In a growing controversy surrounding the sale of the Bogoso-Prestea mines, the Ghana Mineworkers’ Union (GMWU) has strongly criticized former Minister of Lands and Natural Resources, Kwaku Asomah-Cheremeh, accusing him of inadequate due diligence during the approval process. This was revealed in an interview with The High Street Journal.
The union claims that Future Global Resources (FGR), the company that acquired the mines in 2020, was not financially sound at the time of the sale and that its inability to inject capital into the project has led to severe operational challenges and worker dissatisfaction.
When Golden Star Resources (GSR) sold its 90% interest in the Bogoso-Prestea mines to FGR, the deal was structured to relieve GSR of the financial burden of operating a struggling asset. The sale price of $55 million was spread over staged payments, with a $30 million initial payment that included $5 million in cash and the assumption of $25 million in negative working capital. Deferred payments of $10 million and $15 million were scheduled for 2021 and 2023, respectively.
However, FGR’s default on its $15 million payment by July 2021 raised alarms about the company’s financial viability. GSR contested FGR’s claims of set-off rights, and the failure to meet this financial obligation has since spiraled into a broader crisis.
During the interview with The High Street Journal, GMWU argues that these financial problems were predictable and avoidable, had the government conducted proper due diligence before approving the acquisition.
Mr. Abdul-Moomin Gbana, General Secretary of the GMWU, has been vocal in pointing out that FGR, a company incorporated in 2019 with limited experience in mining, was not in a strong financial position to manage such a large-scale operation.
The union contends that former minister Asomah-Cheremeh ignored multiple red flags about FGR’s financial capability and approved the sale without ensuring that the company had the resources to invest in and sustain the mines.
The approval, which was granted in September 2020, allowed FGR to take control of the mine. But the promised capital injections never materialized, leaving the mine in a state of neglect.
The financial strain has led to more than 400 workers going unpaid for months, prompting widespread protests from the workforce and the GMWU, who demand that the government revoke FGR’s lease.
The current Minister of Lands and Natural Resources, Samuel Abdulai Jinapor, has acknowledged the ongoing crisis, promising to work with stakeholders to revamp the Prestea mine.
However, progress has been slow, and the situation remains unresolved. GMWU, led by General Secretary Abdul-Moomin Gbana, has demanded immediate government action, warning that if the situation is not rectified, by revoking FGR’s lease and finding a more stable operator, they will be forced to take drastic measures.
The union has insisted that if no action is taken soon, they will mobilize and shut down mining operations at the site. This would have severe implications for both the local economy and the broader mining sector in Ghana.
