Ghana is endowed with abundant natural resources, which have played a key role in the development efforts of the country. Ghana has a long history of mining especially for gold. Gold is a precious metal of high monetary value, sought after for the production of coins, jewelry and other artifacts. It is an established fact, evidence by records over the years that, gold is a major foreign exchange earner for Ghana's socioeconomic development.
Over the years, Ghana's stable economy and abundance natural resources especially gold have attracted many foreign entities and or individuals to develop strategic business partnerships with local Ghanaian companies for the export of these resources. A lot of these individuals have been cheated of their hard earned resources by unscrupulous entities masquerading as licensed gold buying companies by regulators when in fact they have no such license. This article is therefore intended to throw light on the procedures and legislative framework established for the sale and export of gold from Ghana.
It is important, following the above warning for foreigners be it private individuals and incorporated companies seeking to engage in gold purchase and export in Ghana to understand that, this is a regulated industry. It is governed by laws with established institutions mandated to ensure compliance. These institutions include the Minerals Commission (MC) of Ghana and the Precious Mineral Marketing Company (PMMC) among others.
There is therefore the need for individuals and companies (foreigners) to undertake due diligence before undertaking to engage local Ghanaian entity or an individual for the purchase and export of gold. It is not only advisable to undertake due diligence on the local entities and individuals in Ghana but is imperative to avoid being scammed by unlicensed entities.
PRECIOUS MINERAL MARKETING COMPANY (PMMC)
Precious Minerals Marketing Company (PMMC) Ltd was established in 1963 as Ghana Diamond Marketing Board charged with the sole responsibility for the purchase and marketing of Ghana's diamonds. In 1965, by Legislative Instrument (LI) 401, the Company was incorporated as a State Owned Enterprise (SOE). With the promulgation of the Diamonds Decree (NRCD 32) in 1972, Legislative Instrument (L.I 916) was enacted to change the company's name to Diamond Marketing Corporation. However, in 1989, Precious Mineral Marketing Corporation Law (PNDC Law 219) was enacted to yet again change the Company's name to the Precious Minerals Marketing Corporation with the following functions
- To grade, assay, value and process precious minerals
- To buy and sell precious minerals
- To perform any functions conferred upon it by the Diamond Decree, 1972 (N.R.C.D. 32)
- To appoint licensed buying agents for the purchase of precious minerals produced by small scale-miners
- To promote the development of precious minerals and jewelry industry in Ghana
- To do all such things as are incidental or conducive to the attainment of its objectives and functions.
Finally in year 2000, it was converted by Statutory Corporations Conversion to Companies Act, 1993 (Act 461) to a Limited Liability Company to operate under the Companies Act, 1963 (Act 179) as PRECIOUS MINERALS MARKETING COMPANY LIMITED with the same functions under the PNDC Law 219.
The following has been the functions of the Company until 2016 when most of the functions changed as a result of appointment of PMMC as the government assayer.
- Grading, assaying, valuing and processing of precious minerals.
- Buying and selling precious minerals
- Appointment of licensed buyers for the purchase of precious minerals produced by small scale miners
- Production of jewelry
- To carry on trade and business whatsoever which can in the opinion of the directors, be profitable ancillary for the general business of the Company.
The Company now operates as Government's assayer with the sole mandate of assaying all gold which leaves the country.
Due diligence should be conducted in order to;
- establish that the individual and or entity (that is the local company) the foreign entity or individual intends to engage for the purposes of gold purchase and export is licensed in Ghana, and
- identify all factors that will have an effect on the transaction.
In any case, any individual or entity must establish its own minimum level of comfort and must conduct as much research as is necessary to achieve the level of comfort before entering into gold purchase and export transactions in Ghana.
