US and China oppose Ghana’s proposed Gold royalty increase – Report

Several foreign governments and global mining companies are reportedly urging Ghana to reconsider plans to introduce a new royalty regime for gold mining operations.

According to a report by Reuters, the Government of Ghana intends to replace the current fixed 5 percent royalty on gold with a sliding rate ranging between 5 percent and 12 percent, linked to global bullion prices. The proposed policy aims to increase the country’s revenue from its vast gold resources.

However, the proposal has reportedly attracted strong opposition from some Western governments and industry players who fear the new framework could significantly increase operating costs for mining companies.

The report noted that the policy, which could take effect soon, would potentially make Ghana one of Africa’s most expensive jurisdictions for gold mining, thereby affecting the profit margins of some of the world’s largest mining firms.

Although Ghana has reportedly offered to reduce an existing industry levy to offset the impact of the new royalty structure, several mining companies have still opposed the proposal, describing the rates as too high.

Diplomatic missions from countries including the United States, China, United Kingdom, Canada, Australia and South Africa have reportedly raised concerns with the Ghanaian government over the proposed regime.

According to Reuters, representatives of these diplomatic missions met with Emmanuel Armah-Kofi Buah, Ghana’s Minister for Lands and Natural Resources, and presented a joint document outlining their concerns about the potential impact of the policy on the mining sector.

The group is also reportedly seeking a meeting with the Minister for Finance, Cassiel Ato Forson, to further discuss the matter.

One industry executive quoted in the report said the diplomatic intervention represents an unusually strong response to a fiscal proposal affecting the mining sector.

“This is the first time I’ve seen the diplomatic community get involved at this scale,” a senior industry source reportedly said.

Mining industry leaders have also expressed concerns over the proposal. Chief executives from major mining firms including Newmont, Gold Fields, AngloGold Ashanti and Perseus Mining are said to have raised objections with the Ghanaian authorities.

In addition, executives from Chinese mining companies such as Zijin Mining, Chifeng Gold and Shandong Gold have reportedly lodged formal protests through the Association of China–Ghana Mining, warning that the new royalty structure could threaten the viability of their operations in Ghana.