“ Every morning in Africa, a gazette awakens knowing that it must outrun the fastest lion if it wants to stay alive. The lion also wakes up knowing it must run faster than the slowest gazette, or it will starve to death. It makes no difference, whether you are a lion or gazette, when the sun comes up, you will better be running”, so says an African adage.
The Ghanaian economy has become so competitive that it has resulted in a daily struggle of corporate bodies for their survival.
In effect, some of these corporate bodies have resorted to doing everything possible to either stay on top or maintain their share of the market.
As a result of the competitive nature of the market, these corporate bodies have devised ingenious but aggressive strategies of informing the public about the availability of their products and services.
The adoption of these new strategies has helped some of the corporate bodies to expand their frontiers and are growing from strength to strength, whilst those who have refused to join the new trend have been kept crawling along the way. For those Companies which have been left behind in the competitive market environment, it is not for the reasons that they lack vision, creativity, motivation, challenge, setbacks and failures.
Those who have succeeded have managed their growth, adapted to changes, overcome market failures and fought hard against all odds on the market.
The ‘dog eats dog’ syndrome has resulted in some companies adopting new strategies of doing business, which has gone a long way in destroying the environment.
Today, some corporate bodies have adopted ‘appropriate’ local technology by using Trees along the major streets of urban Towns and Cities to publicize their products, instead of using the widely acknowledged and accepted use of Billboards for advertising. This unorthodox corporate practice is gradually gaining grounds in the country.
The country faces the risk of losing the trees which provide scenic beauty and protect human lives by removing emissions of carbon dioxide from the atmosphere.
Much as this strategy works, it has serious repercussion on the environment. Unfortunately, those who carry out the ‘Tree Billborads’ do it in a haphazard manner by cutting the tree branches to design their adverts. Our lives depend on the greens around us without which our survival is meaningless. Plants inhale carbon dioxide that has been exhaled by man coupled with other nutrients in the soil for survival. Likewise, man also breathes in oxygen exhaled by plants for survival.
Global climatic changes have resulted in heat waves from the scorching sun. The destruction of plant life is a contributing factor to this climatic phenomenon. The simple answer is that our environment is dying as a result of environmental degradation of which bad corporate practices are a major contributor.
Whilst some institutions, individuals and other cooperate bodies are spending millions of cedis to save the environment, others are also doing their very worst to destroy it.
Almost all the trees along the principal streets in the Cities and Towns have been branded with one advert or the other.
The trees along 1st Jawaharlah Neru road in Cantonments, Liberation circle, Castle road and some other streets in the Ministries area have not been spared this new craze of ‘Tree Billboards’. Some of the major Institutional Corporate Oraganisations that engage in this practice include the Telecom Companies, Banks, Breweries, Educational Institutions and Political Parties among others.
The City authorities have remained unconcerned about the menace. An overseer at the Accra Metropolitan Assembly (AMA), Timothy Oman, in an interview with the paper revealed that Pepsi-cola as part of its sponsorship deal for hosting the African cup of nations (CAN2008) resorted to branding all the trees in the metropolis, to advertise to its customers. “What you are witnessing is a paid for advert by Pepsi-cola. It is part of the company’s investment package for hosting the African Cup of Nations in the country”, he noted. When questioned whether this art of branding by Pepsi-cola does not pose any threat to the trees, he said “a committee was set up to see how best Pepsi-cola goes about with its adverts in the city, of which a member from the Department of Parks and Gardens was included. So if the branding exercise was going to have any damage to the trees, we would have been told’.
The branding of the trees has been done in a form of mini flags nailed to the trees along the streets. The environmental protection Agency (EPA) early this month stated that negative human activities had contributed immensely to climate change.
According to the Brong Ahafo regional Director of the EPA, Isaac Osei, climate change was a man-made global threat to the sustainability of life on earth, hence the need for attitudinal change to minimize the destruction of the environment.
Concerned with the impact of global warming as a result of climatic change, the Berekum Municipal Chief Executive, Kwabena Kyere-Yeboah cautioned Ghanaians to protect trees in their communities, since they (trees) protect human being in several ways.
