Africa’s largest gold producer alters 20-year-old mining laws to give power back to its people

Ghana has approved major changes toits mininglaws to give the people more control, stop illegal mining, and increase the money it makes from its mineral re

The African goldrush continues

• Ghana has approved significant reforms to its mining laws to boost government oversight, curb illegal mining, and increase national revenue.
• This is the first major change to the mining framework since 2006, aiming to ensure local communities benefit more from gold mining.
• International mining companies operating in Ghana, such as Newmont, Gold Fields, and AngloGold Ashanti, are directly affected by these new regulations.
• The law mandates higher and more flexible royalty rates tied to gold prices, and requires mining companies to negotiate development agreements with local communities.

This new development is the first big change to the country’s mining rules since 2006, and it aims to help local communities get a bigger share of the wealth from gold.

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The new rules will affect several large international mining companies that operate in Ghana, including Newmont, Gold Fields, AngloGold Ashanti, Zijin, and Perseus Mining.

Under the new law, local districts will set up special mining committees so that communities have a say before any mining license is approved.

Mining companies will also be legally required to sign development agreements directly with these local communities instead of making decisions on their own.

To get more money from gold, the government has changed its tax system so that the royalty fees companies pay will go up and down based on the market price of gold, rather than staying at one flat rate.

The government also plans to end older agreements that guaranteed fixed tax rates for long periods.

A gold mine [Photo by Amy Nip/South China Morning Posting Post

Ghana’s Minister of Lands and Natural Reby Reuters, stated that “This policy seeks to indigenize mining by strengthening local content through domestic value addition to minerals, improve linkages to manufacturing industry, and deal decisively with the menace of illegal mining and the protection of our environment.”

The new rules also stop companies from holding onto land without doing any real work.

The government is combining different prospecting permits into a single exploration license that lasts for a maximum of 5 years.

If a company wants to extend this license, it must show that it did good work during the first 2 years.

Addressing the issue of inactive holdings, the minister cautioned dormant license holders by warning that, “If for five years you can’t act, we will take it from you.”