Ghana is set to scrap long-term mining investment stability agreements and sharply raise royalty rates as part of a broad overhaul aimed at capturing more value from soaring gold prices, according to the country’s mining regulator.

Africa’s biggest gold producer introduced stability agreements in the early 2000s to attract foreign capital, a strategy that unlocked billions of dollars in investment and helped Ghana overtake South Africa as the continent’s top producer. The country is also the world’s sixth-largest gold producer.

The policy shift comes amid a surge in gold prices that has strengthened Ghana’s external position. According to Bloomberg, the cedi posted its first annual gain against the US dollar since at least 1994 last year, supported by record bullion prices and broad dollar weakness.

The proposed changes mirror a wider trend across Africa, where governments are tightening mining regimes to secure a larger share of windfall revenues from commodity exports.

Under the reforms, which are expected to be enshrined in law, stability and development agreements that have historically locked in tax and royalty terms for up to 15 years will be discontinued. A draft bill is expected to be submitted to parliament by March.

Isaac Tandoh, acting chief executive officer of the Minerals Commission, said the measures are designed to rebalance investor confidence with the government’s push to secure greater fiscal benefits from mining during a period of elevated gold prices.

Royalties would start at nine per cent and rise to as much as 12 per cent if gold prices reach $4,500 per ounce or higher, compared with the current range of three per cent to five per cent. Spot gold is currently trading around $4,590 an ounce.

Tandoh added 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 lapse in 2027. Renewal of stability agreements will no longer be automatic and will be subject to strict conditions.

Historically, stability agreements required mining companies to commit between $300 million and $500 million for mine construction or expansion, extend mine life by at least three years, and increase output by more than 10 per cent to qualify for renewal.

Development agreements will be scrapped entirely, Tandoh noted, citing abuses of the framework. He said some firms had used revenues generated in Ghana to acquire assets elsewhere while falling short of domestic obligations, including payments to local authorities.

The reforms will also introduce tougher local content requirements aimed at boosting in-country procurement and expanding support for Ghanaian businesses. (BusinessDay)

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