Sliding-scale royalty proposal risks investment decline, says Ghana Chamber of Mines

The Ghana Chamber of Mines has cautioned that government’s proposed sliding-scale royalty regime of 5 per cent to 12 per cent on gross mineral revenue could worsen the investment climate in the mining sector and lead to reduced capital inflows, stalled projects and potential job losses.

In a statement issued on Monday, the Chamber acknowledged government’s objective of increasing national benefit from the mining sector amid high global gold prices but warned that the proposed royalty structure risks undermining the very growth needed to sustain long-term revenues.

Chief Executive Officer of the Ghana Chamber of Mines, Ing. Kenneth Ashigbey, said the current proposal, rather than incentivising production expansion, could constrain investment and limit the industry’s ability to reinvest and fully benefit from favourable market conditions.

According to the Chamber, Ghana’s mining fiscal regime already ranks among the most onerous globally, with royalties and levies applied on gross revenue rather than profits, meaning operational and capital costs are not taken into account. The Chamber noted that large-scale mining companies currently pay a 5 per cent royalty, a 3 per cent Growth and Sustainability Levy, a 10 per cent free carried interest for the state, corporate income tax and other statutory charges.

Ing. Ashigbey explained that introducing a sliding-scale royalty of up to 12 per cent on gross revenue would further raise the effective tax burden on mining companies, increasing operational pressure and reducing the attractiveness of Ghana as a mining destination.

He warned that higher production costs resulting from the proposed royalty regime could lead to delayed or cancelled expansion projects, reduced exploration activity and job losses, particularly in capital-intensive operations that depend on long-term investment certainty.

The Chamber stressed that sustainable revenue generation depends on a fiscal framework that balances government’s revenue aspirations with the industry’s need to remain competitive and financially viable. It therefore called for continued dialogue with government to identify a “sweet spot” that allows the state to benefit from high gold prices while enabling mining companies to expand output and reinvest in their operations.

The Ghana Chamber of Mines reaffirmed its commitment to engaging constructively with government and other stakeholders to develop a fiscal regime that maximises national benefit without sacrificing investment, employment and long-term sector growth.