Ghana’s cabinet has approved mining legislation reforms for submission to parliament, Mines Minister Emmanuel Armah-Kofi Buah announced on Wednesday, as part of the government’s attempts to improve management of the crucial revenue-generating sector and combat unlawful mining.
Ghana, Africa’s largest gold producer, has been undertaking reforms to increase state revenue and local participation in its natural resources.
This year, it adopted a sliding-scale gold royalty regime tied to prices and signaled plans to phase out fiscal stability agreements, potentially affecting major miners including Newmont (NYSE: NEM), Gold Fields (JSE: GFI), AngloGold Ashanti (NYSE: AU), Zijin, and Perseus (ASX: PRU). Buah told a news conference in Accra that Ghana’s Minerals and Mining Act, 2006, has been in existence for nearly two decades and needs to be overhauled to create an updated, consistent, and forward-looking legislative framework for the sector.
“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 legislation also establishes district mining committees, providing host communities an early say in the licensing process.
Reconnaissance and prospecting licences will be replaced with a single exploration licence valid for five years, with extensions based on a review of an initial two-year work schedule.
“If for five years you can’t act, we will take it from you” , According to Buah, the proposal targets speculators who own licenses but do not invest in exploration.
Mining leases would remain limited to 20 years, but firms would be compelled to sign separate community development agreements negotiated directly with host communities rather than made unilaterally by the mining company, he added.