The programme’s coordinator of friends of the Earth-Ghana, Noble Waadza in an interview with the paper noted that nailing of adverts on trees subject the trees to death.
According to him, the nail creates holes in the tree which makes it prone to bacteria infections and other diseases.
“A nail can bleed a tree to death if the sap runs out. The tree is just like the human being which needs to be protected. Any external force on it exposes it to danger.
Branding of the trees also takes away their value.
This bad corporate practice needs to stop. We need to preserve our environment because our lives depend on it”, he added.
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Wednesday, August 13, 2008
Kufuor swears in Kofi Annan into office
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The immediate past Secretary-General of the United Nations, His Excellency Kofi Annan, was on Monday officially inducted into office, as the new Chancellor of the University of Ghana, Legon.
He was sworn into office by the President of the Republic of Ghana, His Excellency John Agyekum Kufuor.
His elevation to the high office of Chancellor of the University came as a result of the vacuum created by the sudden death of Oyeeman Wereko Ampem II, who reigned as Chancellor of the University for seven years (1999-2005). Kofi Annan thus becomes the third Chancellor, in the history of the University, after Dr. Kwame Nkrumah, President of the First Republic of Ghana, and Oyeeman Wereko Ampem II, both of blessed memory.
As spelt in the University’s Constitution, Article 4, clause 7, makes H. E. Kofi Annan, the titular head of the University, and shall hold the office for a term of five years, of which he is eligible for appointment for another term only.
His new role makes him preside over congregations and ceremonies of the university.
As the Chancellor of the University, he takes precedence over all other members of the university, and is entitled to make representations to the Council, on matters relevant to the aims of the university, as set out in the act establishing the University.
President Kufuor, in his remarks after swearing in H. E. Kofi Annan into office, described him as a selfless son of Africa, who served the world with distinction, in his efforts to improve living standards, especially in the African continent.
“Kofi, you have served the world with distinction, and have returned home laden with many honours. Indeed, you have brought honour to Ghana. The accolade conferred on you today, can therefore be considered as a justifiable acknowledgement of your services to mankind. I am sure you will agree with me, that it is not too much for this institution to single you out, to assume this noble duty of Chancellor, in favour of your own country. I am confident that under your wise guidance, this university will achieve greater heights and shine even more,” he noted.
According to the President, the good conduct and hard work of Kofi Annan, makes him an exemplary role model for the youth to emulate, in order to attain greater heights in all fields of their endeavours.
President Kufuor believed that the former UN Secretary-General’s enthronement, to the enviable position of a Chancellor of the University, would further propel the university to greater heights.
He was sworn into office by the President of the Republic of Ghana, His Excellency John Agyekum Kufuor.
His elevation to the high office of Chancellor of the University came as a result of the vacuum created by the sudden death of Oyeeman Wereko Ampem II, who reigned as Chancellor of the University for seven years (1999-2005). Kofi Annan thus becomes the third Chancellor, in the history of the University, after Dr. Kwame Nkrumah, President of the First Republic of Ghana, and Oyeeman Wereko Ampem II, both of blessed memory.
As spelt in the University’s Constitution, Article 4, clause 7, makes H. E. Kofi Annan, the titular head of the University, and shall hold the office for a term of five years, of which he is eligible for appointment for another term only.
His new role makes him preside over congregations and ceremonies of the university.
As the Chancellor of the University, he takes precedence over all other members of the university, and is entitled to make representations to the Council, on matters relevant to the aims of the university, as set out in the act establishing the University.
President Kufuor, in his remarks after swearing in H. E. Kofi Annan into office, described him as a selfless son of Africa, who served the world with distinction, in his efforts to improve living standards, especially in the African continent.
“Kofi, you have served the world with distinction, and have returned home laden with many honours. Indeed, you have brought honour to Ghana. The accolade conferred on you today, can therefore be considered as a justifiable acknowledgement of your services to mankind. I am sure you will agree with me, that it is not too much for this institution to single you out, to assume this noble duty of Chancellor, in favour of your own country. I am confident that under your wise guidance, this university will achieve greater heights and shine even more,” he noted.
According to the President, the good conduct and hard work of Kofi Annan, makes him an exemplary role model for the youth to emulate, in order to attain greater heights in all fields of their endeavours.
