sharing in governance of extractive industries

State-owned diamond [company] in Ghana handed over to private investor - Xinhua

Below is a story from Xinhuanet. The original article is available at http://bit.ly/qZEWgY

By Justice Lee Adoboe

ACCRA, Aug. 23 (Xinhua) -- The Ghana government handed over the state-owned Ghana Consolidated Diamonds (GCD) to a new investor, Great Consolidated Diamond Ghana Ltd (GCDGL), at a ceremony held on Tuesday in Akwatia, 80 km northwest of here.

Addressing the handed-over ceremony, Vice President John Dramani Mahama announced that two private companies had been given the go ahead to build state-of-the-art gold refineries in Ghana, while the state-owned Precious Minerals Marketing Company (PMMC) had expanded its diamond polishing facility.

This was in line with the government policy of ensuring that the country added value to minerals for higher returns on the world market.

Mahama explained that the decision to divest the state-owned diamond company to allow for private sector participation in diamond production was in recognition of government policy of making the private sector the engine of growth to catalyze the development of other sectors of the economy.

The new owners of the diamond company promised to create 50,000 jobs in the long term.

Official statistics showed that GCD had produced over 2.5 million carats of diamond annually between the 1960s and the 1980s.

However, production dropped to 157,000 carats in 2003 and further dwindled to as low as 79,000 carats in 2007.

The decrease in production was attributed to the lack of capital injection leading further to deterioration in mine infrastructure.

"This therefore did not only aggravate the debt accumulation situation of the then GCD, but also led to the suspension of the company's operation in 2007," Mahama said.

It became obvious that no mine could survive with the conditions in which GCD found itself and so a new owner should be found to invest into the operations, the vice president contended.

He described the current divestiture as unique since the new owner was a wholly Ghanaian-owned company.

Mahama also promised that government would continue exploration activities to unearth other deposits in the country.

Deputy Minister for Lands and Natural Resources Henry Ford Kamel noted that the dwindling fortunes of the GCD represented dashed hopes and painful memories of the locals in Akwatia.

He said the government would therefore lend its support in every way to the new investor to be able to deliver on its promises of the people.

Chairman of the Board of Directors of GCDGL Kwame Akuffo announced that the company would from next week employ 2,500 workers to start its operations, but would employ 50,000 people in the long term.

He also promised that the company would carry out its operations in an environmentally responsible manner in order to leave a good legacy for future generations.

Information gathered by Xinhua indicated that GCDL, owned by founder of Zoomlion Ghana, the leading sanitation company in the country, agreed to pay 17 million U. S. dollars to the government, but has so far paid only 1.7 million dollars, representing 10 percent of the total cost.

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