April 2, 2025
We have read and heard calls for banning mining operations in Ghana, as a step towards protecting the environment against the damage caused by illegal mining. In this article, we discuss the legal consequences of such a ban and recommend that the focus instead should be on enforcing the existing ban on illegal mining.
1. BREACH OF THE LAW
Banning legal mining without evidence of violations by legal miners would be a legal breach, as the Minister's power to suspend or revoke mineral rights is clearly defined and limited by law. For instance, in REPUBLIC v HIGH COURT, GENERAL JURISDICTION (6) ACCRA EX PARTE: ATTORNEY-GENERAL [EXTON CUBIC GROUP LTD – INTERESTED PARTY] (2019) the Supreme Court acknowledged the Minister's authority to revoke a mineral right if the statutory and constitutional procedures for granting mineral rights are not followed.
Terminating for Breach
Further, both the Minerals and Mining Act, 2006 (Act 703) and the Minerals and Mining (Licensing) Regulations, 2012 (LI 2176), empower the Minister to suspend or cancel a mineral right upon recommendations of the Minerals Commission (MinCom), if the holder (i) fails to pay fees, (ii) becomes insolvent, (iii) makes false statements, (iv) is convicted of smuggling or illegal mineral dealing, or (v) fails to conduct operations in accordance with the approved work programme.
In these scenarios, the Minister must notify the holder of the breach and allow a minimum of 120 days (for mining leases) or 60 days (for other mineral rights) for the holder to address the breach. If the breach is not resolvable, the lessee or licensee must provide to the Minister justification against suspension or cancellation. MinCom will then review the holder’s response and if the holder does not remedy the breach, or does not respond, or the response is invalid, recommend suspension or termination. Similar termination requirements exist for small-scale mining licences.
Thus, while the law permits termination for the acts of holders, we have not found any provision that permits the Minister to ban legal mining operations because of the illegal acts of persons other than the right holder, for example, illegal miners. It therefore appears to us that the stated breaches of the law, constitute conditions precedent to exercising the ministerial power to terminate. Thus, the minister must be satisfied that those conditions indeed exist before he may exercise that power; otherwise, he would be held to have acted prematurely and arbitrarily.
Public Interest Termination
Act 703 also allows the Minister to revoke small scale mining licences if the licensee has violated the conditions of the licence, or it is in the public interest to do so. Public policy reasons for revoking artisanal mining licenses will likely involve remediable breaches, such as environmental degradation. Revocations in the public interest due to licence holder breaches must therefore follow the processes outlined above. Outright revocation should only occur as a result of circumstances beyond the licence holder's control.
‘Public interest’, is defined in the Constitution as including ‘any right or advantage which ensures or is intended to inure to the benefit generally of the whole of the people of Ghana.’
The High Court identified, in CENTER FOR PUBLIC INTEREST LAW & ANOTHER v TEMA OIL REFINERY (2007), that based on this definition, matters of environmental pollution trigger public interest concerns. We therefore think that widespread environmental damage from mining would raise public interest concerns and may justify the Minister revoking small-scale licences.
However, any court reviewing such a decision will carefully consider the balance between the State's interest and the citizens' obligations. The Supreme Court identifies three grounds for judicial review: (i) illegality, (ii) irrationality, and (iii) procedural impropriety.
The ‘Illegality’ ground requires the decision-maker to accurately understand and apply the relevant law. The ‘Irrationality’ ground applies when a decision is so illogical or morally unacceptable that no reasonable person could reach it after proper deliberation. The ’Procedural Impropriety’ ground requires the decision maker to observe the procedural rules that are expressly laid down in the law by which the jurisdiction is conferred.
The Minister's blanket revocation of small-scale mining licenses could therefore be validly challenged as being irrational and/or illegal. The key question would be whether the Minister’s action could be justified without evidence of environmental harm from the affected right holder(s). Even if such evidence exists, the law requires the Minister to first allow offenders to rectify breaches before imposing penalties like suspension or cancellation. A mass revocation would be unreasonable, unfairly punishing innocent miners for the government’s own failure to enforce environmental regulations.
Another practical consideration of revoking all small-scale mining licences is that it would affect only Ghanaians (who are the only people allowed to have such licences), allowing only foreign-owned mines to continue operating.
2. BREACH OF AGREEMENTS
A ban on legal mining would breach licences, leases and stabilisation agreements entered into with large scale mines. Act 703 allows for a stabilisation agreement with a mining lessee, and freezes existing law and state of affairs for 15 years. Thus, a ban on mining may violate existing stabilisation agreements, and trigger expensive arbitral proceedings against Ghana and the likelihood of paying huge sums in damages. Shutting down all mines would lead to several other challenges, including:
- labour issues from mine closures, requiring either continued payment of employee salaries for no work or redundancy packages;
- disruptions to subcontracts with support service contractors;
- difficulties in repaying loans to banks; and
- loss of investment, potentially violating international investment laws and contracts with mining companies.
These contractual breaches cannot be excused by the country’s failure to enforce its laws and would not stand in any judicial or arbitration proceedings. However, the Government could very well decide to ‘bite the bullet’ and shut the mines down, prepared to pay whatever damages may be awarded, if it considers that that is a price worth paying to deal with the current situation.
CONCLUSION
We therefore do not recommend an outright ban on all mining operations, as it would lack legal basis, unless the government is prepared to shoulder the expected huge judgment debts or arbitration awards that the ban would trigger. Instead, we recommend that the government should focus on enforcing the existing ban on illegal mining and addressing environmental violations instead.
Given the seriousness of the situation, the Government could freeze issuing new small-scale mining licenses and refrain from renewing expired licenses until order is restored in the industry. Additionally, Parliament may opt not to ratify new licences, as mining should not commence without this approval. These steps would be legally sound, but only as temporary measures as we find ways to properly enforce the existing and any new regulations.
