GHEITI demands clarity on gov’t plans for Gold Fields’ Damang Mine after 2026

The Ghana Extractive Industries Transparency Initiative (GHEITI) has called on government to clearly state its position on the future of the Gold Fields Damang Mine, which is expected to return to state control in 2026 following the expiration of its 30-year mining lease.In its newly published 2023 EITI reports, which include updated analysis and recommendations on recent developments in the mining, oil and gas sectors, GHEITI noted that the Damang Mine will revert to government ownership after an amicable settlement between Gold Fields and the Government of Ghana.According to the report, government now faces a critical decision on whether to operate the mine as a state-owned commercial entity or offload it to interested investors.GHEITI warned that whichever option is chosen will have significant implications for Ghana’s long-standing goal of localising the mining sector to improve value retention.While acknowledging that state management of the mine could enhance national benefits, GHEITI cautioned that such an approach would require strong discipline, rigorous governance structures, and effective operational control to ensure sustainability.The report also warned that converting the mine into a state-owned enterprise could expose it to political interference, potentially leading to inefficiency and reduced productivity.To promote transparency and accountability, GHEITI recommended that government publicly declare its intentions regarding the disposal or management of the Damang Mine after the transition period, to allow for informed public debate.Among its key recommendations, GHEITI urged that if government opts to sell or lease the mine to a foreign investor, local participation should be prioritised.Alternatively, the report encouraged consideration of a wholly Ghanaian-owned company, stressing that any option chosen must follow an open and competitive bidding process.GHEITI also proposed the establishment of a Special Purpose Vehicle (SPV) domiciled in Ghana to act as the primary investor and operator of the mine. The SPV could raise both equity and debt capital to finance operations. Additionally, government was encouraged to consider forming a consortium of qualified local mining operators to manage the mine.