President Kufuor believed that the former UN Secretary-General’s enthronement, to the enviable position of a Chancellor of the University, would further propel the university to greater heights.
Friday, July 25, 2008
Banking Industry Sees Growth in Assets
The banking industry of the country has witnessed massive development in its assets, recording a 4.4 per cent growth at the end of March 2008.
Total assets of the banking industry recorded GH¢8,437.7 million in May this year, compared to GH¢6,156.6 million of the previous year.
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The banking industry has over the period, shifted their attention from investing in financial assets, to lending to the private sector, a situation the Governor of the Bank of Ghana, Dr. Paul Acquah, says has resulted in the decline of assets invested in government securities.
According to the Governor, since the abolishing of the secondary reserve requirements in the country, the banking industry's investments in government securities had declined from 15.6 per cent in May 2007, to 1.6 per cent in May this year.
This, he said, was mainly funded by deposits, which amounted to GH¢5,499.4 million, representing a growth of 3.3 per cent over the level recorded in March 2008.
This feat, by the banking industry, represents an annual growth of 38.5 per cent. Savings and Time deposits increased by 37.0 per cent, to GH¢2,004.9 million in the twelve month period to May 2008, compared with GH¢1,463.0 million, representing 54.5 percent for the same period, in the previous year (2007).
The Governor of the Central Bank further noted that foreign currency deposits, also increased by 33.2 per cent, to the equivalent of GH¢1,273.9 million in the twelve month period to May 2008, compared with GH¢955.3 million, representing 32.9 per cent recorded for the same period, in the year 2007.
That notwithstanding, the banking industry's loan portfolio remained strong, whilst Non-Performing Loans (NPL), which stood at 8.7 per cent at the end of March 2008, inched up to 8.8 percent at the end of May 2008.
Total assets of the banking industry recorded GH¢8,437.7 million in May this year, compared to GH¢6,156.6 million of the previous year.
GA_googleFillSlot("AllAfrica_Story_Inset");
The banking industry has over the period, shifted their attention from investing in financial assets, to lending to the private sector, a situation the Governor of the Bank of Ghana, Dr. Paul Acquah, says has resulted in the decline of assets invested in government securities.
According to the Governor, since the abolishing of the secondary reserve requirements in the country, the banking industry's investments in government securities had declined from 15.6 per cent in May 2007, to 1.6 per cent in May this year.
This, he said, was mainly funded by deposits, which amounted to GH¢5,499.4 million, representing a growth of 3.3 per cent over the level recorded in March 2008.
This feat, by the banking industry, represents an annual growth of 38.5 per cent. Savings and Time deposits increased by 37.0 per cent, to GH¢2,004.9 million in the twelve month period to May 2008, compared with GH¢1,463.0 million, representing 54.5 percent for the same period, in the previous year (2007).
The Governor of the Central Bank further noted that foreign currency deposits, also increased by 33.2 per cent, to the equivalent of GH¢1,273.9 million in the twelve month period to May 2008, compared with GH¢955.3 million, representing 32.9 per cent recorded for the same period, in the year 2007.
That notwithstanding, the banking industry's loan portfolio remained strong, whilst Non-Performing Loans (NPL), which stood at 8.7 per cent at the end of March 2008, inched up to 8.8 percent at the end of May 2008.
Public Debt Shoots Up to $7.8 Billion
At the end of the month of June 2008, Ghana's total public debt stood at US$7.8 billion, from an initial amount of almost US$7.3 billion, at the beginning of the year.
This represents an increase of 7.1 per cent, over the period of six months. The stock of domestic debt, which stood at GH¢3,708.2 million, representing 26.5 per cent of Gross Domestic Product (GDP), at the end of the previous year (2007), increased to GH¢4,005.9 million, representing 24.6 per cent of GDP, at the end of the June this year (2008).
At a press briefing in Accra on Monday, the Governor of the Bank of Ghana, Dr. Paul Acquah, said the country's debt stand was not rising, as compared to a budget ceiling of 60 per cent of GDP. Meanwhile, the country's external debt, increased from US$3,590.4 million, in the month of June 2008, from 24.9 percent of GDP, to US$3,809.3 million, representing 24.1 per cent of GDP. This brings the total public debt stock of the country, to 48.7 per cent of GDP, by the end of the first half of the year.
