Ghana's Gold Rush: Mining Reforms Shake Up Africa's Top Producer

Ghana is set to overhaul its mining sector by abolishing long-term stability agreements and doubling royalties to capitalize on soaring gold prices. The reforms aim to increase local benefits while maintaining investor confidence, with changes including tougher local-content rules and phasing out existing arrangements.

Ghana is poised to transform its mining industry by eliminating long-term investment stability agreements and doubling royalties. This significant policy shift, confirmed by the nation's mining regulator, is designed to harness more from soaring gold prices, boosting local benefits while safeguarding investor interest.

The sweeping reforms, revealed by Isaac Tandoh, acting CEO of the Minerals Commission, in an interview with Reuters, signal a recalibration of priorities as the country aims to optimize its resources. Current stability and development agreements, which lock tax and royalty terms for five to 15 years upon investments of up to $500 million, are set to be phased out. Leading firms like Newmont, AngloGold Ashanti, and Gold Fields face non-renewal of these agreements as Ghana pivots toward a new legislative framework.

With a draft bill expected in Parliament by March, royalties may hike from the current 3%-5% to up to 12%, contingent on gold prices. This move underscores a broader intention to indigenize more value domestically and impose stricter compliance. Ghana, Africa's leading gold producer, is adapting to rise in gold market dynamics to sustain economic leverage while navigating investor concerns prudently.

(With inputs from agencies.)