Investors urge Ghana to address alleged unlawful expropriation of gold mine assets
Future Global Resources Limited (FGRL) and Blue Gold Holdings Limited (BGHL) have issued an urgent appeal to the government of Ghana over what they describe as the unlawful expropriation of their investments in the Bogoso Prestea Gold Mine.
Through their legal representatives, Mayer Brown International LLP, the investors allege significant breaches of the UK-Ghana Bilateral Investment Treaty (BIT) and have called for immediate settlement discussions to prevent the escalation of the dispute.
In a detailed letter addressed to Ghana’s Attorney General, Godfred Yeboah Dame, the investors accuse Ghana of failing to respond to earlier requests for amicable settlement discussions.
They claim that the government has taken actions that exacerbate the dispute, including allowing unauthorised parties to extract and sell valuable gold tailings from the mine. These activities, according to FGRL and BGHL, have caused millions of dollars in losses.
The investors also allege that Ghana has illegally transferred ownership of the mine and associated mining leases to an unrelated third party in violation of both Ghanaian law and international treaty obligations.
Mayer Brown’s letter condemns these actions, citing breaches of provisions under the UK-Ghana BIT, including the obligation to provide fair and equitable treatment and protection to foreign investments.
Calls for Immediate Action
The investors have requested Ghana to:
- Take immediate steps to safeguard their assets and prevent further illegal activities at the mine.
- Engage in urgent discussions aimed at reaching an amicable settlement.
Failure to address these demands by 14 January 2025, the investors warn, will lead to the initiation of international arbitration proceedings under Article 10 of the UK-Ghana BIT. This could potentially result in Ghana being held liable for significant damages.
The letter highlights potential consequences for Ghana’s international standing, including possible scrutiny by the World Bank. The investors referenced World Bank guidelines, which urge member countries to resolve disputes over expropriations to avoid adverse impacts on their creditworthiness and eligibility for new loans.
Legal and Diplomatic Responses Awaited
Copies of the letter have been sent to key stakeholders, including President Nana Addo Dankwa Akufo-Addo, the Minerals Commission, and international diplomatic representatives, such as the British High Commissioner to Ghana and the US Ambassador to Ghana.
Mayer Brown’s letter concludes with a call for the Ghanaian authorities to protect the investors’ rights and engage in good-faith negotiations to resolve the dispute.
As of now, the Ghanaian government has not issued a public response.
The Lands and Natural Resources Minister, Samuel Jinapor however, has okayed the transfer of the Mine to Heath Goldfields Ltd.
This development follows a recommendation from the Minerals Commission based on what it said is the company’s demonstrated technical and financial capacity.
The approval, outlined in a letter dated November 12 from the Ministry to the Chief Executive Officer of the Minerals Commission, underscores the government’s commitment to revitalising the mine, which has faced operational and environmental challenges in recent years.
Revitalising the Mine
The ministry has emphasised the importance of this acquisition in securing the employment of mine workers, reviving local economic activities, and preventing potential environmental degradation from prolonged inactivity. In the letter, the ministry directed the Minerals Commission to expedite the process, ensuring compliance with all legal requirements to facilitate the transfer.
“This decision reflects the government’s focus on preserving livelihoods and fostering development in mining communities,” the letter stated, highlighting the national significance of
Local stakeholders, including mine workers and residents of the surrounding communities, are optimistic about the mine’s revival. The Prestea Bogoso Mine has historically been a vital economic pillar in the region, providing employment and contributing to local development.