This represents an increase of 7.1 per cent, over the period of six months. The stock of domestic debt, which stood at GH¢3,708.2 million, representing 26.5 per cent of Gross Domestic Product (GDP), at the end of the previous year (2007), increased to GH¢4,005.9 million, representing 24.6 per cent of GDP, at the end of the June this year (2008).
At a press briefing in Accra on Monday, the Governor of the Bank of Ghana, Dr. Paul Acquah, said the country's debt stand was not rising, as compared to a budget ceiling of 60 per cent of GDP. Meanwhile, the country's external debt, increased from US$3,590.4 million, in the month of June 2008, from 24.9 percent of GDP, to US$3,809.3 million, representing 24.1 per cent of GDP. This brings the total public debt stock of the country, to 48.7 per cent of GDP, by the end of the first half of the year.
Friday, July 18, 2008
Combating Environmental Degradation
On May 1,1998, many organizations including the World Resources Institute (WRI), United Nations Environmental Programme (UNEP), United Nations Development Programme (UNDP) and the World Bank made public an important report on health and the environment sighting how the activities of man has contributed to the degradation of the environment and how the situation can be rectified.
In spite of these campaigns, it is quite disheartening that people are still degrading the environment to the suffering of the mass. Environmental degradation is the deterioration of the environment through depletion of resources such as air, water and soil, the destruction of the ecosystems and the extinction of wildlife.
The landmark report of the World Commission on Environment and Development, entitled "Our Common Future", warned that unless we change many of our lifestyle patterns, the world will face unacceptable levels of environmental damage and human suffering.
The Commission, echoing the urgent need for tailoring the pace and the pattern of global economic growth to the planet's carrying capacity, said that: "Humanity has the ability to make development sustainable and to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs."
In the final analysis, the environmental crisis affects everyone on the planet, but the degree to which the inhabitants of different parts of the world contribute to this crisis depends on the level of their economic development and their consumption patterns.
As much as 70% of the world's consumption of fossil fuel and 85% of chemical products is attributable to 25% of the world's population. Water consumption is also unevenly distributed. Consumption of water in developing countries ranges between 20 to 40 m_.
The consumption patterns for forest products and many other commodities have the same direct inverse proportion to the size of population of the top 20% of the richest societies. This wasteful demand puts excessive pressure on both national and global natural resources.
The rest of the world, comprising 80% of its population with a share of less than 20% of global income, has a far more modest consumption level.
While international environmental concerns are often expressed in broad terms such a desertification or climatic change, the environmental problems of concern to vulnerable groups in marginal areas are generally quite localized in nature, revolving around immediate issues, such as the degradation of a particular rangeland or soil erosion on farmland or the progressive shortening of fallow. These affect the poor because they are directly related to household food security. Degradation of the resource base generally translates into decreases in production or income and thus in the availability of food.
Declining soil fertility leads to lower crop yields while rangeland depletion reduces offtake, and any deterioration in water quality adversely affects the fish catch.
Degradation of common property resources pulls labour away from directly productive activities towards gathering - simply collecting non-wood and minor forest products - and probably diminishes opportunities for deriving income from this source.
Linkages with food security can also be less direct. Shortages of biomass may result in a transition to lower-nutrition foods that require less fuel for cooking. In addition, recurrent drought or natural calamities also directly result in progressive loss of food security prospects.
In their quest for food security, the rural poor have sometimes little choice but to overuse the limited resources available to them. The resulting environmental degradation imposes further constraints on their livelihood in what has been called a "downward spiral" or "vicious circle".
They are often forced to make trade-offs between immediate household food requirements and environmental sustainability both in production and consumption. Their negligible man-made capital assets, ill-defined or non-existent property rights, limited access to financial services and other markets, inadequate safety nets in time of stress or disaster, and lack of participation in decision-making can result in their adopting "short time horizons", which favour immediate imperatives over longer-term objectives.
