HomeBase MetalsMines seek reduction in new power rates

Mines seek reduction in new power rates

Aerial photo of
Iduapriem plant – one
of the many mines
in Ghana facing a
100% increase in
power tariffs
Accra, Ghana — MININGREVIEW.COM — 02 July 2008 – The Ghana Chamber of Mines says mining companies in the country are negotiating with the government to seek a reduction in a 100% power rates increase resulting from an official move to cut electricity subsidies.

The government of Ghana announced last week that it would cut electricity subsidies for mining companies from July 1, as record oil prices threatened to eat into the country’s budget and growth rate. Finance minister Kwadwo Baah-Wiredu said the measure would come into force yesterday as  scheduled.

The government had informed companies operating in the country – Africa’s second-biggest gold producer after South Africa – that they would now be paying an average 22 cents per kilowatt hour – double the current 11 cents.

Ghana’s mining industry – which includes major miners AngloGold Ashanti and Newmont Mining Corporation – accepted that companies would have to pay higher power tariffs than before, but was pressing for a reduced increase.

Baah-Wiredu told Reuters he was aware the mining companies were seeking a reduced increase in power rates, but insisted that the government was sticking with its plan.

“We haven’t changed the implementation date, neither have we revised the proposed rate,” he said. “We will continue Finance minister dialogue with them and let them come to terms with the fact that we can no longer subsidise their operations,” the minister concluded.