Save the Bogoso Prestea mine, act now
The Ministry of Lands and Natural Resources, the Minerals Commission, and Environmental Protection Agency seem not to have been clever enough for the past 15 months, to decipher the grand scheme of GSR, FGR and Blue International Holdings.
This scheme by the foreign companies aimed to rid Ghana of our gold revenues and leave behind the debt of environmental remediation costs, while profiting enormously from the nation’s gold resources.
These government institutions will surely fail woefully if these predictions from me as a local citizen in the Wassa community comes to pass while they sit in Accra with all the resources and are unable to avert this occurrence that will leave the Wassa communities poorer and with devastated environmental impacts.
I am Kwame Tawiah Ansah, a loyal citizen of the Wassa Community and an advocate for the rights of my people.
We recall a publication on November 9, 2020, (Sale of Bogoso-Prestea Mine: Golden Star Resources’ plan to revert US$53m rehabilitation liability to gov’t – The Business & Financial Times (thebftonline.com) and that of March 24, 2021 (BOGOSO PRESTEA MINE SOON TO BE IN CRISIS – GOVERNMENT MUST INTERVENE | KINGDOM FM ONLINE), where the Community in Prestea Bogoso pleaded and petitioned the Government to intervene in the Bogoso Prestea Mine sale due to inherent risks the deal posed to Ghanaian employees and the micro-economy of Prestea Huni-Valley Municipality.
The mining community stated that the sale was bizarre and that the new owner, Future Global Resources (FGR) which is a non-listed, privately owned 11-month-old mining company with no mining history and background, is a special purpose vehicle for a dubious scheme by Golden Star Resources (GSR).
The community reiterated that FGR is not in for the investment and expansion of the mine and till today, indeed FGR and Blue International have not invested a single dollar in the mine. Indeed, FGR can liquidate with any little business stress without losing anything.
The community further exposed the grand scheme of GSR and FGR-Blue which makes Ghanaians worse off, and profits foreigners enormously and expected the Government to initiate a due diligence process to rectify and avert the eminent risk to employees and the community.
Government, the Ministry of Lands and Natural Resources, Minerals Commission and the EPA seem to have not taken any tangible steps to correct this process and as at today over 120 Ghanaian mine workers have lost their jobs and with the mine being in serious debt to contractors, and land remediation debt of over 53 million US dollar still pending.
There were even threats of dismissal of additional 200 workers which led to almost a one-week demonstration of workers in November 2021. This threat is still eminent to these Ghanaian workers as the foreign operator has no proven intent to expand the mine.
The actual cause of the occurrences is strongly attributed to FGR and Blue International Holdings’ (current controllers of Bogoso Prestea Mine) inability to invest in the development and expansion of the mine as predicted and hence would lay Ghanaian workers off and pay themselves as foreigners using the Ghanaian resources.
For 15 months now since FGR and Blue International took over in October 2020, the foreigners have not invested a single dollar in the mine development and expansion contrary to mining investment policies and protocols of Ghana, yet their permits for operating which have expired several times, have been renewed several times by the Minerals Commission and the EPA.
It is obvious that the financial gains and interest of the leadership of these government institutions are more important to them than the masses who are losing their jobs and the collapse of the mine.
People who are trusted with the institutional mandate tend to choose their individual private gains over the masses of Ghanaian workers instead of protecting the Ghanaian worker and the mining industry from dubious actions of dubious foreign business operators of the likes of GSR, FGR and Blue International Holdings.
The Grand Scheme – Profit Maximisation at the expense Mine Development
GSR acquired the Bogoso Prestea Mine in 1999. In 2002, the Bogoso Mine made good profit, invested in Ghana and purchased the Satellite Gold Mine at Wassa Akyempim, which was renamed as Wexford and later named Golden Star Wassa Limited.
GSR then operated these two major mines (Wassa Mine and Bogoso Mine) in Ghana. The two mines operated concurrently with support to each other in the areas of finance and labour.
During the third quarter of 2018, LaMancha Investment Group bought majority shares (30%) and became the major shareholder of GSR at a time when Bogoso Prestea Mine was struggling to get a positive cash flow while its sister Wassa Mine was making a good profit and supporting the Bogoso Prestea operations.
On the record, Bogoso Prestea Mine had supported Wassa Mine between 2014-2016 when it was in negative cash flow until 2018 when the Wassa production experienced positive cash flow. In 2019, LaMancha appointed the then CEO of LaMancha, Mr. Andrew Wray as CEO of GSR.
On assuming office as the CEO of GSR, Mr. Andrew Wray culled the old GSR executive team and replaced them with a new team predominantly from the LaMancha group. About 80% of all investment announcements made after the third quarter of 2018 by GSR was used to repackage the Wassa Mine.