This can result in coping strategies that rely on the drawing down of the capital available to them, mainly in the form of natural resources. It also makes them more vulnerable to environmental degradation, including degradation wrought by others than the poor themselves.
The poor may be both agents and victims of environmental degradation, especially in marginal areas, where the resource base is ill-suited to agriculture. But it cannot be assumed that the poor have an intrinsic propensity to degrade environmental resources. On the contrary, many poor traditional communities demonstrate an admirable environmental ethic and have developed complex resource management regimes.
In spite of these campaigns, it is quite disheartening that people are still degrading the environment to the suffering of the mass. Environmental degradation is the deterioration of the environment through depletion of resources such as air, water and soil, the destruction of the ecosystems and the extinction of wildlife.
The landmark report of the World Commission on Environment and Development, entitled "Our Common Future", warned that unless we change many of our lifestyle patterns, the world will face unacceptable levels of environmental damage and human suffering.
The Commission, echoing the urgent need for tailoring the pace and the pattern of global economic growth to the planet's carrying capacity, said that: "Humanity has the ability to make development sustainable and to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs."
In the final analysis, the environmental crisis affects everyone on the planet, but the degree to which the inhabitants of different parts of the world contribute to this crisis depends on the level of their economic development and their consumption patterns.
As much as 70% of the world's consumption of fossil fuel and 85% of chemical products is attributable to 25% of the world's population. Water consumption is also unevenly distributed. Consumption of water in developing countries ranges between 20 to 40 m_.
The consumption patterns for forest products and many other commodities have the same direct inverse proportion to the size of population of the top 20% of the richest societies. This wasteful demand puts excessive pressure on both national and global natural resources.
The rest of the world, comprising 80% of its population with a share of less than 20% of global income, has a far more modest consumption level.
While international environmental concerns are often expressed in broad terms such a desertification or climatic change, the environmental problems of concern to vulnerable groups in marginal areas are generally quite localized in nature, revolving around immediate issues, such as the degradation of a particular rangeland or soil erosion on farmland or the progressive shortening of fallow. These affect the poor because they are directly related to household food security. Degradation of the resource base generally translates into decreases in production or income and thus in the availability of food.
Declining soil fertility leads to lower crop yields while rangeland depletion reduces offtake, and any deterioration in water quality adversely affects the fish catch.
Degradation of common property resources pulls labour away from directly productive activities towards gathering - simply collecting non-wood and minor forest products - and probably diminishes opportunities for deriving income from this source.
Linkages with food security can also be less direct. Shortages of biomass may result in a transition to lower-nutrition foods that require less fuel for cooking. In addition, recurrent drought or natural calamities also directly result in progressive loss of food security prospects.
In their quest for food security, the rural poor have sometimes little choice but to overuse the limited resources available to them. The resulting environmental degradation imposes further constraints on their livelihood in what has been called a "downward spiral" or "vicious circle".
They are often forced to make trade-offs between immediate household food requirements and environmental sustainability both in production and consumption. Their negligible man-made capital assets, ill-defined or non-existent property rights, limited access to financial services and other markets, inadequate safety nets in time of stress or disaster, and lack of participation in decision-making can result in their adopting "short time horizons", which favour immediate imperatives over longer-term objectives.
This can result in coping strategies that rely on the drawing down of the capital available to them, mainly in the form of natural resources. It also makes them more vulnerable to environmental degradation, including degradation wrought by others than the poor themselves.
The poor may be both agents and victims of environmental degradation, especially in marginal areas, where the resource base is ill-suited to agriculture. But it cannot be assumed that the poor have an intrinsic propensity to degrade environmental resources. On the contrary, many poor traditional communities demonstrate an admirable environmental ethic and have developed complex resource management regimes.
Tuesday, July 15, 2008
French government lauds implementation of GPRS in Ghana
French gov’t lauds implementation of GPRS
The French government on Monday lauded the government of Ghana for its role played in the implementation of the Growth and Poverty Reduction Strategy (GPRS) to improve living conditions in the country.
The French government has been supportive in this initiative spearheaded by the government of Ghana in order to attain a middle income status by the year 2015.
The Deputy Resident Manager Yves Guicquero in an interview with the paper at the residence of the French Ambassador in Accra said his government was satisfied with the implementation of the GPRS and the level of development in the country.
