24/10/2025
On October 22, The Republic published a story detailing adverse audit findings on the operation of Gach Mining Company Ltd. The company runs a revenue sharing mining operation with the Gambia government where it takes 40% of net profit. At the time of the publication, our reporter did not receive a response from the company. But GACH later brought it to her attention that the email was, in fact, sent and forwarded it to her. While we have adjusted the story with their comments, we are also sharing the entire question and answer here below:
1) Auditors have found that despite the gross cost of metric ton of mineral sand increasing from $125 to $133, the sales price has never remained unchanged since 2017. This increase should affect the government’s 60% share but it has remained the same. Could you please comment on this?
Our sales are based on what is called an offtake contract where we enter into an agreement with a buyer for a fixed quantity of minerals at a fixed price in order to guard against price volatility. During the period in question the gross costs of mining saw an increase connected to fuel prices which led to an increase from around $125 to $133. This negatively impacted Government's revenue but maintained the floor price of $40 contained in the licence. In the subsequent years of 2023 and 2024, we adjusted our operations by cutting production expenditure and that led to a drop in cost and increase in government revenue to an average amount of $45 per ton. The government's 60% share was not therefore unchanged.
2) Also in 2021, your company exported 621 containers, equivalent to 18, 494 metric tons of black sand. Based on your agreement with the government, their share would be $832,253. The bank statement seen by auditors show that you only paid $739, 818, meaning $
92, 435 of royalties remain unpaid. Could you please comment on this?
This was perfectly explained to the auditors but they went ahead to publish their report with the erroneous interpretation. The revenue cannot be calculated by comparing the amount of HMC shipped in a Calendar year with the revenue for that calendar year. Revenue overlaps. For example HMC shipped between September to December may only be paid for between January to March of the next year. The auditors needed to look at explanation notes which accompanied each bank transfer to determine to what payment this transfer corresponded to. Furthermore in some instances they calculated the revenue based on a fixed price of $125 failing to take into consideration the fact that the licence provides that the cost may vary as far as the floor price of $40 is maintained. The only instance in which the company has to notify the department is if any increase in cost is such that the government's share will be below the floor price of $40 and this has never occured.
3) In 2022, 659 containers of 17,687.15 tons of black sand was exported by your company. The $832,253.85 to be paid to the government was delayed for two consecutive years. Could you comment on this?
In this period 4 transfers were made to the CBG account all of which bounced. Several communications were made to the Department of Geology and meetings were held with the Ministry of Finance and Economic Affairs, and the accountant General to resolve this issue with the USD denominated bank account the Royalty payments were to be made. During this period we provided constant updates on shipments and Government share of revenue and even made a proposal to pay in Dalasi since the Dalasi is the legal tender and given that there were protracted issues with the USD account. I am not sure if this information was provided to the auditors but when the issue was finally resolved and the go ahead given for us to pay in Dalasi, we paid at the current central bank rate which was higher than when the payments would have been due ensuring that there was no loss to Government.
4) Auditors also found that you have failed to pay the $100,000 to the Geological Department for training and institutional support for three consecutive years (2021, 2022 and 2023). This is a total of $300,000 not paid by you or remain unaccounted for. What do you say to this?
The Licence requires that we make a payment of $100,000 each year into a bank account managed directly by Geology. Due to public finance control regulations, this could not be possible. Instead the department made direct requests to us and we covered the Training and Institutional support expenses directly from an account into which we lodged these funds, with the remainder carried over to the next year. We have never failed to meet a request for T&IS and in fact as we speak have always met 100% of the requests for each year including annual expenses of over $200,000 in certain years based on the carried over balances.
“There is a risk that the proportion of revenue remitted to the government of the Gambia is understated since no control is in place to monitor or confirm