Limestone-rich Krobo communities deprived development

For more than two decades, limestone miners in the Yilo and Manya Krobo municipalities have defaulted in the payment of royalties and concession rent, and as they do, they leave a trail of environmental degradation, poverty, and diseases.

Information obtained from the Minerals Commission (MC) shows that only five companies are licensed to quarry limestone in the Manya-Yilo enclave of the Eastern Region. The rest are therefore operating without a license.

Information we obtained through a Right to Information (RTI) request to the Commission shows that the five companies licensed to operate are GHACEM Limited, Ciments De L’Afrique Ghana Limited, Ter Quarry Limited, AJ Fanj Construction & Industrial Engineering Limited, and Agyapaddo Construction Works Limited.

Residents nonetheless, know of an extra six firms namely: Love Enterprise, De-Simone Company Ltd, Poponya-Dornya Community Mining Limited, Klo Christo Community Mining, Lawat Enterprise, and Klo Begro Community Mining.

However, during further searches on the Mining Cadastre System of the Commission, we found that Poponya-Dornya Community Mining Limited is one of the licensed companies. We, therefore, made further requests for clarification on the inconsistency from the Commission but that is yet to be responded to.

It is important to note that GHACEM is currently operating through its subsidiary known as West Africa Quarries. But is the Minerals Commission aware?



Minerals Commission list of licenced Firms

Royalties’ payment and disbursement

According to the Minerals and Mining Act, (MMA) 2006 (Act 703), mining companies are required to pay five percent of total mining revenue as mineral royalty to the Government of Ghana (GoG).

In this case, the Minerals Income Investment Fund (MIIF) under the Act, 2018 (Act 978), is the recipient of the fund.

In practice, MIIF retains 80 percent and disburses 20 percent of it to the Minerals Commission (MC) and the Office of Administration of Stool Lands (OASL), which is responsible for deploying it directly to traditional authorities and local government for the provision of developmental amenities.

The breakdown of the MIIF is as follows: two percent goes into the operations of MIIF, 2.4 percent to the Ghana Revenue Authority (GRA) as a collecting agent; and 75.6 percent goes into investment activities.

The formula for the disbursement of the 10 percent allocated to OASL stipulates that the district assemblies should receive 55 percent, stools -25 percent, and the traditional council -20 percent.



Disbursement of the five percent government Royalties

Seeking more information on the matter of royalty payment, we made an RTI request to the OASL office in the Eastern Region, Koforidua, to ascertain how much was received and disbursed as royalties and concession rent from these licensed quarry firms in the Krobo areas.

The OASL records indicate that only two companies, Agyapaddo and Ter Quarry are on record to have paid some money.



Table Representation of Royalties and ground rent payment. the database of OASL, Koforidua, E/R

Moreover, both companies have defaulted payments for two years and five years respectively, while nothing is on record to show payments from the other three licensed firms.

According to the OASL, Agyapaddo’s two years outstanding concession rent amounts to GH¢760, while that of Ter Quarry’s five years amounts to GH¢20,144.25

Interestingly, the OASL administrator has no data on GHACEM, the first operator in the jurisdiction in its records.



The OASL, Koforidua, E/R database

Traditional council’s royalties

According to the Manya Traditional Council, from 2004 to date, it has not received any royalties. Meanwhile, many of the youth in the community have been accusing the paramount chief and traditional council of taking money from the quarry firms and allowing them to operate irresponsibly, but the council has been emphatic in stating that nothing has been received so far.

An Elder of the Paramountcy at the Manya Traditional Council, Nene Samuel Sakite, explained that the council is having challenges accessing its due revenue from the operations in the area.

He stressed that the Council has been unable to access either royalties or development funds for over two decades of these operations.

“When limestone was discovered in 2004, the Paramount Chief raised concerns about benefits to the communities and demanded documentation to back same but the government pleaded that we should allow the commissioning to take place because the time was due and those engagements on benefits and documentation would take place afterward. However, from then to now, no such arrangement has been made.

We have been engaging GHACEM for years but to no avail. Fortunately for us, the new management of GHACEM has restarted negotiations with us on royalties, development funds, and conveyance fees for the area,” he said.

He indicated that this engagement is being championed by a tripartite committee comprising members from Yilo, Manya Krobo, and GHACEM.

Development fund issues

Nene Samuel Sakite stated that some years ago, the communities were informed that GHACEM established a Community Development Fund (CDF) for Odugblase and the adjoining communities, however, the communities have never been able to access the funds.

This, he said was because of a disagreement between Yilo and Manya traditional councils over who owns the greater proportion of the land.

“Indeed, there is such a fund established by GHACEM to support community development but the Paramount Chief of Yilo Traditional Council, at the time, Nene Ologo, disagreed with the 32 percent allocated to his council and the 68 percent to the Manya council,” he explained.

It should be noted that the Manya-Yilo disagreement is a long-standing dispute over a mineral development fund created by GHACEM, not a royalty.

As of 2010, six years after the establishment of the mineral development fund, the money accrued was about GH¢1 billion but currently, nobody has a clear idea about how much is accrued in the fund. (John Narh, 2016).