He was optimistic that the country’s priority of attaining a middle income status was on course.
“My government is satisfied with the implementation of the GPRS towards improving living conditions in the country. We believe that Ghana would be the first country in Sub-Sahara Africa to reach a middle income status”, he said.
The French government through its multi donor support agency, French Development Agency (AFD), has over the years contributed significantly towards the GPRS.
The French co-operation in the country has increased significantly in the recent past to reach an average amount of €42million over the past four years.
According to Guicquero, his government has been contributing €17million into water and sanitation projects in the country each year.
He noted that after successful execution of the rural water projects in Northern Region, his government had plans to do same in the Brong Ahafo Region beginning next year (2009).
“We have plans to fund a new rural and semi-urban water project in the Brong Ahafo Region. This project would begin in the early months of next year. Once the Brong Ahafo project is completed, we would consider elsewhere”, he added.
The French government has over the past years being supportive to the country’s economy, providing assistance to the Private sector. It has financed investment projects in eight companies operating mainly in export oriented sectors of the economy.
It also set up a strong partnership with the banking sector by providing medium term lines of credit to finance the investment projects of Small and Medium sized Enterprises in the country. The French government has also been supportive in the Agriculture sector as well as the promotion of cultural diversity in the country.
The French government on Monday lauded the government of Ghana for its role played in the implementation of the Growth and Poverty Reduction Strategy (GPRS) to improve living conditions in the country.
The French government has been supportive in this initiative spearheaded by the government of Ghana in order to attain a middle income status by the year 2015.
The Deputy Resident Manager Yves Guicquero in an interview with the paper at the residence of the French Ambassador in Accra said his government was satisfied with the implementation of the GPRS and the level of development in the country.
He was optimistic that the country’s priority of attaining a middle income status was on course.
“My government is satisfied with the implementation of the GPRS towards improving living conditions in the country. We believe that Ghana would be the first country in Sub-Sahara Africa to reach a middle income status”, he said.
The French government through its multi donor support agency, French Development Agency (AFD), has over the years contributed significantly towards the GPRS.
The French co-operation in the country has increased significantly in the recent past to reach an average amount of €42million over the past four years.
According to Guicquero, his government has been contributing €17million into water and sanitation projects in the country each year.
He noted that after successful execution of the rural water projects in Northern Region, his government had plans to do same in the Brong Ahafo Region beginning next year (2009).
“We have plans to fund a new rural and semi-urban water project in the Brong Ahafo Region. This project would begin in the early months of next year. Once the Brong Ahafo project is completed, we would consider elsewhere”, he added.
The French government has over the past years being supportive to the country’s economy, providing assistance to the Private sector. It has financed investment projects in eight companies operating mainly in export oriented sectors of the economy.
It also set up a strong partnership with the banking sector by providing medium term lines of credit to finance the investment projects of Small and Medium sized Enterprises in the country. The French government has also been supportive in the Agriculture sector as well as the promotion of cultural diversity in the country.
AngloGold Ashanti to inject $174.4m in Obuasi mine
…but faces threat to fold up if new electricity tariff remains
Anglogold Ashanti Company Limited is set to inject US$174.4million in its operations in the Obuasi mine in the Ashanti Region of Ghana.
The investment volume is aimed at expanding and modernising the mine which forms part of the company’s turn around strategy to transform the mine into a world class category.
Out of the initial amount, $44.4million has been earmarked for the modernization and expansion project with the remaining $130million for capital consideration.
The company has however given indications that if government continues to stick to intention to increase power tariff by 100% on mining, steel and high voltage consuming companies, the transformation of the Obuasi mine project may not be a reality.
“Currently Obuasi mine is a loss entity because we don’t gain from the spot because of the hedge and cost of production in the country. Government should look at the situation which Obuasi is going through and review its policy towards the new power tariff”, said Anglogold Ashanti’s General Manager for Corporate and Community Relations, John Owusu in an interview with the paper in Accra over the weekend.
For him, “the situation is a delicate one, but the fact on the ground is that even at about $0.9cent per kilowatt per hour, power tariff is breaking our neck, we don’t have cash flow to talk about. So additional power cost will turn our cost structure and new projects asunder.”
