Mining rights and title in Ghana

Mining rights and title

To what extent does the state control mining rights in your jurisdiction? Can those rights be granted to private parties and to what extent will they have title to minerals in the ground? Are there large areas where the mining rights are held privately or which belong to the owner of the surface rights? Is there a separate legal regime or process for third parties to obtain mining rights in those areas?

The title or ownership of all minerals, including metallic minerals, is vested in the President of Ghana in trust for, and on behalf of, the people of Ghana.

Mineral rights are granted to private parties giving them the right to mine the minerals in the ground.

There are large areas such as Tarkwa and Obuasi where the mineral rights are privately held by large mining companies. Small-scale and artisanal miners are also permitted to exploit the minerals in those areas. Often, the surface rights are owned separately.

What information and data are publicly available to private parties that wish to engage in exploration and other mining activities? Is there an agency which collects mineral assessment reports from private parties? Must private parties file mineral assessment reports? Does the agency or the government conduct geoscience surveys, which become part of the database? Is the database available online?

The Minerals Commission has a geological map of Ghana specifying the probable areas where minerals may be found. The Geological Survey Department is the technical entity responsible for carrying out geological surveys and also retains similar data.

Private parties granted mineral rights are required to keep records of:

• any minerals discovered;
• results of any geochemical or geophysical analysis;
• results of any study, survey, test, or other work undertaken in the area covered by the licence; and
• interpretation and assessment of such tests and surveys, among others.

The subject matter of the records depends on the type of mineral right granted. And, the holder of the right is required to keep these records at an address notified to the Minerals Commission. The holder of the mineral right is also required to permit officials of the Commission to inspect and make copies of the records.

The holder of a mineral right may also be required to furnish the Commission or the Geological Survey Department with reports kept as part of the required records. All records kept are, however, confidential and as such, persons to whom they are disclosed are prohibited from divulging information contained in them.

Also, copyright in the information contained in the reports passes to, and resides in, Ghana, when the person who prepared the reports ceases to hold the mineral rights in respect of which the records were kept, or is not granted any other mineral right in substitution, over the same area.

The mining laws require that records of all mineral rights granted should be maintained and must be open to inspection by members of the public. Copies of such records are available to members of the public on payment of the prescribed fees. The database is not yet available online.

What mining rights may private parties acquire? How are these acquired? What obligations does the rights holder have? If exploration or reconnaissance licences are granted, does such tenure give the holder an automatic or preferential right to acquire a mining licence? What are the requirements to convert to a mining licence?

Ghana has three kinds of mining rights:

• reconnaissance licence;
• prospecting licence; and
• mining lease.

Private parties may acquire any or all of them, although the correct procedure is to obtain the exploratory licences (reconnaissance and prospecting) and then convert them into a mining lease following a successful exploration. The reconnaissance licence allows the holder to engage in initial exploratory work and search for minerals. It gives the holder the right to conduct reconnaissance exercises regarding the reconnaissance area.

However, the holder is not entitled to drill, excavate or carry on any under surface operations. The prospecting licence permits the holder to carry out activities including activities to determine the extent and economic value of any deposit in the prospecting area. The mining lease gives the holder the right to intentionally win minerals, and it includes any operations directly or indirectly necessary or incidental thereto.

The granting of mineral rights is based on a first-come, first-served basis as long as the applicant has met the requirements stipulated in the mining law. A holder of a reconnaissance licence may apply to obtain a mining lease but not on a preferential basis. From 1 July 2010, the Minerals Commission enacted a new policy concerning the granting of extensions to mineral rights. This was because the Minerals Commission realised that a number of companies were abusing the regime then in place.

Section 34(2) of the Minerals and Mining Act allows for the term of prospecting licences to be no more than three years. Licence holders are obliged to reduce the area of the prospecting licence upon renewal by section 38(1) of the Minerals and Mining Act. In practice, however, the term granted has generally been two years, to ensure companies are kept committed.

Following complaints from prospecting licence holders that the two-year term granted was not enough for the completion of their exploration programmes, a further one-year extension was granted without requiring a reduction in the size of prospecting area, if the holders demonstrated performance but needed time to complete their exploration programmes and enable them to make informed decisions with regard to renewing their licence.

The Minerals Commission realised that a number of companies abused this privilege and continuously requested extensions even though they were in a position to apply for a renewal of the licence. This practice created problems for the Minerals Commission in its management of the mineral title system.

Consequently, since 1 July 2010, the Minerals Commission has been guided by the following policies in granting extensions:

• only prospecting licences may be extended (reconnaissance licences and mining leases will not be extended);
• an application for extension of a prospecting licence will be granted once, and for a term of one year, especially for those companies active on the ground; and
• no extensions will be entertained for non-performing companies.

A holder of a reconnaissance licence or a prospecting licence may apply for one or more mining leases regarding any or all of the minerals that formed the subject of the licence, prior to the expiry of the licence. However, the blocks that constitute the reconnaissance or prospecting area should not form more than three discrete areas (three separate applications should be submitted) with each consisting of either a block or a number of blocks with common sides.

