Gold Fields Ghana Limited (GFGL) has made a public statement in newspaper publications such as the Daily Guide captioned “Tarkwa Mine Begins Transition to Contract Mining” (Daily Guide of 12th March, 2018).
The referenced publication stated that, “Gold Fields Ghana Limited (GFGL) has formally begun the transition from owner mining to contract at its Tarkwa gold mine.”
It is important to place the discussion of the current decision of GFGL to change from owner mining to contract mining and the industrial impasse between the company and the Ghana Mine Workers Union(GMWU) in a historical perspective.
GFGL’s interest in the then Tarkwa Goldfields Limited(TGL) which was an underground mine and a subsidiary of the State Gold Mining Corporation(SGMC) started when Gold Fields South Africa had related with Tarkwa Goldfields Limited on a management contract arrangement from 1993 to 1994 after which Gold Fields South Africa purchased the Tarkwa Goldfields Limited in 1995 and renamed the mine, Gold Fields Ghana Limited.
Gold Fields South Africa purchased the Tarkwa Goldfields Limited underground mine in 1995 for a paltry US $3 million and that gave the South African company access to the large concession of the Tarkwa Goldfields Limited (TGL) of about 280 km2 land.
The sale of the mine for US $3 million was shortly after the government had secured a loan of $35 million Canadian Dollars which was invested in the underground mine.
By the acquisition of TGL, Goldfields South Africa gained additional properties of the state-owned Tarkwa Goldfields Limited (TGL) including housing estates for workers such as Tamso estate, Green Compound estate, Aboso estate and many bungalows for middle level management staff and senior managers.
The new company Gold Fields Ghana Limited operated as an underground mine alongside surface mining operations for a few years. The company took a decision to close down the underground mining operations in July 1999 and many workers especially underground workers lost their jobs despite the fact that the operations of the underground mining was the justification for the generous terms of the agreement of the Gold Fields Ghana Limited to attract the company to revamp the underground mine for job creation.
The agreement of Gold Fields Ghana Limited can be likened to “Buy one get three free”.
Beyond these freebies for the survival of the company is the generous fiscal regime which was associated with the Development Agreement granted to Gold Fields Ghana Limited recently which provided the company the opportunity to negotiate high retention of foreign revenues, reduced corporate taxes, among others.
Above all GFGL had the opportunity to reap windfall profits in the period when the price of gold skyrocketed around $ 2,000 per ounce. Unfortunately, our country’s inability to take advantage of the high gold price to institute windfall profit tax in the fiscal regime for mining helped companies like GFGL to repatriate high profits to the home countries of the multinational mining companies