes not only the soil, but everything attached to it, whether attached by the course of nature as trees, herbage and water, or by the hand of man, as buildings and fences.[1] This finds expression in the Latin maxim ‘quicquid plantatur solo, solo cedit’, which means that whatever is affixed to the soil belongs to the soil. Hence, title to the soil includes everything in the soil or attached to it.

Until 1962, ownership of land included the minerals found in the land. Therefore, where communities, chiefs, traditional authorities, clans, families or individuals owned land under customary law, they also owned the minerals in the land.

Then in 1962, the Minerals Act, 1962 (Act 126) was passed. The Act provided for the vesting of the “entire property in, and control of all minerals in, under or upon, any lands in Ghana, all rivers, streams and watercourses throughout Ghana and land covered by territorial waters” in the President of the Republic of Ghana in trust for the people of Ghana.[2] Minerals therefore became the property of the State regardless of where they were found. At this point, ownership of land became divorced from ownership of minerals found in, on or over the land.

Along with vesting minerals in the President in trust for the people of Ghana, Act 126 also prescribed a licensing regime for granting mineral rights. The President was empowered under Section 2 of Act 126 to grant permits for prospecting for minerals, winning and obtaining minerals amongst others. Licensing became a condition precedent to exploiting minerals.[3] The aim of the licensing regime is to ensure proper regulation of the mining industry in order to derive optimal benefits from the exploitation of the minerals for the people of Ghana.

In 1986, the Minerals and Mining Act, 1986 (Act 153) repealed Act 126. Similar to the provision in Act 126, Act 153 provided for the vesting of all minerals, wherever located within the territorial land and waters of Ghana in the President[4] on behalf of the people of Ghana. Since then, the concept of state ownership of minerals has been continued in the Constitution of Ghana, 1992[5] and the Minerals and Mining Act, 2006 (Act 703).[6]

Under the current mining law, i.e. Act 703, various regulations have been passed to facilitate the regulation of mining in the country, including the Minerals and Mining (Licensing) Regulations, 2012 (L.I. 2176). Section 5 of Act 703 empowers the Minister responsible for mines, on behalf of the President, to grant, revoke, suspend or renew mineral rights. Where a mineral right is for exploitation rather than exploration the mineral right granted by the Minister is subject to ratification by Parliament.[7] L.I. 2176 provides elaborate procedures for all transactions relating to mineral rights, including transfer, assignment, mortgage, or any other form of dealing in the mineral right, which require the consent of the Minister. [8]

As a result of the separation of ownership of minerals from the ownership of land, a number of difficulties arise, especially as mining operations necessarily impact the land. For instance, can a land owner prevent a mineral right holder from carrying out mineral operations on the land? It appears that provided the land owner has been adequately compensated for the disturbance of the land owner’s rights, the mineral right holder is entitled to enter the land.[9] Act 703 requires the mineral right holder to pay annual ground rent[10] to the owner of the land, as well as compensation for disturbance of the rights of the owner[11] in accordance with certain principles, such as deprivation of use, loss or damage to immovable property, loss of earnings from land under cultivation.[12]

Even though mineral royalties are paid to the state as the owner of minerals,[13] the Minerals Development Fund Act, 2016 (Act 912) provides for payment of ten percent of royalties to the Office of the Administrator of Stool Lands, which distributes the royalties in the manner prescribed in Article 267(6) of the Constitution to the relevant stool, traditional authority and District Assembly. Presumably, the allocation to the stool and the traditional authority is premised on their ownership of or authority over the lands on which mining occurs. A further twenty percent of mineral royalties paid to the MDF is to be utilized for among other things development projects within mining communities.

In conclusion, it is noted that as a general rule the owner of land owns everything attached to the land; but an exception to this rule is found in the case of minerals, which are owned by the state. Notwithstanding the vesting of minerals in the state, the land owner is entitled to ground rent and compensation where the land owner’s rights would be impacted by the mineral operations.

[1] Black’s law Dictionary

[2] Section 1

[3] Section 2 of Act 126

[4] i.e. the Provisional National Defence Council under the law.

[5] Article 257(6)

[6] Section 1

[7] Article 268(1) of the 1992 Constitution and Section 5(4) of Act 703.

[8] A further assertion of ownership of minerals by the President. See also section 14 of Act 703.

[9] Section 13(9) of Act 703.

[10] Section 23.

[11] Section 73.

[12] Section 74.

[13] Section 25 of Act 703

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5 Comments so far. Feel free to join this conversation.

  1. Esinam Tegbey June 26, 2017 at 2:25 pm - Reply

    Great job

    • Yayra July 1, 2017 at 5:32 pm - Reply

      Thank you Esinam

  2. Kwame Asomaning-Gyimah June 29, 2017 at 4:47 pm - Reply

    Great piece. Very insightful and educative.

    • Yayra July 2, 2017 at 2:57 pm - Reply

      Most grateful

  3. Nii August 14, 2017 at 8:14 am - Reply

    Insightful

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