Ghana Tightens Mining Rules, Ends Long-Term Stability Pacts and Plans Higher Royalties

Ghana’s government has announced a major overhaul of the mining sector that will scrap long-term stability agreements for mining companies and significantly raise royalty charges as part of efforts to capture greater value from booming gold prices, officials and industry sources said on Monday.

The reforms, outlined by Isaac Tandoh, acting chief executive of Ghana’s Minerals Commission, include phasing out multi-year investment guarantees and introducing royalty rates that could rise to 12% if gold prices hit certain thresholds, roughly double the current range. The moves are intended to ensure that more of the profits from the world’s sixth-largest gold producer benefit the domestic economy.

Under the new framework, companies previously operating under stability and development agreements which lock in tax and royalty terms for periods of five to 15 years will see those arrangements end as they lapse. The changes are expected to be enshrined in a bill set to be presented to Parliament by March.

Ghana has been a leading destination for foreign investment in mining for decades, with major firms such as Newmont, AngloGold Ashanti and Gold Fields holding stability agreements that encouraged capital inflows in exchange for predictable fiscal terms. Officials said the new rules will also include tougher local content requirements to boost the participation of Ghanaian suppliers and businesses.

While some investors have expressed concern about the potential impact on future investment decisions, regulators insist the measures balance investor confidence with national interests, noting that mining sectors elsewhere operate under similar or more stringent conditions.

SOURCE: Reuters