Ghana to Scrap mining stability deals, double royalties as gold prices soar

Ghana plans to scrap long-term mining investment stability agreements and double royalty rates under sweeping reforms aimed at capturing greater benefits from soaring gold prices, the country’s mining regulator has told Reuters.

The measures form part of a broader overhaul designed to balance investor confidence with the government’s push to secure a larger share of mining revenues, Isaac Tandoh, Acting Chief Executive Officer of the Minerals Commission, said in an interview in Accra.

African governments have increasingly tightened mining regulations to benefit from high commodity prices, often raising royalties and local-content requirements—moves that have periodically triggered disputes with multinational mining companies over costs and contract certainty.

In Ghana, the world’s sixth-largest gold producer, stability and development agreements typically lock in tax and royalty terms for five to 15 years in exchange for investments of about $300 million to $500 million for mine development and expansion. Companies are also required to extend mine life by at least three years and increase output by more than 10 per cent to qualify for renewal.

Major miners including Newmont, AngloGold Ashanti and Gold Fields currently operate under such agreements. The companies did not immediately respond to requests for comment.

Mr Tandoh said the reforms—expected to be written into law—mean that Newmont’s stability agreement, which expired in December, will not be renewed, while similar arrangements held by AngloGold Ashanti and Gold Fields will be phased out when they expire in 2027.

A draft bill expected to be submitted to Parliament by March proposes royalty rates starting at 9 per cent, rising to 12 per cent if gold prices reach $4,500 per ounce or higher, roughly double the current 3–5 per cent range. Spot gold is currently trading at about $4,590 per ounce.

The reforms will also introduce stricter local-content rules to boost in-country procurement and strengthen support for Ghanaian firms.

“Renewal of investment stability agreements is not going to happen,” Mr Tandoh said. “Renewal is conditional, not automatic.”

He added that development agreements will be scrapped entirely, arguing that they have been abused.

“We’ve seen companies use revenue from Ghana to buy mines elsewhere while refusing to meet basic obligations, such as contributions to district assemblies. That cannot continue,” he said.

Newmont Sought Extension

Ghana introduced stability agreements in the early 2000s, helping attract billions of dollars in foreign investment and enabling the country to overtake South Africa as Africa’s top gold producer.

Newmont’s Ahafo agreement, for instance, set a 32.5 per cent corporate tax rate and a sliding royalty of 3–5 per cent, rising to 3.6–5.6 per cent in forest reserve areas, alongside duty and VAT exemptions on qualifying inputs. The extension was tied to a minimum $300 million investment and targets on output, mine life and Ghanaian employment, according to a revised 2015 agreement reviewed by Reuters.

Mr Tandoh confirmed that Newmont had requested an extension, but said the government intends to phase out the regime in favour of broader rules aimed at retaining more value locally and enforcing stricter compliance.

He added that authorities were engaging smaller and new mining projects on concerns about the proposed royalty increases and would seek a formula that preserves investment while raising revenue when prices are high.

Mr Tandoh dismissed claims that the tougher terms would deter investment. “They operate under harsher conditions elsewhere and still make profits. Mining is about numbers,” he said.

The Ghana Chamber of Mines did not immediately respond to requests for comment.

By Maxwell Akalaare Adombila & Emmanuel Bruce/ Reuters