Proposed mining royalty hikes could undermine sector stability — Chamber of Mines
The Ghana Chamber of Mines has issued a warning that proposed adjustments to the country’s mining fiscal framework—particularly possible increases in royalty rates—could discourage investment, lead to job losses, and jeopardise the long-term sustainability of the mining industry.
The Chamber noted that the government already takes between 45 and 60 per cent of profits generated by mining operations, a level that places Ghana among countries with the highest government share in the global mining sector.
It cautioned that any additional fiscal pressure, especially in the form of higher royalties, would significantly constrain the ability of mining companies to operate sustainably and remain competitive.
The Chamber further argued that the recent rise in gold prices is part of a cyclical trend and should not be used as a basis for introducing permanent increases in royalties or other fiscal charges. It emphasised that commodity price booms are often followed by sharp downturns.
Concerns were also raised over proposed amendments to the Minerals and Mining Act, including suggestions to reduce the duration of mining leases. According to the Chamber, such changes run contrary to international best practices and could discourage long-term capital investment in the sector.
While acknowledging the strong contribution of the mining sector to the economy—particularly the more than 51 per cent increase in mining fiscal payments recorded in 2024, driven largely by large-scale operators—the Chamber warned that imposing excessive royalty obligations could undo these recent gains.
“The challenge is the choice of price range and applicable rates, as well as whether it is surcharged on gross revenue or net margin. Currently, the sum of royalty and GSL puts the effective royalty rate at more than. 10% of gross revenue. Upward revision of the generic royalty rate would derail the viability of most mines and the country’s competitiveness relative to its peers”, Chief Executive Officer of the Ghana Chamber of Mines, Dr Ing. Kenneth Ashigbey told the press during a presentation on Tuesday.
The Chamber clarified that it does not oppose the government’s proposal in principle to introduce a sliding-scale royalty system designed to reflect fluctuations in mineral prices.
However, it stressed that the success of such a framework would depend on carefully selected price bands, appropriate rates, and whether royalties are applied to gross revenue or net margins.
At present, the Chamber explained that the combined impact of royalties and the Growth and Sustainability Levy (GSL) already places the effective royalty burden above 10 per cent of gross revenue. It warned that any further increase in the generic royalty rate would significantly weaken the viability of most mining operations and reduce Ghana’s competitiveness compared to other mining jurisdictions.