Unfortunately, efforts to get the most current value of the fund have not been successful.

Nightmare

On September 24, 2004, when the first mine was commissioned, it was all joy that limestone (a primary component for cement manufacturing) had been discovered in the community.

Unfortunately, the dreams of the locals have turned into nightmares as the reality is miles short of what they had hoped for.

A youth leader in the community, Justice Kweku Sangmor, said: “We heard that GHACEM would provide us with social amenities such as health and educational facilities, as well as improve social infrastructure in all the surrounding communities but we are yet to see it manifest.”

The general notion was that these social amenities and infrastructural development could create enabling environments for alternative livelihood opportunities at Odugblase.

Between 2004 and now, the limestone quarry activities have expanded beyond Odugblase to Yongwa, Popotia, Yokuhe, and Ponpong, among others both in the Yilo and Manya Krobo municipalities, and the number of companies to has increased.

Community visit

During visits to the host communities on June 24 and 25, July 9, August 27, and September 15, this year, we noticed that tipper trucks were actively transporting aggregates believed to be limestones from concessions of the aforementioned firms.

Due to the deplorable nature of the roads, one could hear the loud noise of the bumping trucks. The winding roads in the communities are untarred, dusty, and undulating. From a distance of 200 metres, we could feel the thundering rumblings of moving trucks loaded with limestones.

In conversations, most of the landowners in the communities complain bitterly about the periodic loud blasts which leave various degrees of damage on their buildings including structural cracks. Some cracks run from the foundation to the roof of the buildings, and several on each building.

These communities, unfortunately, have not seen any major economic development over the past decade since commercial quarry activities commenced. Bad road networks, no jobs, and infrastructure deficit among others are very visible in the area.

Since the firms do not process the limestone into cement in the community, their limited employment opportunities at the mining sites.

Unfortunately, these local people do not have the requisite skills to apply for the few skilled jobs that the firms could offer in the community.

Petty trading is therefore common, engaged mostly by women who buy farm produce in remote communities and transport it to nearby cities like Koforidua, Somanya, Odumase, and Asesewa to sell.

Health records obtained from the community clinics show notable deteriorating health conditions among the people. Common health conditions directly related to dust in the communities included acute respiratory tract infections, ear and eye infections, cough, and pneumonia.

According to a report by the Environmental Science Programme, Faculty of Science, University of Ghana, using dust sampling tests in the affected communities of limestone quarry in the Manya Krobo area, values recorded were above the Environmental Protection Agency (EPA) Ghana daily guideline level.

Stakeholder participation

Interactions with the traditional councils, sub-chiefs, landlords, community leaders, and municipal assembly show that at the commencement of mining, they were barely engaged before GHACEM started operations. Though GHACEM is actively engaging them now at a committee.

The two traditional councils also expressed worry over how they were invited to the commissioning of the mine operations without according to them the nitty-gritty of the benefits they stand to benefit in terms of development support for their areas.

This notwithstanding attempts to get a fair share of benefits from the operations for their community’s development support has been faced with several irregularities, they said.

Again, the landowners noted that they were not adequately involved in the planning process hence even though they are aware of a development fund they do not know how much it has accrued or how to access it for community development.

Mining companies’ responses

The Manager of the Klo-Begoro Community Mines, Foster Djaba in an interview confirmed their active operation in the area. However, he debunked claims that they are not licensed and hence not paying royalties to the state.

"We are not in arrears of royalties and ground rents because anytime we supply, we make sure we pay royalties.

We pay conveyance, permit, and community levy to the assembly but we pay the minerals royalties to the Minerals Income Investment Fund (MIIF) and concession rent to stool lands at the OASL in Accra. The last time we paid was last year, 2021, after compiling it,” he said.

The OASL office in Accra maintained that the information available on these firms can only be obtained in the Koforidua Eastern Regional Office. Therefore, if the information obtained from the Koforidua office stated that they have not paid, then that is the right reflection of the situation.

Requests made to the firm to produce evidence of payments via phone calls and WhatsApp messages have not been forthcoming though assurance was made in a phone call conversation.

For his part, the Administration Officer of Poponya-Dornya, Joseph Nartey mentioned that his company has actively started carrying out quarrying in the area upon receipt of the license only recently.

"We only had our mining permits in August 2022 and so we are yet to file our royalties and ground rent,” he said.

However, the community members mentioned that this firm has been operating for over a year.

All efforts to establish contact with the rest of the companies for their side of the story have been unsuccessful. Phone calls were unanswered, WhatsApp messages were not responded to and emails were not answered. Others also have no contact details and our resource persons could not help us with contacts.

Initial arrangement

The Chief of Odugblase, Dadematse Martin Komersona Nartey, stated that there was an arrangement for GHACEM to provide the communities with bags of cement from time to time to help them fix the structural cracks and support their building projects but unfortunately, they could only remember the promise being honoured once since mining started in the area.

