Ghana to End Mining Stability Agreements and Increase Royalties Under New Reforms

Ghana Plans to Scrap Mining Stability Agreements and Double Gold Royalties as Prices Surge

Ghana is set to abolish long-term mining investment stability agreements and significantly increase gold royalties under sweeping reforms aimed at allowing the state to capture greater value from elevated bullion prices, the country’s mining regulator has confirmed.

The reforms form part of a broader overhaul of Ghana’s mining framework, intended to balance investor confidence with the government’s drive to increase revenue from the sector, Mr Isaac Tandoh, Acting Chief Executive Officer of the Minerals Commission, told Reuters in an interview in Accra.

Across Africa, governments are tightening mining regulations to capitalise on high commodity prices, often through higher royalties and stricter local-content requirements—moves that have periodically sparked disputes with international mining firms over costs and contractual certainty.

In Ghana, Africa’s largest gold producer and the world’s sixth-largest, mining stability and development agreements have traditionally locked in tax and royalty terms for five to 15 years in exchange for investments typically ranging between US$300 million and US$500 million for mine development and expansion.

To qualify for renewal, companies must also extend mine life by at least three years and increase production by more than 10 per cent, among other conditions.

Major producers Newmont, AngloGold Ashanti, and Gold Fields currently operate under stability agreements. The companies did not immediately respond to requests for comment.

Mr Tandoh said the proposed legal changes mean Newmont’s stability agreement, which expired in December, will not be renewed. Similar agreements held by AngloGold Ashanti and Gold Fields will be allowed to lapse when they expire in 2027.

A draft bill expected to be presented to Parliament by March proposes a new royalty regime starting at 9 per cent and rising to 12 per cent if gold prices reach US$4,500 per ounce or higher—roughly double the current 3 per cent to 5 per cent range. Spot gold is currently trading at around US$4,590 per ounce.

The reforms also include tougher local-content requirements, increased in-country procurement obligations, and enhanced support for Ghanaian-owned firms.

“Renewal of investment stability agreements is not going to happen,” Mr Tandoh said. “Renewal is conditional, not automatic.”

He added that development agreements would be scrapped entirely, citing widespread abuse of the framework.

“We have seen companies use revenue generated in Ghana to acquire assets elsewhere, while failing to meet basic obligations such as contributions to district assemblies. That cannot continue,” he said.

Newmont Sought Extension of Expired Agreement

Ghana pioneered stability agreements in the early 2000s, a policy that helped attract billions of dollars in foreign investment and enabled the country to overtake South Africa as Africa’s top gold producer.

Newmont’s Ahafo Mine agreement, for instance, set a 32.5 per cent corporate tax rate and a sliding royalty of 3 per cent to 5 per cent—rising to 3.6 per cent to 5.6 per cent in forest reserve areas—alongside duty and VAT exemptions on qualifying inputs.

An extension was tied to a minimum US$300 million investment, output targets, mine life extensions, and commitments to Ghanaian employment, according to a revised 2015 agreement reviewed by Reuters.

Mr Tandoh said Newmont had requested an extension, but the government now intends to phase out the stability agreement regime in favour of a uniform regulatory framework that retains more value domestically and enforces stricter compliance.

He noted that authorities were listening to concerns from smaller and new mining projects regarding the proposed royalty increases and would seek a pricing formula that preserves investment incentives while boosting state revenue during periods of high gold prices.

Mr Tandoh dismissed concerns that tougher terms would deter investment.

“Mining companies operate under far harsher conditions elsewhere and still make profits. Mining is about numbers,” he said.

The Ghana Chamber of Mines did not immediately respond to requests for comment.