China, US Pressure Ghana to Halt Gold Royalty Hike, Document, Sources Say
China, the U.S. and other Western governments have mounted an unusually coordinated push to get Ghana to halt a gold royalty hike they say could harm some of the world’s biggest miners, according to three sources with knowledge of the matter and a letter from an industry body.
Africa’s largest gold producer wants to replace its fixed 5% royalty with a sliding scale between 5% and 12% linked to bullion prices – part of an effort to capture more revenue from gold’s run to successive historic highs.
Miners said the upper bands of the new regime, which could take effect as early as next week unless amended or withdrawn, would make Ghana one of the continent’s most expensive jurisdictions and could squeeze margins.
Ghana has agreed to cut an existing levy to ease passage of the reform, Reuters has reported, but mining companies say the proposed scale remains too aggressive and have submitted lower counter-rates.
Diplomatic Pressure
In addition to U.S. and Chinese pressure, diplomatic missions from the UK, Canada, Australia and South Africa have also intervened, marking what three senior industry executives described as an unusually high-level response to a fiscal proposal.
“This is the first time I’ve seen the diplomatic community get involved at this scale,” a senior industry source said.
Representatives from the missions met Ghana’s lands and natural resources minister this month and presented a joint document outlining concerns, two people with direct knowledge of the meeting said. The group is seeking further talks with the finance minister.
“The heads of missions expressed concern that the operating environment of the mines will be challenging,” one executive said. All the sources requested anonymity because of the sensitivity of the matter.
The UK, Canadian and Australian High Commissions and the U.S., South African and Chinese embassies in Accra did not immediately respond to requests for comment.
Mining CEOs Voice Concerns
Global mining CEOs have also privately pushed back. Leaders of Newmont, Gold Fields, AngloGold Ashanti and Perseus wrote or delivered concerns directly to the lands minister in December and January.
A letter from the Association of China–Ghana Mining, copied to Beijing’s ambassador and seen by Reuters, warned the proposal could threaten the viability of Zijin’s Akyem, Chifeng’s Wassa and Shandong’s Cardinal gold mines.
“The royalty issue has united companies like nothing in recent years,” said the senior industry source.
Source: Reuters
Click to read more: https://opemsuo.com/author/hajara-fuseini/
