Keypoints:
- Ghana will abolish long-term mining stability and development agreements
- Gold royalties could rise to 12 percent under a new sliding scale
- Existing agreements with major miners will expire by 2027
GHANA is preparing to double gold royalties and scrap long-term mining stability agreements under a sweeping overhaul aimed at capturing more value from record-high bullion prices, according to the country’s mining regulator.
The reforms mark one of Ghana’s most significant shifts in mining policy in two decades, signalling a move away from bespoke fiscal incentives towards a tougher, price-linked regime as Africa’s top gold producer seeks to boost public revenues while maintaining investor interest.
The changes are part of a broader review of Ghana’s mining framework designed to balance investor confidence with the government’s push for a larger share of mining windfalls, Isaac Tandoh, acting chief executive of the Minerals Commission, told Reuters in an interview in Accra.
‘Renewal of investment stability agreements is not going to happen,’ Tandoh said. ‘Renewal is conditional, not automatic.’
Stability agreements to be phased out
Stability and development agreements were introduced in the early 2000s to attract foreign capital into Ghana’s mining sector. They typically lock in tax and royalty terms for between five and 15 years in exchange for mine investments of about $300 million to $500 million, alongside commitments to extend mine life and increase output.
Major producers including Newmont, AngloGold Ashanti and Gold Fields currently operate under such agreements.
Tandoh said Newmont’s stability agreement, which expired in December, would not be renewed. Similar arrangements held by AngloGold Ashanti and Gold Fields will be allowed to run until they lapse in 2027, after which the regime will be fully phased out.
Development agreements will be scrapped entirely. According to Tandoh, authorities have seen cases where companies expanded abroad using revenues from Ghana while failing to meet basic domestic obligations.
‘We’ve seen companies use revenue from Ghana to buy mines elsewhere while refusing to pay even basic obligations like contributions to district assemblies,’ he said. ‘That cannot continue.’
Royalties linked to gold prices
A draft bill expected to be submitted to parliament by March proposes a new royalty structure starting at 9 percent and rising to as much as 12 percent if gold prices reach $4,500 per ounce or higher. This compares with the current sliding scale of between 3 percent and 5 percent.
Spot gold is trading around $4,590 per ounce, driven by geopolitical uncertainty, central bank buying and expectations of looser global monetary policy.
The reforms also introduce tougher local-content rules, requiring mining firms to procure more goods and services domestically and increase support for Ghanaian-owned companies across supply chains.
Investor concerns and government stance
Ghana’s stability agreements are widely credited with helping the country overtake South Africa as Africa’s largest gold producer, unlocking billions of dollars in foreign investment over the past two decades.
Newmont’s Ahafo agreement, for example, fixed corporate tax at 32.5 percent and royalties at between 3 percent and 5 percent, alongside duty and VAT relief on qualifying inputs. Extensions were tied to minimum investment thresholds, output targets, mine-life extensions and Ghanaian employment commitments, according to agreements reviewed by Reuters.
Tandoh said Newmont had sought an extension, but the government now wants to replace company-specific incentives with a unified framework that ‘indigenises’ more value locally and enforces stricter compliance.
He acknowledged concerns from smaller miners and new projects that higher royalties could deter investment, saying regulators were consulting stakeholders to design a formula that preserves competitiveness while lifting revenues when prices are high.
Tandoh rejected claims the tougher terms would scare off capital. ‘They operate under harsher conditions elsewhere and still make profits,’ he said. ‘Mining is about numbers.’
The Ghana Chamber of Mines did not immediately respond to requests for comment.