LICENCE TO BUY AND EXPORT GOLD
It is imperative to note that, in Ghana an individual needs a licence to buy and deal in minerals. Therefore, the export of gold out of the jurisdiction of Ghana can only be done under a license by an entity. This is regulated under the Minerals and Mining Act, 2006 (Act 703). It provides among others that, the Minister in consultation with the Commission may in writing licence persons the Minster considers fit, to buy and deal in the types and forms of minerals identified under the Act. It must be noted that, under the Act, mineral means a substance in solid or liquid form that occurs naturally in or on the earth and include gold and diamond but does not include petroleum resources as the latter is under a separate regulation. It is important to further note that, Minister under the Act means the Minister responsible for Mines and Natural Resources and reference to Commission means the Minerals Commission established under section 1 of the Minerals Commission Act, 1993 (Act 450).
GUIDELINES FOR THE EXPORT OF GOLD IN GHANA
The Minerals Commission had issued a directive and or procedures to govern the export of gold from Ghana. The following procedures shall govern the exportation of gold by Licensed Gold Exporters (LGE) other than the holders of mining leases. These measures issued by the Minerals Commission shall be in force until substituted by other procedures that may subsequently be prescribed. These include the following;
- A Licensed Gold Exporter (LGE) who intends to export gold shall inform the Precious Minerals Marketing Company Limited (PMMC) in writing of its export plans at least two (2) working days before the planned weekly export.
- The LGE shall submit the gold ore to be assayed by PMMC at a designated assay center, together with all declaration documents, Packing List and Invoice.
- The PMMC shall determine the gold content of the gold ore presented by the LGE using the appropriate assay method as agreed by the LGEs, Minerals Commission and the PMMC.
- The PMMC shall prepare a report of analysis of the gold ore presented by the LGE and issue copies instantly to the Bank of Ghana (BOG), the Ghana Revenue Authority Custom Officer stationed at the Assay Centre and the Minerals Commission.
- The PMMC shall invoice the LGE in respect of the assay at the agreed rate of 0.1% of the value of gold assayed and the LGE shall pay same to PMMC. The payment of this fee is without prejudice to any fee that may be charged by the Minerals Commission.
- All Gold Buying Agents of the PMMC, prior to this publication, may continue to use their permits until the expiry of the present term of the permit and same shall not be renewed by the PMMC upon expiry. All such Gold Buying Agents should immediately contact the Minerals Commission for further directions regarding the use of their permits. All persons who desire to obtain permits for buying gold shall apply to the Minerals Commission.
- The GRA Customs Official at the Assay Centre shall inspect and supervise the sealing of the assayed gold ore with the Customs Division's seal and endorse the Customs Declaration Form. The sealing of the assayed gold ore by the Customs Official shall be done in the presence of an authorized representative of the Assay Centre who shall also affix the seal of the PMMC Assay Centre at the same time.
- The LGE shall complete the required documentation at the Kotoka International Airport (KIA) before exporting the assayed gold.
- Under no condition shall gold ore be exported by LGE without the seals of the Customs Division of the Ghana Revenue Authority and the Government designated laboratory i.e. PMMC and accompanied with full documentation.
- All LGEs shall submit monthly returns to Minerals Commission in accordance with the terms and conditions of their licence agreements.
LOCAL LEGAL REPRESENTATIVE(LLR)
It is advisable for the foreign entity to have access to legal representation prior to engaging in any gold export business in Ghana. Not only will the legal representative conduct due diligence on the Licensed Gold Exporter to ascertain that it is in fact licensed and in good standing, he/she will also be expected to educate and or proffer sound professional advice to the foreign entity on any changes in the laws and regulations governing the purchase and export of gold in Ghana. Most importantly, the legal representative shall police the processes leading to the purchase and export of the gold to ensure that, the precise ounces and the required purity of the mineral is shipped from the Republic to its intended recipient. This timely legal advice must be obtained from a lawyer with knowledge and working experience in gold trading business in Ghana. The Legal Representative shall also be responsible for the formulation and the drafting of an agreement to govern the transaction before any transfer of funds shall be effected for payments. This eventually will help to secure the interest of the parties to the transaction and ensure that their reasonable expectation is meet at the end of the day.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.