The grant of the mining lease in these circumstances is subject to compliance with all the terms of the licence held prior to the application for the mining lease. The Minister responsible for Natural Resources is required to grant the application, provided all the application requirements have been met, within 60 days of receipt of the application. Any dispute between the applicant and the Minister is required to be resolved through an alternative dispute resolution mechanism specified under the Minerals and Mining Act.

What is the regime for the renewal and transfer of mineral licences?

Under the Minerals and Mining Act, the holder of a reconnaissance licence may, not later than three months before the expiry of the initial term of the licence, apply to the Minister of Lands and Natural Resources for an extension of the term of the reconnaissance licence in respect of all or part of the reconnaissance area. However, since July 2010, the Minerals Commission now generally declines applications to extend reconnaissance licences, based on the policy measure in question 10.

The holder of a prospecting licence may, at any time but not later than three months before the expiry of the initial term of the licence, apply to the Minister in the prescribed form for an extension of the term of the prospecting licence, for a further period of not more than three years in respect of all or any number of blocks that are the subject of the prospecting licence.

Also, the holder of a mining lease may, at any time, but not later than three months before the expiry of the initial term of the mining lease or a shorter period that the Minister of Lands and Natural Resources allows, apply in the prescribed form to the Minister for an extension of the term of the lease for a further period of up to 30 years in respect of all or any number of contiguous blocks that are the subject of the lease and in respect of all or any of the minerals subject of the lease.

A mineral right cannot, in whole or in part, be transferred, assigned, mortgaged or otherwise encumbered or dealt in without the prior written approval of the Minister of Lands and Natural Resources, whose approval should not be unreasonably withheld or given subject to unreasonable conditions.

Where the Minister does not give written approval within 30 days, he or she is required to give a written reason within 14 days of receipt of a request by the applicant for the reasons for refusal of the application.

Any dispute arising from a disagreement over the right to extend the term, transfer, assign, mortgage or otherwise encumber a mineral right will trigger the dispute resolution (alternative dispute resolution) provisions in the Minerals and Mining Act starting first with an attempt at an amicable resolution through mutual discussions.

What is the typical duration of mining rights?

A reconnaissance licence may be granted for a period not exceeding 12 months. It may be extended, if the Minister of Lands and Natural Resources is satisfied that it is in the public interest to do so, for periods not exceeding 12 months at a time. A prospecting licence may be granted for an initial term not exceeding three years and may be extended for a further period of not more than three years.

A mining lease may be granted for an initial period of 30 years or for a lesser period that may be agreed on with the applicant. It may be extended for a further period of up to 30 years. These extensions are also subject to the payment of applicable fees. Under the Minerals and Mining Act, mineral rights may be cancelled where the mineral rights holder:

• fails to make the required payment on the due date;
• becomes insolvent or bankrupt; or
• knowingly makes a materially false statement to the minister in connection with the mineral right.

The Minister of Lands and Natural Resources may cancel mining leases where the holder has, without good cause, failed to carry out its mining programme for two or more years.

Is there any distinction in law or practice between the mining rights that may be acquired by domestic parties and those that may be acquired by foreign parties?

Small-scale mining is reserved exclusively for Ghanaians. Beyond this, there is no distinction between the mining rights that may be acquired by domestic and foreign parties.

In the mining industry there is no requirement that a foreign party should have a domestic partner. However, the Ghanaian government, as per the Minerals and Mining Act, has a 10 per cent free carried interest in all mining undertakings, and retains the option to acquire an additional interest on terms to be agreed on by the private party and the government.

How are mining rights protected? Are foreign arbitration awards in respect of domestic mining disputes freely enforceable in your jurisdiction?

The independence of the judiciary is guaranteed under Ghana’s 1992 Constitution and mineral rights are subject to the processes of the courts.

There are also dispute resolution provisions under the Minerals and Mining Act, which make room for the application of internationally accepted rules in any dispute including the rules of procedure for arbitration within the United Nations (UN) Commission on International Trade Law rules. Foreign arbitration awards in respect of domestic mining disputes are freely enforceable in Ghana in accordance with Ghana’s Alternative Dispute Resolution Act 2010 (Act 798).

Also, the holder of a mining lease may enter into a stability agreement with the Minister, as part of the mining lease.

A stability agreement guarantees the holder of the mining lease that it will not be adversely affected by changes in the laws as existing at the time of entering into the agreement. Also, a stability agreement offers protection against additional obligations being imposed on the holder of a mining lease, by new laws or actions taken under those new laws.

Adverse changes specifically mentioned under the Minerals and Mining Act include:

• changes in the level and payment of custom duties or other duties required to be paid on imports;
• changes in the level and payment of royalties, taxes, fees and other fiscal imports; and
• changes in laws relating to exchange control, transfer of capital and dividend remittance.

The power of the Minister to suspend or cancel a licence is also limited.

What types of surface rights may mining rights holders request and acquire? How are these rights acquired? Can surface rights holders oppose these requests?

