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Ministry of Petroleum and Energy
23rd June 2020
Press Briefing
The attention of the Ministry of Petroleum and Energy (MoPE) has been drawn to a report published by Mustapha K. Darboe on the Gambian media outlet called Malagen online newspaper, on 13th June 2020, captioned: “Gov’t, GACH and Mining for minerals: Where are the $ millions.”
The purpose of this press briefing is to make some clarifications to the mining activities, especially the black sand commonly called Heavy Mineral Concentrate (HMC). The components of the HMC are Ilmenite, Rutile and Zircon, which are minable that occur in the coastal beach complex (the ancient beach) at Batokunku, Sanyang and Kartong. These minerals were first mapped by COOPER of the Gold Coast Geological Survey (now Ghana Geological Survey) in 1935. Several other studies of the deposit were undertaken under the auspices of Geological Unit (now Geological Department). These studies detailed the chemical and mineralogical composition of the deposits as well as the volumetric analyses.
The HMC deposits were subjected to brief mining between 1956 to 1959 by Gambia Minerals Ltd, a subsidiary of the British Titan products (60,000 MT est). Other mining activities of the deposit took place by Carnegie Minerals 2005 – 2008 (43,415 MT), GAMICO 2008 – 2015 (189,982 MT) and APAM 2015 – 2016 (5649 MT). Currently, GACH is mining the HMC and has exported 15,386 MT from October 2017 to June 2020.
The Ministry wishes to clarify that the article is false and misleading especially on the part of the Geological Department and GACH Mining Company’s operation following the granting of the Licence. Carnegie Minerals Gambia Ltd (CMG), GAMICO and APAM conducted mining operations within the same licensed area, which covers an area of 3.77Km2 following detailed Environmental Impact Assessment by CMG.
It is important to set the record straight that GACH mining company as the holder of a mining licence for the purpose of mining HMC along the coastal area of The Gambia, acquired the license through a competitive process with Golden Earth Gambia Ltd. The GACH licence was processed in accordance with the provisions of the Mines and Quarries Act 2005. Among the list of applicants, GACH Company had a better offer of 60% for royalty payment to the Government in comparison to Golden Earth Company Limited which offered 50% to the government. Comparatively, the royalty payment by GACH is also better than than APAM and GAMICO that previously mined the HMC under the former regime.
It is worthy to mention that accurate information on the amount of royalty paid by GACH to the Government has always been given by the minister to the National Assembly at the time of questioning by Deputies. Since the issuance of Licence, GACH Company has paid the amount of US$649,001.04 as royalty to the State for the shipment of 15,386.45 metric tons of HMC. The amount paid to Government represents 60% of the Net Profit after the deduction of operational costs (Mineral extraction, Transportation, Freight, Port handling charges, Labour, etc.) incurred by the company.
It is important to note that the HMC is always in a concentrated form and it’s not processed in The Gambia but in China for sale. Hence, the processed price of HMC indicated by Malagen is higher than the unprocessed price of HMC exported from The Gambia. The payment of royalty for HMC is effected by the company upon receipt and processing of cargo, with the average shipping times from date of loading varying between 2 to 3 months. The Tax payment being the responsibility of the licensee has been a requirement in the terms and conditions of the licence. However, it is imperative to clarify that tax is only liable on 40% shares of GACH and not the total sales revenue.
There has never been a ban on HMC mining in The Gambia. The stumbling block that prevented International Mining Companies to invest in exploration and Mining of The Gambian HMC has been the small size of the deposit compared to those in other countries. Thus, the promotion of investment for the exploitation of the HMC along the coastal area has been one of the activities of the Department since the conclusion of the evaluation of the remaining deposits.
The Ministry of Petroleum and Energy would like inform the general public that the Geological Department (GD) is undergoing reforms. As a start, a Special Committee, which comprises key stakeholders has been established at the ministry as an oversight body on the issuing of mining and quarrying licences. It also assists on the inspection and monitoring of mining operations.
Accordingly, we want to assure you that the Ministry is constantly monitoring the mining operations conducted at the same time being mindful of protecting people’s livelihood. It is a fallacy that agricultural activities have been affected. And where such happens, it is ensured that the licensee compensates the persons affected. The Licensee (GACH) was required to provide a bond of $30, 000 as guarantee for the rehabilitation of the affected areas after mining operations. The rehabilitation will help provide more space for farming activities, which will benefit the communities.
Signed
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Aminata Sanneh
Information Officer