Scroll To Top

Understanding Ghana’s Mining Support Services Regime

Unknown minThe mining industry comprises a number of players including mine support service providers. Mine support service providers provide support services to mineral right holders, including drilling and blasting services as well as the supply of mining equipment and spare parts. Under section 59 of the Minerals and Mining Act, 2006 (Act 703) support service providers who provide prescribed services to mineral right holders and are registered with the Commission[1] may be granted concessions. A reading of section 59 of Act 703 alone suggests that registration with the Minerals Commission as a support service provider is not mandatory. However, registration is required to obtain certain concessions that are spelt out in the Minerals and Mining (Support Services) Regulations, 2012 (L.I. 2174).

L.I. 2174 was made pursuant to sections 59 and 110(1) of Act 703. As indicated above, section 59 of Act 703 provides for mine support services. Section 110(1) of Act 703, on the other hand, provides for the making of regulations to give effect to Act 703.

L.I. 2174 amongst other matters, spells out the process for registering with the Commission as a mine support service provider, classification of support services and concessions that may be granted to registered support service providers.

In order to register as a service provider, an applicant[2] must submit a written application to the Commission in a form as set out in the First Schedule to L.I. 2174. This application must be accompanied with supporting documents including:

  1. A profile of the applicant;
  2. Particulars of incorporation in Ghana;
  3. The annual reports of the applicant (i.e. where the applicant is an existing company);
  4. A copy of the applicant’s contract with the mineral right holder, if any;
  5. Particulars of machinery and equipment to be used by the applicant;
  6. Evidence of the applicant’s financial resources;
  7. Business Plan of the applicant;
  8. Tax clearance certificate issued by the Ghana Revenue Authority to the applicant; and
  9. The applicant’s programme for the employment and training of Ghanaians in accordance with the Minerals and Mining (General) Regulations, 2012 (LI 2173).

Upon registration, the Commission issues an applicant with a certificate which is valid for one year from the date of issue. The certificate is renewable annually subject to compliance with the terms and conditions of the certificate and the Regulations.

Support service providers are classified into Class A and Class B. The defining difference between Class A and B service providers is nationality. Class A support services are open to both Ghanaians and non-Ghanaians whereas Class B support services are reserved for Ghanaians. Both classes, however, are required to be provided specifically and exclusively to a mineral right holder.

Class A support services include contract mining services, mining and ancillary construction services, assay laboratory services, drilling and blasting services, mining consultancy services, mineral exploration services, the supply of mining equipment and spare parts and fabrication of equipment and manufacturing of components and consumables specifically and exclusively for the mining industry.

Class B support services are contract mining services for small-scale mining[3] and haulage services to and from mine sites including the transportation of personnel.

Classes A and B support services are not limited to the above-mentioned services. The scope of services regarded as support services may be expanded to include any other service that is specifically and exclusively related to mining which the Commission considers necessary for the effective and sustainable development of the mining industry. Accordingly, the Commission, in the exercise of powers conferred on it by Regulations 2(1)(i) and 2(2)(c) of L.I. 2174, has classified healthcare services on mine sites,[4] air haulage services,[5] catering or camp management services[6] and security services[7] as mine support services.

As mentioned earlier in this article, registration as a support service provider entitles a person to certain concessions or benefits. Regulation 3 of L.I. 2174 outlines concessions that may be granted to a person who is registered with the Commission as a support service provider. A Class A support service provider may be granted concessionary rates of customs import duties in respect of plant, machinery, equipment and accessories imported specifically and exclusively for mining-related activities. These plants, machinery and equipment must, however, be listed in the Mining List which is the catalogue of mining machinery, equipment and consumables agreed upon by the Commission, Ghana Revenue Authority and the Chamber of Mines to be exempted or charged concessionary rate for customs import duties and value-added tax.

Also, a Class A service provider may be granted immigration quota in respect of an approved number of expatriate personnel. Additionally, a registered support service provider, irrespective of its class, may receive part payment of its services in foreign currency from the support service provider’s mining sector customers, for the purpose of acquiring machinery, equipment, spare parts and mining supplies for services provided specifically and exclusively to a mineral right holder or for servicing debts or paying dividends as approved by the Bank of Ghana upon the recommendation of the Commission. It may be noted that a Class B support service provider who provides contract mining services for small-scale mining including mining and processing of ore, reclamation, re-vegetation and management of mining operations is entitled to the same benefits as a Class A support service provider.

A registered support service provider is obliged to maintain records[8] at an address in Ghana known to the Commission and must allow an authorised officer of the Commission, at a reasonable time, to inspect the documents and take copies of them. A registered support service provider must also notify the Commission in writing of a change of office or recordkeeping address within seven (7) days of the change and submit monthly and annual reports[9] within specified timeframes. The reports must contain a signed declaration by the Chief Executive Officer that the particulars contained in the reports are accurate and complete. This is probably because it is an offence for a person to knowingly submit false or misleading information to the Commission. This is punishable on summary conviction to a fine of not less than one thousand penalty units[10] and not more than one thousand five hundred penalty units or a term of imprisonment of not more than five years or to both.

Even though the mining industry is primarily regulated by Act 703 and the regulations passed thereunder, it must be noted that a registered support service provider may have to meet other regulatory requirements. For instance, under the Ghana Investment Promotion Centre Act, 2013 (Act 865), enterprises with foreign participation are required to register with the Ghana Investment Promotion Centre (GIPC). A support service provider who registers with both the Commission and GIPC must comply with L.I. 2173 (in respect of training and employment) despite the grant of an automatic expatriate quota of up to four (4) persons under Act 865. Under L.I. 2173, a registered support service provider is required to submit for approval a programme for training and recruitment of Ghanaians. This includes details of ongoing and planned training and recruitment of Ghanaians to replace expatriates.

In conclusion, Ghana’s mining support services regime is benefit based. Although nothing in the law requires mining support service providers to register with the Commission, the law gives some concessions to support services providers which register with the Commission.

[1] Minerals Commission

[2] The legal regime contemplates artificial persons only i.e. companies incorporated in Ghana

[3] Also reserved for Ghanaians.

[4] Class A support service

[5] Class A support service

[6] Class B support service

[7] Class B support service

[8] Including documents and information

[9] The report contains information including the company details, employment statistics, and brief on operations, major equipment and other capital items for the project, environmental and financial issues.

[10] A penalty unit is equivalent to GH¢12.00.

TAGS: , , , ,

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

  1. Kwame Asomaning-Gyimah December 3, 2017 at 10:21 pm - Reply

    Very educating….

    • Yayra December 8, 2017 at 8:28 am - Reply

      Thank you Kwame

Leave A Response