Ghana is poised to implement significant changes to its mining legislation, shortening mining licence periods and mandating direct revenue-sharing with local communities, reported Reuters.
This marks the most extensive reform of the country’s mining laws in nearly two decades, reflecting a broader trend in West Africa to gain more value from natural resources amid rising commodity prices.
Under the proposed legislation, prospecting licences will have set durations, and the maximum term for mining leases will be reduced from 30 years to a period determined by the government and mining operators.
Companies that fail to meet environmental, social or production obligations will no longer have the right to automatic licence renewal.
A significant policy shift will see the abolition of development agreements that previously directed funds to the central government.
Instead, mining companies will be obligated to allocate a fixed percentage of gross mineral sales revenue to finance local development projects.
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By GlobalDataThis move aims to address the grievances of communities that feel they have not benefitted sufficiently from mining activities.
The reforms propose a three-tier mineral rights system, which includes a medium-scale licence category aimed at bridging the divide between large multinational operators and small-scale artisanal miners.
Additionally, the government is considering reducing or eliminating stability agreements that offer tax and regulatory protection to large investors for up to 15 years. Future agreements would be limited to capital recovery periods for major investments.
Lands and Natural Resources Minister of Ghana Emmanuel Armah Kofi Buah announced that the reforms will apply only to future contracts.
This approach differs from Mali and Burkina Faso, where governments have enforced reforms retroactively.
“In Ghana, we don’t do retrospective laws,” Buah was quoted as saying. He assured stakeholders that existing agreements would be honoured.
The minister revealed that the revision of the Minerals and Mining Act and mining policy was 85% complete after extensive consultations.
Ghana, the leading gold producer in Africa, anticipates a rise in output to 5.1 million ounces this year.
The country is home to major mining companies such as Newmont, Gold Fields and AngloGold Ashanti, and it also exports bauxite and manganese, with plans to commence lithium production.
Furthermore, Ghana’s gold sector has been affected by a substantial trade gap, leading to an estimated loss of $11bn due to smuggling, with most of the smuggled gold believed to be flowing into the United Arab Emirates, particularly Dubai.