Six months after assuming office, Mr. Andrew Wray – the CEO, indicated that the Bogoso Prestea Mine was on a negative cash flow and hence impacting the entire GSR business cash flow; meanwhile, the same CEO directed most capital investments to the Wassa Mine.
On 27th July 2020, and in about two years since LaMancha took over the control of GSR, the CEO announced the preconceived ultimate pre-acquisition plan of the sale of Bogoso Prestea Mine – and to no other mining firm but a fly-by-night company formed 8-months prior with no mining experience anywhere in the world.
FGR took over the Bogoso Prestea operations on October 1, 2020 and for the past 15 months have not declared their investment plans and committed any money for the expansion of the operations but have rather been shrinking the operation.
Meanwhile, various foreigners and foreign executives on the ticket of FGR and now Blue International Holdings have been (and continue to be) paid for the past 15 months from the gold proceeds from the Mine. During the last 15 months, the debts of the company to local contractors and businesses appear to have continued to increase.
For example, we have observed in the community the cessation of fuel trucks delivering fuel to the company, and an increase in complaints of non-payment for services rendered by many local businesses and contractors. FGR and Blue International are evidently therefore not paying down any debts they inherited after taking control of the mine. It is certain these are not people who are here for our good.
LaMancha, controller of GSR have always had short term dubious business plans (maximum of 3 years) aimed at profiting enormously at the expense of the countries in which they operate here in Africa. Mining investments in Ghana have been known to be on long-term bases and aimed at developing and expanding mining operations.
The business style of LaMancha was unnoticed initially by the Minerals Commission which could be pardoned. The unfolding events however by LaMancha since they came to Ghana and hence GSR for the past three years for which various alerts were given to Government and the mining sector institutions required an intervention which the institutions failed to make.
LaMancha came to Ghana to take control of the GSR group in 2018 with US$127 million promising to support and propel the GSR ambition of becoming a leading African gold producer (La Mancha enters into strategic partnerhsip with Africa’s Golden Star with $127 million investment (miningglobal.com).
About 80% of the investment was used to repackage the Wassa Operations which was already making profit and with no significant development and expansion of the Bogoso/Prestea Mine.
Two years after taking controllership of GSR, LaMancha sells the Bogoso/Prestea Asset to Future Global Resources, which was then 8 months old and had no prior experience in mining, in a bizarre manner through a supposed staged payment –
- US$5million of cash is payable on the earliest (i) date at which FGR puts in place a new reclamation bond with the Environmental Protection Agency of Ghana, or (ii) March 30, 2021;
- US$10million of cash is payable on July 31, 2021;
- Approximately US$4million of cash for the net working capital adjusted balancing payment is payable on July 31, 2021; and
- US$15million of cash is payable on July 31, 2023.”
- Contingent payment of $20 to $40 million upon the mining of refractory ore
None of these staged payments has ever been fulfilled by FGR and Blue International to GSR, yet FGR continues to operate with no pressure from GSR. Meanwhile, government institutions continue to grant permit extensions for FGR to operate when FGR has shown no intent of investing in the future of the mine.
A year after the Bogoso Prestea Mine was sold, GSR announces the sale of Wassa Mine for a whooping US$470 million to another foreign company and thus have literally made away with US$343 million within 3 years without investing in the progress of the Ghanaian Mines. (Golden Star agrees US$470m deal to sell its operations to Chifeng Jilong (thebftonline.com).
This sale by the way is a complete flip of the public assurances to the Ghanaian public given by Mr Andrew Wray as CEO in several interviews with the media that GSR was here to stay and never selling to another entity. Our institutions watch and by their acts have supported the draining of the country of its precious resources and impoverishing of Ghanaian workers through layoffs.
It is important for readers to note that the position is not against foreign investors coming into our mining sector. Even though they are not perfect, companies like Goldfields, Newmont and AngloGold have been with us in Ghana for ages and have made significant contributions to the local communities and the country’s economy.
What we would not tolerate however is a group of supposed investors who come into our country, make promises of investing in our mineral and natural resources sector, use the promises to buy our support, then turn around to use some of our own people to help them cut corners and then leave the people in our communities and the country worse off.
If anyone has done an economic impact assessment on a per ounce of gold extracted basis, it would be self-evident that the net benefit to the country stemming from the day we welcomed GSR, FGR and Blue International into our country has been negative.
Let’s be realistic, even companies investing in the renewable resource sectors of our country such as those in agribusiness are investing millions in the country and expanding to employ more Ghanaians.
