Ghana will move ahead on Tuesday with a new sliding-scale gold royalty regime that links state revenue to global bullion prices, despite opposition from the United States, China, and several Western governments, as well as mining industry executives.
According to Reuters, the policy forms part of a broader push by African governments to capture greater value from rising commodity prices.
The new system will replace the existing flat 5 percent royalty rate currently applied to gold production in the country, which remains Africa’s top gold producer.
Under the proposed framework, miners will pay up to 12 percent royalties when gold prices reach $4,500 per ounce. Gold is currently trading above $5,000 per ounce, according to market data reviewed by Reuters.
The policy will also introduce a sliding-scale royalty regime for lithium, ranging between 5 and 12 percent, depending on global prices between $1,500 and $3,200 per metric tonne, while other minerals will continue to attract a flat 5 percent royalty rate.
Regulator Defends Policy
The Chief Executive Officer of the Minerals Commission, Isaac Tandoh, said diplomatic missions had raised concerns mainly about the proposed 12 percent royalty ceiling but were not opposed to the overall policy direction.
“They met us; they are not against the review in principle,” he told Reuters.
According to Mr. Tandoh, some diplomatic missions proposed that the 12 percent royalty rate should only apply when gold prices exceed $5,000 per ounce, but Ghanaian authorities rejected the suggestion.
Industry Concerns
The proposed regime has also drawn criticism from global mining companies.
Executives from some of the world’s largest gold producers have warned that the policy could discourage investment in Ghana’s mining sector.
The Ghana Chamber of Mines has also raised concerns.
Its Chief Executive Officer, Kenneth Ashigbey, warned that the new royalty structure could reduce new mining projects and slow production growth.
Government Maintains Policy Balance
However, Mr. Tandoh insisted that modelling conducted by the regulator indicates the sliding-scale system strikes a balance between increasing government revenue and maintaining profitability for mining companies.
He also dismissed fears that Ghana could lose competitiveness, arguing that investors value regulatory stability more than minor changes in operating costs.
