Introduction
Mining is one of the most significant industries in Ghana, contributing heavily to the economy and playing a central role in the country’s development. In 2023, the Mining and Quarrying sector (excluding oil and gas) contributed GHC 13.967 billion to Ghana’s Gross Domestic Product (GDP), representing 8.1% of the total GDP thus making it the country’s third most valuable economic activity[1]. As one of Africa’s top gold producers, Ghana also harbors a wealth of other minerals such as bauxite, manganese, diamonds, and even more recently, the discovery of lithium. The process of discovering and extracting these minerals is governed by strict legal frameworks. One of the primary legislative instruments regulating mining activities in the country is the Minerals and Mining Act, 2006 (Act 703) as Amended[2]. This Act provides a comprehensive legal framework for mineral resource management, including the processes involved in exploring, discovering, and developing minerals on a mining concession.
This article will provide an in-depth exploration of how the discovery of other minerals within an existing mining concession is regulated under Act 703. We will discuss the procedures, rights, obligations, and challenges associated with mineral exploration, focusing on the law’s applicability to the discovery of additional minerals beyond those initially licensed for extraction.
[1] Ghana Chamber of Mines, Performance of the Mining Industry 2023 (domestic economic developments in 2023)
[2] Act 703
- Overview of the Minerals and Mining Act, Act 703
The Minerals and Mining Act, 2006 (Act 703) as Amended is the primary legislative instrument governing the mining sector in Ghana. It regulates all aspects of the mining industry, from prospecting, reconnaisance and extraction of minerals to environmental protection and community relations. Act 703 is anchored on the principle that all mineral resources in Ghana are vested in the President in trust for the people of Ghana[1], and thus any exploration, development, or extraction of minerals requires permission and licensing from the state, through the Minerals Commission.[2]
Under this law, anyone interested in engaging in mineral exploration or mining activities must obtain the necessary licenses and permits from the Minerals Commission, the primary regulatory body for the mining sector. This regulatory framework seeks to ensure the responsible extraction of minerals while balancing the economic, social, and environmental interests of the country.
2. Grant of Mining Rights Under Act 703
A mineral right can be defined as “Reconnaissance License; Prospecting License; Mining License; Restricted Reconnaissance License; Restricted Prospecting License & Restricted Mining Lease”.[3] There is also the Small Scale Mining License which by law is granted to Ghanaians only.[4] Further a mineral right may only be granted to a company registered under the Companies Act, 2019 (Act 992) or the Incorporated Private Partnerships Act 1962 (Act 152), and not to an individual, unless this Act states otherwise.[5] Each of these licenses or leases is granted for a specified mineral or minerals. However, as geological formations in mining areas may be rich in more than one mineral, it is possible for a mining operator to discover additional minerals that were not part of the original exploration or mining license.
3. Discovery of Other Minerals on a Mining Concession
One of the central issues in mining operations in Ghana involves the discovery of other minerals not initially listed in the exploration or mining license. Ghana’s subsoil is known for its complex and varied geological structures, which often means that deposits of multiple minerals can be found within the same concession. These additional minerals may include both major and minor minerals, ranging from gold and bauxite to lithium, manganese or other rare earth elements.
[1] Section 1, Act 703 & Article 257 (6), 1992 Constitution of Ghana
[2] Sections 5 & 9, Act 703
[3] Section 111, Act 703
[4] Section 83, Act 703
[5] Section 10, Act 703
4. The Legal Framework for Discovering Other Minerals
The Minerals and Mining Act, Act 703 provides specific guidelines on what a concession holder must do upon discovering minerals other than those specified in the holder’s license. The law emphasizes that the discovery of additional minerals does not automatically grant the concession holder the right to explore or exploit those minerals unless proper authorization is given. It is designed to prevent unauthorized exploitation and to ensure that the state retains control over its mineral resources.
Section 15(1) of Act 703 stipulates that where the holder of a reconnaissance, prospecting, or mining license discovers minerals that are not covered under the existing license, the holder is obligated by law to notify the Minerals Commission and the Geological Survey Department within thirty (30) days in writing of the discovery.
