New Gold Royalty Regime: Mining companies will be forced to pay if law is not amended – Chamber of Mines
The Ghana Chamber of Mines, has acknowledged that member companies will be forced to comply with the news sliding scale gold royalty regime set to take effect this week unless the legislation is amended or withdrawn.
Speaking on Joy News’ PM Express on Monday, Chief Operating Officer of the Chamber of Mines, Ahmed Dasana Nantogmah, confirmed that companies without stability clauses in their mining leases are prepared to begin paying under the new framework, but clarified that the industry has not given up on reversing it.
“If they don’t amend the law, then as a good corporate citizen, you are forced to pay,” he said. “You will pay, but then you have to cope. You adopt a coping strategy.”
The new regime replaces existing flat 5% gold royalty rate with a sliding scale tied directly to the global price of bullion. Under the framework, royalty rates begin at 5% and climb to a maximum of 12% when gold prices hit $4,500 per ounce, a threshold that has already been crossed, with gold currently trading above $5,000 per ounce.
The law, which was laid before Parliament in December last year, has been described as the government’s “most aggressive move yet to capture a larger share of revenues from gold’s historic multi-year price surge.”
“The government put in the law, government can decide to change the law, can withdraw it, can amend it. That’s what we’re hoping for,” Nantogmah said. “But if they don’t, then you are paying through your nose. It doesn’t mean you can refuse. If you don’t pay, you become an illegal company.”
The COO also stressed that the Chamber is not simply advocating for the interests of foreign multinational companies, noting that investors from any country including Ghanaians operating abroad expect host governments to maintain stable operating environments.
“Even if a Ghanaian company invests in another country and there’s something that will harm our interests, we’d want our government to intervene. So, they are just cautioning us, we need to be careful with what we are doing with this golden goose that is laying the gold,” he added.
Meanwhile, the proposed royalty regime has triggered an “unusually high-profile international response.” Reuters has reported that diplomatic missions from the U.S, China, the Uk, Canada, Australia and South Africa jointly presented concerns to the Minister of Lands and Natural Resources, seeking further engagement with the Finance Ministry.
“This is the first time I’ve seen the diplomatic community get involved at this scale,” one senior industry executive was quoted by Reuters.
CEOs from global mining giants Newmont, Gold Fields, AngloGold Ashanti and Perseus wrote directly to the Lands Minister as early as December and January to register their opposition, while Chinese-owned operators including Zijin, Chifeng and Shandong Gold filed formal protests, warning that the proposals could “threaten the viability of their Ghanaian operations.”
Despite the pressure, Minerals Commission CEO Isaac Tandoh confirmed that the government will proceed to ratify the legislation.
“They met us, they are not against the review in principle,” Tandoh said. “They wanted the 12% rate to kick in after gold hits $5,000 per ounce, but we rejected that.”
Chamber of Mines CEO Kenneth Ashigbey also warned that the new regime would “dry up new projects and output,” although the state stands to gain from the current price hikes.
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