By Kwame Kyei Addo
Kwame Kyei Addo, CertIOSH
Prestea-Himan, Ghana
|Email:addokwamekyei@gmail.com| |Tel: +233 546751008|
05/03/2025
HIS EXCELLENCY THE PRESIDENT
THE REPUBLIC OF GHANA
JUBILEE HOUSE
ACCRA
Your Excellency,
SUBJECT: URGENT APPEAL FOR GOVERNMENT INTERVENTION IN THE DISPUTE OVER THE BOGOSO-PRESTEA MINING LEASE.
I write as a concerned citizen, deeply troubled by the ongoing legal and operational challenges facing the Bogoso-Prestea Mine, which has rendered the mine non-operational for the past eighteen (18) months. The situation, which has resulted in a protracted legal dispute between Future Global Resources (FGR), Blue Gold, and Heath Goldfields Ltd., has cut off the livelihood of workers due to unpaid salaries, and causing severe deterioration of the Mine infrastructure and environmental devastation.
FGR believes their leases have been unfairly terminated and that the legal process that led to the assignment of the mining lease to Heath Goldfields was unjust. These claims have resulted in multiple court actions against the Government of Ghana, the Minerals Commission, Ministry of Lands and Natural Resources and Heath Goldfields as an interested Party. This conflict, combined with the failure of operations under FGR and the subsequent transition to Heath Goldfields, has created a scenario where the mine is effectively at a standstill, leaving workers and the broader community in dire circumstances. I therefore respectfully request your urgent intervention to help resolve this matter for the good of all involved.
BACKGROUND
Future Global Resources (FGR) acquired the Bogoso-Prestea Mine from Golden Star Resources in October 2020 , but due to a series of operational and financial challenges, the company became insolvent. The financial distress of FGR, combined with its failure to meet key obligations, led to widespread dissatisfaction among the mine workers and the Regulators. The workers due to delays in salary payments, unaddressed provident funds, bonuses, lack of provision of basic safety requirement and deteriorating working conditions organized demonstrations to protest for the termination of the mining lease of FGR and reassign to a much more credible investor.
In light of these concerns, the Minister of Lands and Natural Resources intervened, giving FGR a 120-day ultimatum on 14 August 2023 to address several breaches of the mining lease. After the expiration of this initial period the Minister extended the deadline by a further 120 days on 17 April 2024, giving FGR additional time to remedy the situation. Despite these efforts, FGR was unable to resolve the breaches or improve the situation, which ultimately led to the termination of its mining lease.
After the termination, the Former Minister of Lands and Natural Resources (Hon. Samuel Abu Jinapor) on the 12 November 2024 approved the recommendation of the Minerals Commission to reassign the lease to Heath Goldfields Ltd., following proven financial and technical capability. This was to allow the new operator to revitalize the mine and resume operations. However, FGR and its Partner, Blue Gold, strongly contested this decision. They filed legal actions against the government’s decision, challenging the termination and the reassignment of the lease. They argue that the termination was unfair and arbitrary, and they are seeking to overturn the decision through the courts. These ongoing legal proceedings are delaying the resumption of mining activities, creating further instability and uncertainty on the mine.
The workers of the Bogoso-Prestea Mine continue to suffer, as they have been left without income for over 15 months, with no resolution in sight. The mine infrastructure is deteriorating, the underground mine is severely flooded, and illegal “galamsey” activities have taken over the mine, further damaging the environment. The community’s economic stability is at risk, and the national interest is being compromised.
LACK OF OFFICIAL RECOGNITION OF HEATH GOLDFIELDS LTD.
One critical issue that has compounded the current instability is the lack of official recognition of Heath Goldfields Ltd. as the legitimate and authorized operator of the Bogoso-Prestea Mine. The government’s failure to formally recognize Heath Goldfields as the operator of the mine has left the situation in a state of uncertainty, contributing to confusion among the workers, and other stakeholders.
This lack of recognition has significant legal and operational implications as Heath Goldfields is not officially recognized as the legitimate leaseholder or operator by the state. This ambiguity in government recognition has degenerated into various parties questioning the legitimacy of Heath Goldfields.
In Ghana, we have seen precedents in similar cases where official recognition has been critical for the smooth transition of ownership and operational control. Few are stated below for your reference.
