The Ghana Chamber of Mines has cautioned government against further fiscal tightening in the mining sector, warning that higher royalties and additional levies could threaten the viability and competitiveness of mining companies operating in the country.

The Chamber said the recent rise in global gold prices is cyclical and should not be used as justification for permanent increases in royalties or other fiscal charges, noting that commodity price booms are often followed by sharp market corrections.

It also expressed concern over proposed amendments to the Minerals and Mining Act, particularly plans to shorten the tenure of mining leases. According to the Chamber, such changes run counter to international best practice and could discourage the long-term capital investments required to sustain the sector.

While acknowledging the sector’s strong contribution to the economy, the Chamber pointed out that mining fiscal payments increased by more than 51 per cent in 2024, largely driven by large-scale operators. It warned, however, that imposing excessive royalty burdens could quickly erode these gains.

Speaking at a press briefing on Tuesday, Chief Executive Officer of the Ghana Chamber of Mines, Dr Ing. Kenneth Ashigbey, said the key issue lies in the structure of the proposed royalty regime, including the selected price ranges, applicable rates, and whether royalties are applied to gross revenue or net margins.

“The challenge is the choice of price range and applicable rates, as well as whether it is surcharged on gross revenue or net margin. Currently, the combined effect of royalties and the Growth and Sustainability Levy puts the effective royalty rate at more than 10 per cent of gross revenue. Any upward revision of the generic royalty rate would derail the viability of most mines and undermine Ghana’s competitiveness relative to its peers,” he said.

The Chamber clarified that it is not opposed in principle to the government’s proposal for a sliding-scale royalty system that reflects fluctuations in mineral prices. However, it stressed that such a regime must be carefully designed to avoid placing an unsustainable burden on operators.

According to the Chamber, the existing combination of royalties and the Growth and Sustainability Levy already pushes the effective fiscal burden above 10 per cent of gross revenue, leaving limited room for further increases.

It has therefore called on government to intensify engagement with industry stakeholders to achieve a balanced approach that supports revenue mobilisation while preserving a globally competitive and sustainable mining sector.