Ghana and the European Union (EU) on Monday signed a 320 billion-cedis (40 million Euros) agreement that would assist the mining sector to attract investment so as to regain its economic importance as a major foreign exchange earner for the country.

The contract signed under the Mining Sector Support Programme is aimed at increasing private sector-led exploration activities and investments in mining through the strengthening the sector's regulatory and support agencies.

It is also to make available funds for feasibility studies on improving the Takoradi Port and connecting railway lines. It would in addition provide resources for geological data collection and dissemination, a nationwide socio-economic and environmental impact assessment of large scale mining in order to help mitigate the adverse environmental effects of mining, especially mercury pollution, in small-scale mining.

The Minister of Finance, Mr Yaw Osafo-Maafo signed on behalf of Ghana and Mr Poul Nielson, European Commissioner for Development and Humanitarian Aid, initialed for the EU.

Under the terms of the agreement the Ghana government would have to continue with the programme of re-organising the mining sector, revising the legal framework for the mining sector, including a new mining code, and providing adequate resources to Mining Sector Institutions.

Mr Osafo-Maafo said the various activities lined up in the agreements tied in with government's programme to sustain the mining sector's contribution to the overall improvement in the performance of the national economy.

"Government has identified the discovery of new mineral resources, the gradual replacement and diversification of presently exploited ores as part of its strategies to help alleviate poverty by increasing employment and incomes of people in the mining areas," he said.

The Minister appealed to the EU to ensure that equipment was provided in efforts to build the capacity of institutions under the programme. "In addition where studies are proposed, we need to ensure that studies are conducted as joint effort between foreign and local consultants."

Mr Osafo-Maafo expressed the hope that the EU would adopt simplified procedures to ensure the timely release of funds for the implementation of the programmes. Mr Nielson stressed the need for a review and modernisation of Ghana's mining code, saying it did not compare well with similar codes in other investment destinations.