The recent commissioning of the expanded processing facility of Cargill Limited in Tema by the President for example comes to mind. We certainly must have higher standards for investment impact for those participating in the non-renewable resources sector of Ghana.
Medium to large scale mining in Ghana is not a business for neophytes. Even our artisanal and small-scale miners are employing the Ghanaian people and stimulating local economies.
Our mineral resources must be reserved for experienced, well reputed, and serious local or multinational miners only.
Mining Sector Institutions Failed
The mining sector institutions i.e., Minerals Commission, EPA and the Ministry of Lands and Natural Resources seem to have failed woefully in this game plan or peradventure the leadership have been compensated enough to gloss over this deal while the nation gets swindled by foreigners and collapse the few jobs already in the country, not forgetting the taxes and revenue that government could have accrued should these operations expand and operate with long term plans.
To date, and for 15 months now, no pragmatic effort has been seen from these institutions to arrest the situation. The Government machinery intended to protect jobs is now rather superintending over job losses and duping of the country by foreigners because of possible individual benefit and private gains.
Gains from the GSR Dubious Scheme
FGR following the takeover of the Bogoso Prestea Mine have made various investment promises to the Minerals Commission, to revamp the Bogoso Prestea Mine and yet have still not invested a penny on the mine having operated for over 15 months, (FGR failed to invest even a ‘penny’ in Prestea-Bogoso mine; lacks funds — Minerals Commission | Business (classfmonline.com), they however have strategically structured the operations to be paying their foreign employees and directors, sponsor other projects in other countries in the disguise of Blue International Holdings Group Operations and are now laying off Ghanaian workers.
Reason being that they intend not to stay in Ghana and there is no need to invest but rather maximize gains. In this grand scheme implemented by GSR under the watch of the mining sector institutions, GSR makes a profit of US$343 million dollar within three years without developing and expanding any mine in Ghana but by ditching the Bogoso Prestea mine and packaging Wassa Mine for sale; FGR, a special purpose vehicle formed by GSR after one year of operation, take over Bogoso Prestea Mine, operate it without any investment for development and expansion, and abandon same when the time is due with the reason that the mine is not profitable thereby relinquishing all liabilities, debt to Ghanaian contractors/suppliers and debt to Government institutions, back to the state.
FGR and Blue International Holdings gain by paying their enlarged number of executives and directors at the group level while Blue International Holdings specifically gains by using revenue from the gold mining operations to sponsor other projects that are outside Ghana.
As Blue Holdings Group prepare for the financial close of the Bumbuna II Project in Sierra Leone, (https://blueinternational.com/news/bluegroup), overhead cost of executive’s remuneration will solely be borne by Bogoso Prestea mine operations swelling the mine operations cost and presenting potential loss of Ghanaian jobs and attendant replacement with foreigners under the guise of organisational restructuring.
What is the gain in this grand scheme for Ghana – no gains but loss of employment for citizens and debts which are into millions of dollars transferred to local businesses and the state.
Sadly, the mining sector regulatory institutions have superintended all these transactions for over the last 15 months while the Bogoso Prestea Mine is on the verge of collapse and the Wassa Mine has now also been sold. GSR, FGR and Blue International Holdings will soon leave the shores of Ghana to share their booty of over US$343 million.
Bogoso Prestea Community Outcry
For how long should the Bogoso Prestea Community petition the Government and yet the Government turns a deaf ear to these petitions? In November 2020 and March 2021, I alerted the Government publicly, of this dubious deal by GSR and the threat to the Wassa community, in terms of the potential layoff of workers and collapse of the mine, yet the Government did not act.
Today, this has caused over 120 Ghanaians their jobs and impoverished their families to the extent that, the company, FGR even owes persons who have been laid off their full entitlements in many cases. For how long would Ghanaians be enslaved on their lands while foreigners nourish from the gold resources?
I have analysed the occurrences; I have seen the happenings and can predict for certainty that Bogoso Prestea mine will not see the end of 2022 if government institutions don’t act responsibly to ensure appropriate investment or investors for the mine.
Any calamity on the Bogoso Prestea mine in 2022, and the impoverishment of the Wassa Community will be on the heads of Minerals Commission, the EPA, and the Minister of Lands and Natural Resources for their collective failure to act and perhaps due to the leadership’s individual gains at the expense of the masses.
The President requested all to be Citizens, and the leadership of Government Institutions must demonstrate the same love for the country and not suck the blood of the innocent by virtue of being in public offices.
#Save the Bogoso Prestea Mine, Act Now#.
- Hon Samuel A. Jinapor (Sector Minister),
- Martin Ayisi (CEO, Minerals Commission),
- Dr. Henry Kokofu (Executive Director, EPA).
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