Chinese firm Shaanxi sued by Ghanaian partners as it attempts to expand
The decision of a Chinese-owned company that has operated as a mine support service provider in Ghana for about 12 years, Shaanxi Mining (Ghana) Ltd, to go into large-scale mining following the termination of their service registration permit by the Minerals Commission, has been dealt a legal impediment.
A directive by the commission ordered the company to vacate the mining sites of its local business partners in the Upper East Region as a result of the coming into force, the Minerals and Mining Regulations, 2020 (L.I. 2431).
The local content and participation regulations have reserved contract-mining services for small-scale mining operations for Ghanaians.
To this end, the company in a response to the commission’s directive that came in August this year, said it would cease operation as a mine support service by September 1, 2021.
“Shaanxi intends to do the new business under a new name – Earl International Group (GH) Gold Mining Limited,” the company indicated.
This new venture is however facing a challenge as the company has disclosed that, “at present, Shaanxi and Yenyeya are locked in a serious legal battle at the High Court One in Bolgatanga, the Upper East regional capital.”
According to the company, a clash between the two partners erupted after Yenyeya’s Ghanaian Managing Director (MD), Charles Taleog Ndanbon, learned that the Chinese partner had planned to acquire licence and permit for the sought-after large-scale mining business.
In addition, the company had intended to end their partnership with him and to take over his concession and some nearby concessions.
Due to this, the Yenyeya MD headed to court, praying the court to declare that Shaanxi had breached the agreement it had with Yenyeya.
He also wants the court to call for the appointment of “an independent professional auditor to audit the mining operations and other related activities carried out from 2008 to date inside the Yenyeya Mining Company’s concession.”
Mr Ndanbon, also wants the court to place “a perpetual injunction, stopping Earl International Group (GH) Gold Mining Limited from doing mining and related activities in his concession and from entering the concession until the case is over,” the company said.
Out of court settlement
Months ago, the lawyers for the Chinese company told Justice Charles Wilson Adjei’s High Court One that they wanted the matter settled outside the courtroom.
The out-of-court settlement process, being facilitated by the Upper East Regional Minister, Stephen Yakubu, saw the representatives of the Chinese company absent in the first meeting, according to Yenyeya’s Public Relations Officer, Jarvis Avoka, in a press statement.
The mediation efforts arrived at a decision in a subsequent meeting (the Chinese company represented this time) to have the company’s years-long activities independently audited.
The two parties are scheduled to appear again in court on Tuesday, October 12, 2021.
Minerals Commission withdraws Shaanxi’s licence
Per the directive, which was issued last month, the firm was to vacate the Yenyeya Mining Group and Pubortaaba Mining Group, both at Gbane in the Upper East Region, with immediate effect.
“Unfortunately, the Commission cannot continue to renew your company’s registration because of the coming into force of the Minerals and Mining (Local Content and Local Participation) Regulations, 2020 (L.I. 2431).
We are therefore by this letter withdrawing your registration as a mine support service company with effect from the date of this letter, a letter, signed by the Acting Chief Executive Officer (CEO), Martin Kwaku Ayisi, stated.
The Commission advised the company to arrange to demobilise from the sites of the two small-scale mining licence holders with immediate effect,” the one-page letter, signed by Mr Ayisi, said.
The company has been providing contract mining services to Yenyeya Mining Group and Pubortaaba Mining Group, which are located at Gbane in the Talensi District of the Upper East Region, since 2009.
The Minerals Commission explained that even in the period after 2012, it continued to renew the company’s registration because of Regulation 2(3) of the Minerals and Mining (Support Services) Regulations, 2012 (L.I. 2174).
However, the letter, which was sighted by The Ghana Report on Thursday, September 23, said, the renewal could no longer be done due to the local content and local participation regulations.