The holder of the mineral right exercises the first option to apply for the mineral right to be amended to include the additional mineral discovered.[1] Once notified, the Minister, through the Minerals Commission, may either; grant permission to the concession holder to explore and develop the newly discovered minerals, provided the concessionaire has the capacity and meets all regulatory requirements; or require the concession holder to apply for a new or separate license for the additional minerals.[2]
Alternatively, a situation may arise where the Minerals Commission becomes aware of the existence of additional minerals within a concession already covered by an existing mineral right which the concession holder may have no knowledge of. In such a situation, Act 703 provides that a mineral right shall not be granted for another mineral over the same area of land the subject of an existing mineral right, unless the holder of the existing right is notified and given the first option of applying for the right.[3] The above provision is reiterated in the Minerals and Mining (Licensing) Regulations, 2012, L.I. 2176 which provides that where an application for a mining lease conflicts with an existing mineral rights for a different mineral in the same area, the Commission shall give notice to the existing holder within fifteen (15) days of the application, and the holder shall be given the first option to add the mineral to the existing mineral right[4]. It further provides that where the existing mineral right holder exercises the option to add the new mineral within the prescribed time, the new application shall be rejected without a refund of the fees paid by the Applicant.[5]
[1] Section 15(3), Act 703
[2] Section 15 (4), Act 703
[3] Section 15 (5), Act 703
[4]Regulation 176(1), L.I 2176
[5]Regulation 176(3), L.I 2176
Alternatively, where the existing mineral right holder chooses not to exercise the option or does not exercise the option within the prescribed time, the new application will be accepted and processed[1].
In simple terms, if Company X holds the mineral rights to mine gold within a specified area, the Minerals Commission cannot grant mineral rights for eg. lithium within the same concession to Company Y without first offering those rights to Company X. It is only when Company X declines the offer or fails to accept it within the prescribed period that the Commission assign the rights to Company Y.
The legal provisions governing the discovery of additional minerals within an existing mining concession and the right of the current mineral rights holder to be given the first option to apply for such minerals are mandatory. The Minerals Commission has no discretion to act otherwise.
Any attempt by the Minerals Commission to grant a mineral right within an existing concession to another party without first offering it to the existing concessionaire would amount to a violation of the Minerals and Mining Act, 2006 (Act 703) and its accompanying regulations, Minerals and Mining (Licensing) Regulations, 2012 (L.I. 2176).
Such an action by the Minerals Commission, if challenged in court of law, without preempting the court’s decision, would be declared null, void, and of no legal effect. Such decision would align with the well-established principle upheld by the Supreme Court, as articulated by Acquah Jsc. in Boyefio v. NTHC Ltd[2], which states: “Where an enactment has prescribed a special procedure by which something is to be done, it is that procedure that must be followed.”
5. Procedures for Securing Rights to Newly Discovered Minerals
The process of securing mining rights for additional minerals discovered within an existing concession requires compliance with several legal and regulatory steps outlined in Act 703 and the Minerals and L.I. 2176. Below is an overview of the procedures involved. These steps apply to all types of licenses issued by the Minerals Commission, be it Reconnaissance, Prospecting, or Mining licenses.
- Notification to the Commission
The concession holder must first officially notify the Minerals Commission and Geological Survey Department, of the discovery of the additional minerals within thirty (30) days of the discovery. This notification typically includes particulars of the discovery such as geological reports, exploration data, maps, laboratory assay results and other supporting evidence to substantiate the claim[3].
[1]Regulation 176(4), L.I 2176
[2] [1996-1997] SCGLR531 holding 5
[3] Sections 9, 29 & 113, L.I. 2176
b. Application for a License or Permit
Once the notification has been made, the concession holder is required by right, to submit an application for a new license or permit to the Minerals Commission. This process mirrors the steps involved in applying for an original mining or prospecting license and may include environmental assessments, technical assessments, and other due diligence requirements.
c. Environmental and Social Considerations
In accordance with the Environmental Protection Agency (EPA) regulations, the discovery of additional minerals may require a separate Environmental Impact Assessment (EIA), especially if the extraction of the newly discovered minerals has the potential to significantly alter the scope of operations or affect local communities.