As part of its full cost recovery programme, government announced a Bulk Generation Tariff of Gp 16.91 per kilowatt an hour for mining firms, steel mills and other high voltage consumers.
This translates into an End User Tariff of Gp 22.31per kilowatt per hour with immediate effect from July 1st, 2008.
This announcement did not go down well with the mining firms and thus resorted in series of discussions and deliberations on the issue with the Ghana Chamber of Mines, regulator of mining firms in the country.
According to John Owusu, Anglogold Ashanti is still talking to government on the issue and hopes something good would come out of it.
“Thanks to the government, the mining industry is talking to the Volta River Authority and other parties concerned, through the Ghana Chamber of Mines. We hope something good and acceptable to all parties will come out of these meetings in the near future”, he said.
Since the announcement of this increment by government, several companies including RedBack Mining Incorporated, operating in Ghana as Chirano Gold Mine have had cause to complain about its hefty implications on their operations.
Anglogold’s Obuasi underground gold mine is one of the richest in the world but the current gold rally on the market of $410 per ounce in 2004 to $900 plus this year, has led to a sudden decline in production and faces a challenge of folding up if the new power tariff announced by the government remains un-reviewed.
Since the year 2004 to date, Anglogold Ashanti has invested $220million in the Obuasi mine but its operations have not been successful due to cost of production which keeps increasing year after year, according to John Owusu.
Employees of the company (7,200) are likely to be affected if the company folds up.
This also has the tendency of affecting annual dividends paid to government.
Anglogold Ashanti Company Limited is set to inject US$174.4million in its operations in the Obuasi mine in the Ashanti Region of Ghana.
The investment volume is aimed at expanding and modernising the mine which forms part of the company’s turn around strategy to transform the mine into a world class category.
Out of the initial amount, $44.4million has been earmarked for the modernization and expansion project with the remaining $130million for capital consideration.
The company has however given indications that if government continues to stick to intention to increase power tariff by 100% on mining, steel and high voltage consuming companies, the transformation of the Obuasi mine project may not be a reality.
“Currently Obuasi mine is a loss entity because we don’t gain from the spot because of the hedge and cost of production in the country. Government should look at the situation which Obuasi is going through and review its policy towards the new power tariff”, said Anglogold Ashanti’s General Manager for Corporate and Community Relations, John Owusu in an interview with the paper in Accra over the weekend.
For him, “the situation is a delicate one, but the fact on the ground is that even at about $0.9cent per kilowatt per hour, power tariff is breaking our neck, we don’t have cash flow to talk about. So additional power cost will turn our cost structure and new projects asunder.”
As part of its full cost recovery programme, government announced a Bulk Generation Tariff of Gp 16.91 per kilowatt an hour for mining firms, steel mills and other high voltage consumers.
This translates into an End User Tariff of Gp 22.31per kilowatt per hour with immediate effect from July 1st, 2008.
This announcement did not go down well with the mining firms and thus resorted in series of discussions and deliberations on the issue with the Ghana Chamber of Mines, regulator of mining firms in the country.
According to John Owusu, Anglogold Ashanti is still talking to government on the issue and hopes something good would come out of it.
“Thanks to the government, the mining industry is talking to the Volta River Authority and other parties concerned, through the Ghana Chamber of Mines. We hope something good and acceptable to all parties will come out of these meetings in the near future”, he said.
Since the announcement of this increment by government, several companies including RedBack Mining Incorporated, operating in Ghana as Chirano Gold Mine have had cause to complain about its hefty implications on their operations.
Anglogold’s Obuasi underground gold mine is one of the richest in the world but the current gold rally on the market of $410 per ounce in 2004 to $900 plus this year, has led to a sudden decline in production and faces a challenge of folding up if the new power tariff announced by the government remains un-reviewed.
Since the year 2004 to date, Anglogold Ashanti has invested $220million in the Obuasi mine but its operations have not been successful due to cost of production which keeps increasing year after year, according to John Owusu.
Employees of the company (7,200) are likely to be affected if the company folds up.
This also has the tendency of affecting annual dividends paid to government.
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