The Ghana Extractive Industries Transparency Initiative (GHEITI) has warned that political interference could undermine operations at the Damang gold mine – cautioning that without strict governance standards and firm operational controls, the asset’s long-term sustainability and economic contribution could be compromised.

In its 2023 report, GHEITI said rigorous oversight structures must back any decision to return the mine to full state control to guard against political capture and operational inefficiencies.

Failure to do so, it noted, risks eroding productivity, government revenues and investor confidence at a time when the country is seeking to stabilise its economy and optimise returns from its extractive sector.

The warning comes against the backdrop of government’s decision not to renew the lease of Damang mine, operated by Abosso Gold Fields Limited, following the expiry of its mining lease.

Government subsequently directed Gold Fields to cease operations and vacate the lease area by April 18, 2026.

Gold Fields has since indicated it is taking steps to wind-down operations in a safe and orderly manner, prioritising the security of personnel and the management in high-risk activities during the transition period.

Abosso Gold Fields Limited (AGL), a Ghana-registered company, operates the Damang mine. Gold Fields Ghana Holdings Limited holds a 71.1 percent stake in AGL, with IAMGold owning 18.9 percent and Government of Ghana retaining a 10 percent interest.

Damang oversees five prospecting licences and two mining leases – the Damang Mining Lease and Lima South Mining Lease – covering a total area of 8,111 hectares. The broader concession spans 27,174 hectares.

The processing plant has capacity to treat about 5.1 million tonnes of ore annually, drawing from both oxide and fresh ore sourced from open-pit operations and stockpiles.

The pending takeover has ignited debate over the future structure of the country’s mining industry. The Institute of Economic Affairs (IEA) has advocated a new policy framework anchored on stronger state ownership of mineral resources, with private firms engaged strictly under service contracts.

Other civil society groups, including the Africa Centre for Energy Policy (ACEP), have urged caution – warning that abrupt shifts in lease arrangements could dent investor confidence and expose the country to legal and reputational risks.

“Any stakeholder truly aligned with this national goal must be transparent and factual in demonstrating how their decisions maximise public benefit,” ACEP’s Executive Director, Benjamin Boakye, said when the issue first surfaced.

Presenting the report’s recommendations, GHEITI Technical Officer Fadil Iddi stressed that whichever path government chooses, transparency and competitiveness must underpin the process.

“If government decides to offload the mine to a foreign investor, GHEITI will strongly urge that local participation is highly prioritised,” he said.

He added that authorities could consider establishing a wholly Ghanaian-owned company to operate the mine, provided it is insulated from political interference and supported by strong managerial capacity. In either scenario, he emphasised, the allocation process should be subject to open and competitive bidding.

GHEITI further proposed the creation of a Special Purpose Vehicle (SPV), domiciled in Ghana, to serve as the primary investor and operator. Such an entity, it said, could mobilise both equity and debt financing to sustain operations.

Alternatively, it was also proposed that qualified local mining firms could form a consortium to manage the asset under clearly defined commercial terms.