The grant of an application for a mineral right gives the mineral rights holder authority over the land and entitles the rights holder to enter the land subject of the grant. However, the scope of the rights holder’s authority over the land, with respect to surface rights, depends on the mineral right granted.

The holders of a reconnaissance and prospecting licences are permitted to enter the land and erect camps or temporary buildings. However, whereas holders of prospecting licences are permitted to make boreholes and excavations, holders of reconnaissance licences are prohibited from engaging in drilling or excavation.

Also, the holder of a prospecting licence may engage in any other activity ancillary or incidental to prospecting. With regard to mining leases, the holder of a mining lease has the right to erect equipment, plant and buildings for the purposes of mining, transporting, dressing, treating, smelting or refining the minerals specified under the lease and recovered during the mining operations.

The holder or a mining lease is also permitted to stack or dump mineral waste or product in accordance with its Environmental Impact Assessment approved by the Environmental Protection Agency and may conduct any other activity which is incidental or ancillary to the mining operations.

Under Ghanaian law, water resources are vested in the nation and not the owner of the surface right. Thus, the holder of a mineral right may require a water use permit to use a water resource within the area subject to the mineral right. Water use permits are issued by the Water Resources Commission. And, the water use permit issued will only grant the right to use the water for purposes ancillary to the mineral operations.

The holder or owner of surface rights is only entitled to an annual ground rent, compensation for disturbance of surface rights, or resettlement. A surface rights holder cannot object to the exercise of surface rights granted to the holder of a mineral right by the Minister. The law allows the mineral rights holder to pay fair, adequate and prompt compensation to the original surface rights holder if there is any disturbance to the surface rights of the owner.

The law requires that the mineral rights must be exercised in a manner consistent with the reasonable and proper conduct of the operations concerned so as to affect as little as possible the interest of any lawful occupier of the land in respect of which such rights are being exercised.

Also, the lawful occupier of any licensed area has the right to graze livestock upon or to cultivate the surface of such land insofar as such grazing or cultivation does not interfere with the mineral operations in the area.

However, where the mineral operations are to be conducted under a Mining Lease and the rights holder has demarcated a mining area within the leased area, the lawful occupier of land within the mining area cannot exercise any surface rights. The lawful occupier may only erect a building or structure within the mining area with the consent of the holder of the mining lease or the Minister.

Does the government or do state agencies have the right to participate in mining projects? Is there a local listing requirement for the project company?

The Minister of Lands and Natural Resources has the right to buy all minerals raised, won or obtained in Ghana and from any area covered by territorial waters, the exclusive economic zone or the continental shelf and products derived from the refining or treatment of these minerals before they are sold (the right of pre-emption). The government may, by an executive instrument, appoint a statutory body to act as its agent for the exercise of the right of pre-emption.

The government is entitled to a 10 per cent free carried interest in the rights and obligations of the mineral operations where the mineral right is for mining or the exploitation of minerals for which the government is not required to make any financial contribution. The government is not precluded from any other or further participation in mineral operation subject to the agreement of the holder. Also, the Minerals and Mining Act gives the Minister the right to require a mining company to issue shares in the company to the nation for no consideration. The rights attached to the shares is subject to agreement between the Minister and the mining company.

There is no special listing requirement for the project company.

Are there provisions in law dealing with government expropriation of licences? What are the compensation provisions?

Under article 20 of Ghana’s 1992 Constitution, no property of any description, or interest in or right over any property shall be compulsorily taken possession of or acquired by the state unless that possession or acquisition is necessary in the interest of public security, morality, law and order or other public benefit. And the necessity for the acquisition or possession is clearly stated in order to provide reasonable justification for ‘any hardship that may result to any person who has an interest in or right over the property’.

Article 20 further indicates that compulsory acquisition of property by the state can only be made under a law that makes provision for the prompt payment of fair and adequate compensation and the person adversely affected by such an action has a right of access to the High Court for the determination of his or her interest or right and the amount of compensation to which he or she is entitled.

As a measure against speculative holding of large areas of land, the law requires the holder of a prospecting licence, prior to or at the expiry of the initial term, to surrender not less than half the number of blocks (one block is 21 hectares) of the prospecting area as long as a minimum of 125 blocks remain subject to the licence and the blocks form not more than three discrete areas, each consisting of a single block or a number of blocks each having a side in common with at least one other block in that area. The Minister of Lands and Natural Resources may, based on a written request for relief, exempt a holder from the obligation to surrender land.

Are any areas designated as protected areas within your jurisdiction and which are off-limits or specially regulated?

Some restrictions exist regarding mining in forest areas and water bodies. Other regulators (the Forestry Commission and the Water Resources Commission) play a role in the granting of mineral rights for exploitation of minerals in those areas.

Otherwise, parties have the right to enter upon and erect camps or temporary buildings including installations and the necessary equipment on any land or in any waters that form part of the area licensed for the purpose of reconnaissance prospecting, mining, transporting, dressing, treating, smelting or refining the mineral recovered by him or her during the mining operations. The grant of the mineral right automatically entitles the holder of the rights to all these surface rights.