The concession holder must engage in community consultations and obtain the necessary environmental permits before commencing exploration or mining of the new mineral.
d. Approval or Rejection by the Minerals Commission
The Minerals Commission evaluates the concession holder’s application, considering factors such as the potential economic value of the new mineral, the environmental impact, and the concessionaire’s technical and financial capacity. Based on these considerations, the commission can either approve or reject the application.
If approved, a supplementary license or permit will be granted, allowing the concessionaire to explore and develop the newly discovered minerals. The Commission shall then record the changes in the Register of mineral rights which by law, it is required to keep to record applications, grants, variations and dealings in, assignments, transfers, suspension and cancellation of mineral rights.[1]
6. OBLIGATIONS OF THE CONCESSIONAIRE
Once the concession holder receives approval to mine the additional mineral, the consessionaire is subject to various legal obligations under Act 703 (As Amended), as well as other related legislation. These obligations include:
[1] Section 103 (1), Act 703 (As Amended)
- Royalty Payments:
By law, the holder of a mining license, restricted mining license and small scale mining license shall, in respect of minerals obtained from its mining operations, pay royalty to the Republic at the rate and in the manner that may be prescribed[1]. Consequently, a Minerals and mining operations Tax (Mineral Royalty) is imposed on income of a person engaged in mineral operations. Subject to any fiscal stability agreement, the mineral royalty rate is 5% of the total revenue earned from mining operations and is calculated for each year of assessment[2]. Thus, the concessionaire is required to pay 5% of the gross revenue from the sale of minerals, as royalties to the state on any minerals extracted, including those newly discovered.
b. Compliance with Environmental Laws:
Mining companies are obligated to comply with environmental laws, including the protection of water bodies, air quality, and biodiversity. Mining activities for the additional minerals must adhere to the standards set by the Environmental Protection Agency (EPA) in Ghana.
c. Local Content and Employment:
The concessionaire must ensure that their mining operations contribute to local employment and the development of local industries, in line with the government’s local content policy[3].
d. Reporting and Record-Keeping: The concessionaire is also required to maintain detailed records of all exploration and mining activities, including production figures, environmental impact reports, and other relevant data. These reports must be submitted to the Minerals Commission for review.
Conclusion
The discovery of additional minerals on a mining concession presents both opportunities and challenges. Under the Minerals and Mining Act, 2006 (Act 703) (As Amended), concession holders are required to follow specific legal procedures when such discoveries are made, including notifying the Minister through the Minerals Commission, applying for the necessary licenses, and adhering to environmental and social regulations.
While the law provides a framework for managing the discovery and exploitation of other minerals, mining companies must navigate a complex regulatory environment to unlock the full economic potential of their concessions. At the same time, the Ghanaian government must balance the need for economic development with environmental protection and social responsibility to ensure that the country’s mineral resources benefit all stakeholders. The discovery of additional minerals, when properly managed, can contribute significantly to the continued growth and development of Ghana’s mining sector.
Ultimately, the effective implementation of the Minerals and Mining Act, 2006 (Act 703) (As Amended), is essential in ensuring that all minerals discovered in Ghana are utilised in a manner that promotes sustainable development, respects the environment, and benefits the people of Ghana.
[1] Section 25, Act 703 (As Amended)
[2] gra.gov.gh/portfolio/mineral royalty tax & www.mincom.gov.gh/fiscal-regime
[3] Minerals and Mining (Local Content and Local Participation) Regulations, 2020 (L.I. 2431
REFERENCES
- Constitution of Ghana, 1992
- Minerals and Mining Act, 2006 (Act 703) (As Amended)
- Minerals and Mining (Licensing) Regulations, 2012, L.I. 2176
- Minerals and Mining (Local Content and Local Participation) Regulations, 2020 (L.I. 2431)
- www.mincom.gov.gh/fiscal-regime Ghana Chamber of Mines, Performance of the Mining Industry 2023 (domestic economic developments in 2023)
- www.gra.gov.gh/portfolio/mineral royalty tax & www.mincom.gov.gh/fiscal-regime
AUTHOR: Karikari-Boakye Yiadom, Esq.
The author is a practising attorney and Partner at Eagle AB & K Law Pruc.
