Cabinet Approves Reforms To Limit Mining Leases To 20 Years

The government has suggested lowering the maximum term of mining leases from 30 years to 20 years, as part of changes to the Minerals and Mining Act, 2006 (Act 703).

According to the Minister for Lands and Natural Resources Emmanuel Armah-Kofi Buah, the proposed modifications, which Cabinet has authorised, will be brought before Parliament for review.

Speaking on Wednesday, July 15, at the Government Accountability Series in Accra, the Minister stated that the review's goal is to make sure Ghana profits more from its mineral resources.

According to the existing legislation, mining corporations may be given a 30-year initial lease with the opportunity to extend it for an additional 30 years.

However, the proposed amendment seeks to put a 20-year limit on mining leases.

The Minister also revealed the introduction of mandatory Community Development Agreements which will require mining companies to negotiate and enter into direct agreements with host communities on development projects.

“I’ve also limited the fixed period to 20 years, and we have introduced community development agreements,” he said.

The new clause is to allay the long-held fears of mining communities about inadequate development benefits, Mr. Armah-Kofi Buah said.

“There are always communities that complain about developments. And so every mining lease will also have another additional community development agreement that has been signed between the mining company and the community,” he explained.

The Minister also said the current practice where companies unilaterally determine the form of support they provide to communities will be replaced with the new arrangement. 

“It’s no longer going to be the choice of a mining company who will decide, ‘I’ll give them some water.’ The community will negotiate in those mining agreements, with community agreements, their critical needs, and that will be agreed voluntarily by the mining company and the community,” he said.

Mr. Armah-Kofi Buah said the proposed reforms are part of a number of innovations outlined in the new mining legislation to strengthen governance and ensure communities benefit more directly from mining activities.