Gold Fields has finalised a development agreement with the Government of Ghana for its Tarkwa and Damang mines.

Under the agreement, the corporate tax rate will be reduced from the existing 35% to 32.5% with effective from 17 March 2016.

The agreement also highlights a change in the royalty rate from a flat 5% of revenue to a sliding scale royalty based on the gold price with effect from 1 January 2017.

According to the company, the agreement will be for a period of 11 years for Tarkwa, while it will be nine years for Damang.

"The agreement is expected to save 2,000 jobs at the Damang mine."

Each term is also renewable for another five years.

Gold Fields said in a statement: "Ghana continues to be a key region for Gold Fields and we commend the Government of Ghana for creating a fair and competitive environment in the country."

The agreement is expected to save 2,000 jobs at the Damang mine, which could be lost if the mine was placed under care and maintenance.

Reuters reported Gold Fields spokesman Sven Lunsche saying that the company is yet to take a decision on whether to invest more into Damang or cease operations at the mine.

In 1993, the company signed a management contract with the government to operate the mine and later a feasibility study was completed in 1996 on an open-pit/heap leach operation.

Gold Fields acquired the 18.9% IAMGold interest in Tarkwa in 2011 and currently owns 90%, while the remaining 10% is held by the Ghanaian Government.

In 2001, Gold Fields signed an agreement to purchase Repadre’s 90% interest in Damang.

IAMGold and Repadre merged to give IAMGold an 18.9% interest in Damang and Gold Fields a 71.1% interest.