Barari DV Ghana Limited – Ewoyaa Lithium Project:
In October 2023, the Minerals Commission granted a 15-year mining lease to Barari DV Ghana Limited, a subsidiary of Atlantic Lithium Limited, for the exploitation of lithium in the Ewoyaa. This marked Ghana’s first lithium mining lease. The Commission publicly affirmed Barari DV Ghana Limited as the rightful leaseholder, emphasizing the lease’s alignment with Ghana’s new policy framework for green minerals.
Granting of Mining Lease to Takoradi Gold Ghana Limited (TGGL):
On January 13, 2020, the Government of Ghana through the former Minister of Lands and Natural Resources Hon. Kwaku Asomah Kyeremeh publicly issued a letter granting a 15-year mining lease to TGGL.
Cardinal Namdini Gold Project – Takeover by Shandong Gold (2021–2022):
After the acquisition of Cardinal Resources by Shandong Gold, the project’s status and development drew national interest. The Minerals Commission and the Ministry of Lands and Natural Resources issued statements confirming the new ownership and endorsed the project’s progress.
GOVERNMENT’S ROLE IN ADDRESSING THE INABILITY OF HEATH GOLDFIELDS TO OPERATE THE MINE
In addition to the ongoing legal challenges, it is essential to acknowledge that Heath Goldfields, the newly assigned operator, is currently unable to demonstrate financial commitment to operating the Bogoso-Prestea Mine. They have failed to make the necessary investments to ensure that mining operations resume effectively. Heath Goldfields have publicly stated that their inability to invest in the mine and settle the outstanding entitlement due to workers are due to the continued legal actions being taken by FGR and the warning letters sent to their Business Partners, which have created a climate of uncertainty.
This situation has significantly undermined the confidence of the workforce and left the mine infrastructure in a state of disrepair. The workers, who have been enduring months of unpaid salaries, and deteriorating working conditions, have now expressed their growing frustration with Heath Goldfields as well. The workers are caught in the middle of a legal tussle and a lack of operational clarity, leading to growing dissatisfaction with the new management and a general sense of betrayal.
Given the precarious situation at the mine, the government’s intervention becomes even more urgent. It is crucial that the government facilitates the resolution of the legal disputes while also ensuring Heath Goldfields meets its financial obligations and takes immediate steps to address the mine’s operational needs. Furthermore, it is reported that FGR has initiated international arbitration proceedings against the state, claiming damages of $1 billion. This could result in significant financial repercussions for the government and a dent in the country’s mining sector internationally if left unresolved. The potential for an arbitration ruling that favors FGR highlights the urgency of addressing the dispute in order to protect the state’s financial interests and avoid escalating the situation further.
INTERNATIONAL CONTEXT AND LESSONS
Governments worldwide have faced similar situations where mining leases were terminated and reassigned to new operators, resulting in legal challenges from the affected parties. In many cases, governments have played a key role in facilitating negotiations to resolve these disputes. Below are three examples—starting with a Ghanaian precedent—that could guide the way forward however it may not mirror the exact situation for issues surrounding the Bogoso-Prestea Mining Lease.
Ghana – Resolute Mining Lease Termination and Reinstatement:
In 2016, the Government of Ghana terminated the mining lease of Resolute Mining at the Bibiani Gold Mine due to alleged non-compliance with regulatory obligations. Resolute contested the termination, arguing that it was arbitrary and without due process. Unlike many international disputes, the matter did not escalate into prolonged litigation. Instead, after further review and engagement, the government reversed its decision and reinstated the mining lease. This case illustrates that governments can reverse a termination where appropriate, without years of court battles, thereby ensuring continuity and fairness.
Guinea – Bauxite Lease Termination and Reassignment:
The government of Guinea terminated the lease of Bellzone Mining for a bauxite mine due to the company’s inability to meet financial obligations. The company contested the decision, claiming unfair treatment, but the government facilitated negotiations with a new operator to ensure the mine’s operation continued without major disruption. Compensation was provided to Bellzone as part of the settlement, allowing the new operator to resume work with the aim of improving the national mining sector.
Papua New Guinea – Ok Tedi Mine:
When BHP Billiton exited the Ok Tedi Mine following environmental and operational concerns, the Papua New Guinea government took over the management of the mine through a state-owned company. BHP contested the decision under international law, but the government negotiated with the company to reach a compromise that allowed the mine to continue operations under new management. This settlement included environmental restoration commitments and long-term profit-sharing for the local community.
