Keypoints:
- Ghana replaces flat five percent gold royalty with sliding scale
- Western governments and miners warn policy could deter investment
- Regulator says reform will boost revenue while keeping sector stable
GHANA will introduce a new sliding-scale gold royalty regime on Tuesday despite opposition from several governments and mining companies, according to the country’s mining regulator.
The policy links royalties paid by gold producers to global bullion prices, replacing the long-standing flat five percent royalty applied to mining operations in Africa’s largest gold-producing nation.
Officials say the reform is part of a broader strategy to increase state revenue during periods of high commodity prices while ensuring the mining sector remains competitive.
The policy debate follows growing international attention over Ghana’s plans to raise royalties. Earlier reporting by Africa Briefing highlighted how foreign governments and mining companies have attempted to persuade Ghana to reconsider the reform.
New framework ties royalties to gold prices
Under the framework, the royalty paid by gold miners will rise depending on international market prices.
The sliding-scale system allows the royalty rate to reach as high as 12 percent once gold prices hit $4,500 per ounce. Gold is currently trading above $5,000 per ounce, which places producers within the highest band of the new structure.
The revised framework also introduces a similar sliding-scale royalty model for lithium. Lithium royalties will range between five percent and 12 percent based on market prices between $1,500 and $3,200 per metric tonne.
Other minerals produced in Ghana will continue to attract the existing five percent flat royalty rate.
The reform reflects a wider policy shift by the Ghanaian government to capture greater value from natural resources as global commodity prices rise. Ghana has already signalled broader changes to its mining regime, including plans outlined earlier this year.
Foreign governments raise concerns
The policy has attracted diplomatic attention from major economic partners. Reuters reported that the United States, China and several Western governments have jointly raised concerns with Ghanaian authorities over the royalty increase.
Diplomats warned that a higher royalty burden could reduce Ghana’s competitiveness in attracting new mining investment.
Isaac Tandoh, chief executive of the Minerals Commission, confirmed that diplomatic missions had engaged with regulators over the issue.
‘They met us, they are not against the review in principle,’ Tandoh said over the weekend.
According to him, foreign representatives proposed that the top 12 percent royalty should apply only after gold prices reach $5,000 per ounce rather than $4,500.
Ghana rejected that proposal after reviewing its economic projections and fiscal modelling, he said.
Mining companies warn of investment risks
Mining industry leaders have also voiced strong reservations about the planned reform, arguing that higher royalties could discourage exploration and investment.
Executives from several global gold producers have warned that increasing royalty payments may raise operating costs and reduce the attractiveness of Ghana’s mining sector.
The Ghana Chamber of Mines has echoed these concerns. Its chief executive, Kenneth Ashigbey, told Reuters the proposed system could negatively affect production growth.
He warned that the changes risk ‘drying up new projects and output’ if investors choose to redirect capital to countries offering more favourable fiscal terms.
The mining sector remains central to Ghana’s economy. Strong global demand has driven record production levels, reinforcing the government’s push to revise the fiscal regime.
Government argues reform protects industry margins
Despite the pushback, Ghana’s Minerals Commission insists the policy strikes a balanced approach.
Tandoh said economic modelling indicates the sliding-scale system will increase government revenue during commodity booms while preserving profitability for mining companies.
He also dismissed concerns that Ghana could lose its competitive edge.
According to the regulator, investors are more concerned with regulatory predictability and stability than marginal changes in fiscal terms.
The royalty reform also fits into Ghana’s broader ambition to retain more value from its mineral resources. The government has outlined long-term plans to expand domestic mineral processing capacity, including initiatives detailed in a speech by President Mahama in Addis Ababa, in February.
As global demand for gold and strategic minerals continues to rise, Ghana believes the new royalty regime will help ensure the country captures a larger share of the economic benefits generated by its natural resources.
