Ghana Manganese Company (GMC) has terminated an equipment hire contract at the Nsuta manganese mine in Ghana with Perenti subsidiary African Mining Services (AMS).
Initially, the temporary suspension of the contract was announced by Perenti earlier this month following news of severed contracts at two of its Burkina Faso mines after a security incident.
GMC advised that the announcement reiterates that AMS’ performance is unrelated to the contract’s end and is due to the Ghanian Government directing GMC to cap production.
AMS and GMC are continuing to engage in plans related to outstanding payments owed under the terminated contract.
The next steps are in motion, with AMS’ equipment being deployed at Nsuta and to be used at existing projects, held for deployment or sold to third parties.
Perenti has multiple sites in West Africa that could potentially use the equipment, including the $235 million contract at West African Resources’ Sanbrado gold project and the 12-month extended contract at AngloGold Ashanti’s Iduapriem gold mine in Ghana.
Perenti managing director Mark Norwell said the contract termination was an isolated incident and that it had no bearing on the strategic initiative under way to transform AMS under the company’s 2025 strategy.
“The termination at Nsuta and its earnings impact is disappointing. However, it is an isolated incident driven by circumstances specific to GMC,” Norwell said.
“I stress that the termination in no way reflects AMS’ performance at the project, and the termination notice specifically thanked AMS for its ‘outstanding services.'”
Norwell said that the termination freed up capital that AMS could use to service new contract wins and extensions announced earlier in the month.
“Although our surface mining business in Africa is facing some challenges, the balance of the business continues to perform well and provides a strong base from which to execute our strategy,” Norwell said.