Zimbabwe – Zimplats Indigenization and Lease Transfer:
The Zimbabwe government required Zimplats, a platinum mining company, to comply with indigenization laws. Zimplats resisted the government’s directives and filed legal challenges to the nationalization measures. The dispute culminated in the reassignment of mining operations to local stakeholders and an agreement that resulted in a revised ownership structure, which allowed continued operations under the new legal framework, including compensation for the previous owners and integration of local communities into the mining process.
RECOMMENDATIONS FOR GOVERNMENT INTERVENTION
In light of the ongoing legal and operational challenges, I respectfully propose the following measures for government intervention to bring this situation to a fair and just resolution:
Government Mediation and Facilitation of Dialogue:
The government should appoint a neutral Mediator to facilitate a fair and constructive dialogue between FGR, Blue Gold, Heath Goldfields, and all relevant stakeholders. The goal should be to resolve the legal dispute swiftly and allow mining operations to resume, benefiting the workers and local communities.
Fair Arbitration for FGR and Blue Gold (if applicable) and Vice-Versa:
If FGR and Blue Gold have valid claims of unfair termination, the government could facilitate a fair arbitration processes with the aim of resolving any legal grievances as seen in international examples such as Guinea and Papua New Guinea.
State Takeover of Mining Operations as a Resolution Mechanism
In light of the ongoing disputes surrounding the Bogoso-Prestea Mining Lease, I recommend that the Government of Ghana considers the option of a state takeover of the mining operations as a strategic and temporary measure to ensure continuity and protect national interests.
Lease Splitting or Joint Venture (JV) as a Strategic Option for Dispute Resolution in the Bogoso-Prestea Mining Dispute:
In light of the ongoing legal dispute over the Bogoso-Prestea Mine between Future Global Resources (FGR), Blue Gold, and Heath Goldfields Ltd., the Government of Ghana may consider lease splitting or Joint Venture between Potential Investors. This approach involves dividing the existing mining leases among the disputing parties in a manner that allows each party to operate specific parts of the concession or merging companies to operate the lease subject to compliance with regulatory and operational standards. The contextual Basis for Lease Splitting or Joint Venture is based on the fact that, the Bogoso-Prestea Mine comprises multiple distinct mining leases, including:
Mining Lease Lands Registration No.
Bogoso I & II LVDWR8T363228A2020
Prestea Underground 2799/2001
Prestea Surface 3186/2001
Mansiso LVB/1802/98
Manpong LVDGAST291132016
Clarification of Heath Goldfields’ Status:
The government must officially recognize Heath Goldfields as the legitimate operator of the Bogoso-Prestea Mine. The failure to do so is causing uncertainty in the industry and undermining efforts to revitalize the mine. This should be resolved urgently to provide stability to all stakeholders.
Addressing Environmental Risks and Illegal Activities:
Immediate steps should be taken to prevent further environmental damage caused by illegal “galamsey” mining activities on the site. A clear action plan to address flooding, infrastructure deterioration, and other environmental concerns must be put in place.
Expediting the Ratification of Mining Leases:
The government should ensure that the necessary mining leases are ratified promptly, following the legal process, to avoid further disputes and delays in the resumption of operations. This is pursuant to Article 268(1) of the 1992 Constitution of Ghana and section 5(4) of the Minerals and Mining Act, 2006 (Act 703).
Payment of Outstanding Wages and Benefits to Workers:
The government must ensure that the Holder of the Mining Lease, or any responsible Party addresses the long-standing arrears owed to workers, including unpaid salaries and other entitlements. Workers have been severely affected, and their rights should be prioritized.
Ensuring Future Stability through a Robust Policy Framework:
The government should introduce a more robust and transparent policy framework for handling disputes in the mining sector. Lessons from international cases can inform this framework to avoid similar situations in the future.
CONCLUSION
The ongoing dispute at Bogoso-Prestea Mine is a national issue with far-reaching consequences for the economy, the workers, and the local communities. The government must act swiftly to mediate, resolve the dispute, and ensure that the workers are compensated and the mine is restored to full operation.
I trust that your leadership will ensure that this issue is resolved in a manner that benefits all parties, especially the workers, the investor community, the local communities, and the national interest.
These are my independent thoughts. Thank you for your attention to this pressing matter.
Yours sincerely,
………………….
Kwame Kyei Addo
Cc:
Minister of Lands and Natural Resources
The Attorney General and Minister of Justice
CEO Minerals Commission of Ghana.
The Member of Parliament-Prestea Hunivalley Constituency.
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