Ghana’s Mining Framework Not Outdated — Chamber of Mines

The Ghana Chamber of Mines has rejected claims by the Institute of Economic Affairs (IEA) that the country’s mining fiscal framework is outdated and overly dependent on royalties, describing the assertion as inaccurate and misleading.

In a statement, the Chamber maintained that Ghana operates a royalty–tax regime rather than a royalty-only system, stressing that the current structure is consistent with global best practices in managing mineral resources.

According to the Chamber, Ghana’s mining sector is regulated through a mix of fiscal instruments, including mineral royalties ranging from 5% to 12%, a 1% Growth and Sustainability Levy (GSL), a 35% corporate income tax, and dividend inflows from the state’s 10% free carried interest in mining operations.

“These instruments ensure that the state captures value at different stages of the mining value chain, not just through royalties,” the statement said, adding that it is incorrect to suggest royalties are the sole or dominant source of mining revenue.

The Chamber further noted that the combined effect of these fiscal measures places Ghana among the highest-tax mining jurisdictions globally, with an effective tax rate approaching 60% under current conditions.

While acknowledging the government’s recent decision to reduce the Growth and Sustainability Levy from 3% to 1%, the Chamber said the adjustment, though appropriate, does not significantly ease the overall burden on mining companies.

It warned that overlapping taxes on gross revenue, such as royalties and the GSL, could weaken competitiveness and potentially reduce government revenue over time if not properly managed.

The Chamber also rejected the IEA’s description of the fiscal regime as a “colonial relic,” insisting that the royalty–tax model is widely applied in major mining jurisdictions, including Botswana, Chile and Burkina Faso.

On mineral ownership, the Chamber clarified that Ghana has not relinquished control of its natural resources to investors, explaining that mining leases grant only the right to mine and do not transfer ownership of minerals from the state.

The industry body further criticised proposals for government to halt the renewal of mining leases, describing such suggestions as impractical and potentially harmful to the economy.

It argued that such a move would effectively require the state to take over all mining operations, which could undermine investment and contradict efforts to increase indigenous participation in the sector.

Highlighting local involvement, the Chamber noted that Ghanaian nationals already own some large-scale mines, account for more than 55% of gold production, and are responsible for all bauxite and diamond output. It also added that over 99% of employees in large-scale mining are Ghanaians.

These indicators, it said, demonstrate that key benefits often associated with state-led mining models, including local participation, skills transfer and value addition, are already being achieved under the current framework.

The Chamber urged government to strike a balance between revenue mobilisation and sector sustainability, warning that fiscal instability could discourage investment in the capital-intensive mining industry.

It also renewed calls for a broader review of the fiscal regime, including a possible reduction of the Growth and Sustainability Levy to zero, to protect long-term competitiveness and investment.

“The objective should be to maximise national benefit not only through taxes, but through sustained production, investment and value creation,” the statement added.