Ghana Mining Law Revamp Could Complicate Gold Fields’ Lease Renewal

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessGhana Mining Law Revamp Could Complicate Gold Fields' Lease RenewalGhana is preparing its first sweeping overhaul of mining legislation in two decades, slashing the length of time companies can operate mines in Africa’s largest gold producer without renewing their rights.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.Gold Fields Ltd. mine in Tarkwa, Ghana, on Thursday, Oct. 17, 2024. Photo by Francis Kokoroko /Photographer: Francis Kokoroko/B(Bloomberg) — Ghana is preparing its first sweeping overhaul of mining legislation in two decades, slashing the length of time companies can operate mines in Africa’s largest gold producer without renewing their rights.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe draft law, approved by cabinet and expected to be submitted to parliament in the coming weeks, would limit mining lease renewals to a maximum of 10 years, people with knowledge of the matter said. The current law allows for a 30 year extension.If approved, the new rules could stymie plans of companies including Gold Fields Ltd., which has its biggest mine in the West African nation. The South Africa company in November applied for a 20-year extension of its leases, which expire in April 2027, at the Tarkwa mine. The operation produced 475,000 ounces of the precious metal in 2025, or nearly a fifth of the company’s combined output.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe country’s current mining law has been in place since 2006.If enacted, the new rules will also reduce the maximum term for new mining leases to 20 years from 30 years, the Ministry of Lands and Natural Resources said in a statement on its website. A spokesperson at the ministry declined further comment.“There has not been a compelling evidence-based case demonstrating that Ghana’s mining regime required such an aggressive overhaul,” said Benjamin Boakye, executive director at Africa Centre for Energy Policy. “The challenge is not simply to extract more fiscal value from the sector, but to optimize mining’s overall contribution to the economy while preserving the country’s competitiveness as an investment destination,” he said.Ghana is pushing to benefit more from high bullion prices and increase the participation of local firms in its gold industry. Earlier this year, the government hiked royalties on the precious metal to as much as 12% from 5% and restricted bids for a former Gold Fields mine to companies wholly owned by citizens of the country.That tender was won by Engineers and Planners Co. Ltd., a firm that belongs to President John Mahama’s brother. E&P already held a mining contract at the asset it acquired and continues to do so at Tarkwa.The nation has also weighed transferring control of the Tarkwa mine to a consortium of Ghanaian firms once the leases expire as Mahama’s administration faces domestic pressure to act against South African firms following a wave of xenophobic protests in the continent’s biggest economy, Bloomberg reported last month.Discussions between the company and the government are continuing, the people said, who asked not to be identified because they’re not authorized to speak publicly about the details. They added that authorities intend to pass the new mining law before concluding a review of pending lease-renewal applications, meaning Gold Fields’s request could be assessed under the revised legal framework.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.The new law will also abolish stability and development agreements, which allow mining companies to lock in fiscal terms such as taxes and royalties for fixed periods, replacing them with a capital-recovery framework, the people said.Existing stability accords with major operators, including Newmont Corp., AngloGold Ashanti Plc and Gold Fields would remain in force until they expire in 2027 before being phased out under the new regime, they said.“Removing stability agreements altogether could make Ghana less competitive” to other jurisdictions, Boakye said. “Sustaining production over the long term will require renewed exploration and fresh capital, both of which depend heavily on policy stability and regulatory certainty.”Other key proposals contained in the new law include:Automatic renewal of mining leases would be eliminated, giving the sector minister broader discretion to determine lease extensions.Prospecting licenses would be shortened to between seven and nine years.A new tier of mining firms known as medium-scale mining companies will be created, which would require at least 60% Ghanaian ownership. NOTE: Ghana mining firms are currently categorized into small-scale and large-scale activity.Mining companies would be required to sign community development agreements that allocate a fixed percentage of gross mineral sales to development projects in host communities.Sign up here for the daily Next Africa newsletter and subscribe to the Next Africa podcast on Apple, Spotify or anywhere you listen.—With assistance from William Clowes and Moses Mozart Dzawu.(Updates with analyst comment in sixth paragraph.)Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.