The amount represents 10% of dividends declared, which is due to the government by virtue of the latter’s 10% ownership in Gold Fields Ghana through a free carried interest.
This is the second dividend payment to government this year. An amount of $4.5million was paid earlier this year in May.
Between its Tarkwa and Damang operations, Gold Fields Ghana has, to date, paid over $87 million in dividends, over $548 million in corporate taxes, and over $439 million in royalties to the Government of Ghana.
Gold Fields’ executive VP and head of West Africa Alfred Baku, who presented the $7 million cheque to the Deputy Minister of Finance, Mona Quartey, noted that the country’s political stability and strong democratic credentials give confidence to the investment community.
He was, however, deeply worried about the ongoing power crisis which has significantly added to the production cost of mining companies, as well as the huge outstanding VAT refunds which are locking up capital and adversely affecting the recapitalisation of mining operations.
Baku said, “the delay in the release of the VAT refunds is negatively impacting the company’s cash flow, especially since the real value of the money is being lost over time, through the depreciation of the local currency.” The fact that Gold Fields Ghana is operating without a stability agreement, unlike some of its peers, was also of grave concern.
Baku was of the view that mining operations should transform lives through social development and appealed for a greater percentage of mining royalties to be invested in mining communities to accelerate community development.
He announced that Gold Fields Ghana, through its foundation – Gold Fields Ghana Foundation – has invested over $26 million in mining communities, in the areas of education, health, water and sanitation, agriculture and agribusinessand infrastructure.
“The company is currently seeking to partner with government to rehabilitate a 33km road from Tarkwa through Abosso to Damang. Once completed, this road will revive and enhance economic activities and promote agriculture along that corridor,” he said.
Baku maintained that mining could be an important catalyst for long term economic development, and that Gold Fields Ghana is already playing a leadership role in that respect.