Major gold producer Ghana to double mining royalties
Ghana's relatively new government is making its presence felt with a series of announcements relating to foreign investment including a doubling of mining royalties.
Posted: Thursday , 19 Nov 2009
ACCRA (Reuters) -
mineweb.com
Ghana plans to double the amount mining companies pay in royalties as part of a broader effort to boost government revenues from the sector, the country's finance minister said on Wednesday.
The move could dent the profitability of mines in Africa's second biggest gold producer and adds to investor worries stirred earlier this year when the country announced reviews of two major deals involving U.S. oil major Exxon Mobil and UK-based mobile phone company Vodafone.
Ghana Finance Minister Kwabena Duffuor, presenting the nation's 2010 budget to parliament, said the government will double minerals royalties to 6 percent.
"In addition, government will engage all mining companies to address the issue of dividend payment, exemptions and the whole mining sector fiscal regime," he said.
The move comes as Ghana attempts to boost spending in 2010 by more than 20 percent to accelerate its economic growth.
MINERS IN THE DARK
Ghana's vast mineral resources have attracted major international miners including South Africa's AngloGold Ashanti (ANGJ.J: Quote) and U.S.-based Newmont (NEM.N: Quote).
A spokesman for AngloGold said the company had not been informed of a royalty hike and did not expect to have to pay up due to a "stability" agreement made with a previous regime. "We expect our prior agreement to be honored," he said.
A spokesman for Newmont, meanwhile, said a substantial increase to royalties in Ghana would "severely reduce returns on investment if it does not also take into account rising production costs."
Ghana's relatively new government has already raised concerns in the investment community this year.
The government of John Atta Mills, who came to power in January after a knife-edge election, declared last month that a reported multi-billion dollar deal by Exxon Mobil (XOM.N: Quote) to get into Ghana's offshore oil sector would be illegal.
More recently, the goverment said it would review aspects of British company Vodafone's (VOD.L) $900 million purchase of a stake in Ghana Telecom in August 2008 after an intergovernmental commission said it appeared unconstitutional. However it stopped short of an original threat to abrogate it.
Officials at other gold mining companies operating in Ghana did not immediately comment.
Ghana is also the world's No. 2 cocoa producer and plans to start up commercial crude oil production at the end of 2010.
(Reporting by Kwasi Kpodo and Richard Valdmanis; writing by Richard Valdmanis; Editing by Sue Thomas and Keiron Henderson) |