“We agreed that they will supply us with some quantities of cement bags periodically but since they started operations we were just supplied once. It was agreed that each household will receive at least 30 bags per session. Some got their supplies (majority) others did not but that was the end, nothing came from them again,” he said.

He added that all efforts to get more supplies to salvage the cracks in their buildings have proved futile.

He noted that limestone mining in the community has affected their farming activities but the mineral revenue could not be accessed to provide alternative livelihood activities.

He explained that the use of dynamites to blast limestone causes air pollution which is harmful to their life and livelihood. The dust settles on their nearby food crops and causes stunted growth and poor yield. Again, the excavated soil from the mine is washed onto nearby farms when it rains burying the top rich loamy soil.

“The eroded soil is deposited on these farms and buries the top fertile soil making it less productive for crops like maize, tomato, pepper, and okra. Production of these staples has dropped by about 60 percent,” he added.

A youth leader in Anyomony, one of the mining communities, Aikins Koffie-Terkper, stated that because the land is individual and family-owned as compared to stool lands, some landlords are having issues with ground rent payments and royalty payments from the quarry firms.

This, he said was because they entered into agreements without any proper legal or expert advice, hence they do not understand the contracts properly nor know how to demand their royalties.

Beneficial Ownership Structures

Despite the country’s commitment to institutionalise beneficial ownership (BO) transparency regime, under the new Companies Act, 2019 (Act 992) for companies to disclose true owners, the majority of these companies are yet to be BO compliant.

Disclosure of BO details of company ownership can help close channels for corruption, enable effective taxation, build fairer markets, encourage responsible investment, and manage business risk.

In the extractive industries, knowing who has the right to extract oil, gas, and minerals is key to addressing risks of corruption or conflict of interest.

Whilst this has impacted the quality of the BO data available for this report, it is important to indicate that the Office of the Registrar of Companies (ORC) has given a window for companies to be compliant (end of year, 2022).

Per the BO data sourced from the ORC, the Ghana government owns five percent of the shares in GHACEM Limited with a Norwegian firm Scancem International DA controlling about 93 percent of the shares with the two percent allocated to a ‘non-shareholder’ BO.

The BO of Agyapaddo is a politically exposed person (PEP) in the person of Isaac Opare-Addo, a former Convention Peoples Party (CPP) Eastern Regional Chairman (the very region of the operations). All other shareholders of the company are also believed to be his children.

Ciments De L’Afrique Ghana Ltd has no BO data but the shareholders are Cima Holding SA and Omnium Des Industries Et Dela Promotion. Similarly, Ter Quarry has only one shareholder in the person of Tony Elradi. AJ FANJ Construction is also solely owned by Fanj Abdulkarim.

A search on the BOs of the ‘unlicensed operators,’ per the records as indicated by the MC, showed that only De-Simone and Popoponya-Dornya Community Mining are registered with ORC.

While De-Simone has Enrico and Federico Desimonne as shareholders, Poponya-Dornya has Akwasi Mintah and Stephen Opata (a PEP), an Assistant Director at the Bank of Ghana (BoG), as shareholders. His LinkedIn account profile describes him as the “Head of Risk, Foreign Reserves Management, Treasury Dept. at Bank of Ghana.”

As stated earlier, Love Enterprise, LAWAT Enterprise, Klo Christo, and Klo Begro are all unregistered companies and are as well unlicensed.

Out of this projection, it was estimated that the yearly revenue accrued by these firms per acre is GH¢43,200,000. To generate this revenue, the estimated cost of production stands at GH¢30,581,880. Therefore, the yearly net profit is GH¢12,618,120.

Per the MC’s restricted mining lease regulation, these firms should be having a concession size of about 25 acres. All things being equal GH¢12,618,120 per acre a year multiplied by 25 acres will be GH¢315,453,000.

The five percent royalty per annum of this amount is GH¢15,772,650. It must be emphasized that some of these firms do not operate all year round as indicated by Klo Begro Community Mining, in their response. So, this figure may vary significantly.

Per the formula for the distribution of mineral royalties, the OASL’s 10 percent of the aforementioned amount equals GH¢1,577,265. Out of this amount the Lower Manya and Yilo Krobo Municipalities could be receiving a royalty of over GH¢710,000 annually.

A five-year accumulation of this amount is enough to build a health facility, junior high school (JHS), and provide pipe-bone water in Odugblase, as the sub-chief demanded, and also serve the neighbouring communities.

But after two decades of mining in these communities, the people are still eluded from all these funds needed for development.

How long will these infractions continue? Is the Minerals Commission aware that most of the firms operating in these areas have no licence? And is the MC also aware that some of the licenced ones have exceeded the expiry date whilst others will expire end of this year?

The MC must act to bring sanity to the area. The GRA, Ministry of Finance, and all state agencies with a mandate to ensure the right taxes are paid and royalties collected act with an urgency to block revenue loss and retrieve every dime owed to the state by these firms.

The Project team includes Ernest Bako Wubonto and Kizito Cudjoe, the Business and Financial Times, Maclean Kwofie, Graphic Communication, and Julius Satsi, Finder Newspaper.