Gov’t Abrogates Akwatia GCD Contract with Jospong’s GCDGL

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The government through the Ministry of Lands has abrogated  the contract with Great Consolidated Diamond Ghana Limited, a subsidiary of Jospong Group of Companies.

In a letter at the disposal of the Evening Mail dated 10th June 2019 and signed by the Minister of Lands and Natural Resources,  KWAKU ASONAH-CHEREMEH, it stated that the mining lease of the company is cancelled in pursuant to section 68 of the Minerals and Mining Act, 2006 (Act 703).
“Please take note that the cancellation is without prejudice to any obligation or liabilities incurred by GCDCL in relation to the leases prior to the cancellation.” The letter added.

Notice to Remedy Breaches
The June 2019 letter follows a notice to remedy breach of Mining licence sent to the Management of GCDGL from the Ministry in December 2018.

In the Notice to Remedy Breach of Mining Licence letter also available to the Eveningmailgh.com, dated 12th December 2018 and signed by the Minister, the ministry said GCDCL has breached the terms of its six (6) mining leases that were granted on 31st December, 2012.

The letter stated that GCDCL owes the Minerals Commission an amount of US$7,705,600 in accrued mineral right fees which is a clear breach of Section 68 (1) (a) of the Minerals and Mining Act, 2006 (Act 703).
“The Company has been dormant for five (5) years and therefore has not been able to carry out its obligations including the production of diamonds required under Section 69 (1) (a) of the Minerals and Mining Act, 2006 (Act 703).” The letter said.

READ MORE:  MINISTER QUESTIONS THE CONTINUED OCCUPATION OF CONCESSIONS OF GCD BY GCDGL

The notice added that “GCDCL is hereby required to remedy the above-mentioned breaches within one hundred and twenty (120) days from the date of this notice.”
“Please take note that failure to satisfactorily remedy the breaches within the time specified in this yotice will result in the termination of the mining leases.” It said.

DIC Letter
Following the Ministry’s notice, the Divestiture Implementation Committee (DIC), through their lawyers on April this year also wrote to the management of the company to serve them notice to remedy the breaches.

In a letter from Cardinal Law Group, Lawyers for the DIC,  they stated that “this is to serve you notice that upon your persistent failure to remedy your default in settling your indebtedness arising from the non-payment of the balance of the total consideration due from you for the divestiture of the assets of the above company (GCD) to you, our client has instructed us to invoke Paragraph 13 of the offer letter dated May 6, 2011 with Reference Number DIC/119/01 to abrogate all agreements our client has with you on the subject.”

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Read Also: GALAMSEYERS TAKE OVER AKWATIA GCDGL

“As you are aware, your indebtedness in terms of the balance aforesaid as of 31st March 2019 stood at Eighteen Million, Eight Hundred and Forty Four Thousand. Fourteen Dollars and Forty Five Cents. (US$ 18,844,014.45).” The letter said.


Background
The Government of Ghana through the Divestiture Implementation Committee in 2011 sold the assets of the then Ghana Consolidated Diamonds Limited(GCD), which was then solely owned by the Government to the Great Consolidated Diamonds Ghana Limited (GCDGL) associated with Mr. Joseph Siaw Agyepong, of the Jospong Group of Companies.
The Government at the time entered into an Asset Sale and Purchase Agreement with GCDGL and as part of the terms of the said contract, the assets of GCD were sold to GCDGL for $17,000,000 upon certain terms and conditions.

Read also: Akwatia: Students digging ‘graves’ as punishment

However, as at 5th December, 2011 GCDGL only made part payment of $2,700,000 according to the sale contract executed by the parties.
GCDGL has since not made any payment to the government. As results of the fallouts from the inactions of the company’s non-performance, there has been joblessness, incessant school dropouts, petty thievery, prostitution among the youths, educational achievements in the district are relatively low, teenage pregnancies etc with several of the youth also running from the town making Akwatia a ‘ghost town’.
As at November last year, GCDGL owed electricity bill to GRIDCO to a tune of more than GHC5million ($1million) leading to the disconnection of power to the entire company and communities around.

READ MORE:  GRIDCo Restores Power to Akwatia GCD 

Caution
Meanwhile the Akwatia Development Association, a group that has been vociferous on the whole GCD Contract has cautioned the General Public to stop dealing with management of GCDGL following the aggregation of the contract.

Read also: AKDA SUPPORTS GCDGL BASIC SCHOOL

Speaking to us, vice Chairman of the group, Mr. Kojo Obeng Darko said ” we wish to inform the general public to be CAUTIOUS in their dealings with GCDL in as far as they relate to the mine and the Asset. This warning is necessary given that GCDL has recently been engaged in the activity of selling portions of lands within the cancelled mining leases to some individuals for illegal mining enterprises in contravention of the mining leases and the Agreement with the Government and at a time when GCDL knew that the Government had served it notice of its intention to cancel the mining leases.”

Source: Eveningmailgh.com

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