The country risks losing billions of dollars in mining investment and ceding ground to regional rivals unless it eases its fiscal burden and restores investor confidence in the security of mining leases, the Ghana Chamber of Mines has warned.<\/p>\n\n\n\n
The Chamber says government’s overall share of mining revenues is approaching 60 percent under the current tax and royalty regime, making Ghana less competitive as neighbouring countries intensify efforts to attract exploration capital.<\/p>\n\n\n\n
These concerns come as government seeks to maximise value from the country’s mineral resources while encouraging greater local participation in the sector.<\/p>\n\n\n\n
Speaking on the sidelines of the Mining for Development Forum (MDF) in Accra, Chief Executive Officer (CEO)-Ghana Chamber of Mines Dr. Kenneth Ashigbey said the country’s mining framework has been instrumental in making it Africa’s leading gold producer – but recent fiscal and regulatory changes are eroding that advantage.<\/p>\n\n\n\n
“One example is the sliding-scale royalty regime. The principle itself is sound: when gold prices are high, government should earn more and when prices fall the burden on mining companies should ease. The challenge lies in the thresholds we adopted,” he said.<\/p>\n\n\n\n
The Chamber wants government to review the royalty bands, arguing that the 12 percent royalty rate should apply only when gold prices reach about US$6,500 per ounce rather than the current US$4,500 threshold.<\/p>\n\n\n\n
\u201cOur analysis shows that under the current structure government’s overall take is approaching 60 percent, which is high in a highly competitive global investment environment,\u201d Dr Ashigbey said.<\/p>\n\n\n\n
He argued that mining capital follows returns rather than geography. \u201cCapital is mobile. Ghanaian investors will not necessarily invest in Ghana simply because they are Ghanaians. They will invest where they can earn competitive returns and foreign investors think the same way.\u201d<\/p>\n\n\n\n
Although government has introduced incentives, including VAT exemptions for mineral exploration, Dr Ashigbey said the industry has yet to see the expected increase in exploration spending because the overall fiscal burden remains high.<\/p>\n\n\n\n
Beyond taxation, he identified uncertainty over the renewal of mining leases as a growing concern for investors.<\/p>\n\n\n\n
According to Dr. Ashigbey, banks are already taking lease tenure into account when assessing financing requests.<\/p>\n\n\n\n
He cited a recent case in which a Ghanaian mining contractor sought financing after securing a contract with another mining company.<\/p>\n\n\n\n
\u201cThe banks wanted to know how much time remained on the underlying mining lease. Their concern was straightforward: if the lease expires and there is uncertainty about its renewal, the investment becomes riskier.<\/p>\n\n\n\n
\u201d He said this was why Section 44(3) of the Minerals and Mining Act requires the Minister to renew a lease when the holder has materially complied with its terms.<\/p>\n\n\n\n
\u201cIf uncertainty over lease renewals persists, country risk premiums will increase. Investors will price that risk into every project, making financing more expensive and reducing Ghana’s competitiveness.<\/p>\n\n\n\n
\u201d The Chamber said it supports policies that enable Ghana to retain greater value from its mineral resources, provided they also preserve the country’s attractiveness to investors.<\/p>\n\n\n\n
\u201cWe believe it is possible to negotiate arrangements that create a genuine win-win outcome. Ghana should retain greater value from its mineral resources, promote national development and, at the same time, provide investors with attractive and predictable returns,\u201d Dr. Ashigbey said.<\/p>\n\n\n\n
Responding to broader questions about value retention, Deputy CEO-Minerals Commission Emmanuel Kwamena Anyimah said the country\u02bcs long-term success should not be measured solely by mineral production or export earnings.<\/p>\n\n\n\n
\u201cFor many years, mining success has been measured by production volumes, export earnings and fiscal contributions. While these remain important, the real measure today is the extent to which mining creates, retains and reinvests value within the national economy,\u201d he said.<\/p>\n\n\n\n
Mr. Anyimah said mining remains a key contributor to foreign exchange earnings, employment, government revenue and infrastructure development, but argued that the country’s next phase of growth should be driven by industrialisation.<\/p>\n\n\n\n
He acknowledged that many high-value mining inputs – including specialised equipment, heavy machinery, chemicals and advanced technologies – continue to be imported, while much of the processing and technology development associated with the industry still takes place outside Ghana.<\/p>\n\n\n\n
He said the Minerals Commission envisages a future in which more mining inputs are manufactured locally, Ghanaian engineers develop solutions for the industry, universities support mining research and innovation and indigenous companies participate across the full mining value chain.<\/p>\n\n\n\n
\u201cThat requires consistency, regulatory certainty and a shared national commitment to long term development,\u201d he said.<\/p>\n\n\n\n
The Mining for Development Forum, organised by the Ghana Chamber of Mines and themed ‘Strategic Value, Value Retention and Development’, brought together policymakers, regulators, mining companies and industry stakeholders to discuss how Ghana can maximise the economic benefits of its mineral resources while maintaining competitiveness as a leading mining destination.<\/p>\n\n\n\n