Global Future Resource cannot manage Bogoso-Prestea Mine: Union demands termination of contract

By Edzorna Francis Mensah

Ghana Mining Workers Union (GMWU) has accused the new managers of Bogoso-Prestea Mine of lacking the needed funds to run the mine successfully.

They therefore, in a petition asked Parliament to intervene in this matter to save the Bogoso-Prestea Mine, protect workers’ incomes and livelihoods, and get the struggling domestic economies of Bogoso and Prestea back on their feet.

According to them, The Bogoso-Prestea Mine has a promising future, and coupled with the current unprecedented gold price which has consistently traded over and above $2000 for the last year running, it has the potential to fundamentally change the fortunes of workers, transform the Bogoso-Prestea communities and contribute significantly to Ghana’s GDP only if the right amount of investment is injected into the operations.

The Union in a petition signed by the General Secretary, Abdul-Moomin Gbana presented to the Speaker of Parliament and the Minister of Lands and Natural Resources said it’s “urgently imperative to terminate the mining lease to pave the way for other prospective investors to take over the Bogoso-Prestea Mine since the current managers lack the financial capacity to resuscitate the company.

He said, Future Global Resources lacks the financial capacity to inject the needed capital into the Bogoso-Prestea Mine since 2020 and indeed has demonstrated its inability to show cause to the Minerals Commission during the 120-day notice period why the mining lease should not be terminated.

“We call on Parliament to intervene by ensuring that the mining lease is terminated with immediate effect and the Bogoso-Prestea Mine is put on sale to allow other prospective investors to take over the mine and run it for the greater good of all stakeholders”.

They also strongly request that a post-sale audit of the transaction be conducted to determine if proper procedures were followed since the public is not familiar with any parliamentary-level consideration of the sale before ministerial approval.

Background

In September 2020, Golden Star Resources (GSR), owners of the Wassa and Bogoso/Prestea Mines, sold 90 percent of its interest in the Bogoso-Prestea Mine to Future Global Resources (FGR).

The decision which received Government support at the time, was expected to bring fresh impetus, focus, and investment capacity to the Bogoso-Prestea mine.

Rather strangely, unlike previous deals involving companies like Newmont, Gold Fields, and AngloGold Ashanti which made palpable investment declarations and commitments to inject additional capital as a significant part of their transactions, this critical capital requirement was completely missing in the FGR transaction.

Indeed, before the completion of the FGR transaction, several key red flags and concerns were highlighted by several stakeholders including the Union which touched on not just the seeming lack of experience of FGR which was curiously incorporated only in 2019 and therefore was only barely a year old in mining and extraction at the time, very serious concerns were also raised about the financial capacity of FGR to operate the Bogoso-Prestea Mine.

Regrettably, even though the Sector Minister at the time was adequately seized with these red flags and concerns raised by these key stakeholders about the transaction and more specifically the financial capacity of FGR to operate the Bogoso-Prestea Mine if the transaction was approved without a demonstrable investment plan submitted by FGR to Government, he allegedly chose to ignore every call and went ahead to approve the sale on 30th September 2020.

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