Anglogold Ashanti skeptical about government's planned review of stability agreement

Anglogold Ashanti has confirmed to JOY BUSINESS that government's plan to review its stability agreement could face some difficulties.

Government earlier this year set up a committee to re-negotiate its stability agreement with AngloGold Ashanti and Newmont Ghana. Whiles government could sail through with Newmont's agreement, AngloGold's might not be possible.

Vice President at Anglogold Ashanti, Kwame Addo-Kuffour attributed this to the company's earlier agreement with government which has seen its taxes for the next 15 years converted into shares for the state.

Government in 2004 signed a stability agreement with Anglogold which saw the company make a financial commitment of some 100 million dollars to the state - translating into about 2.5 million shares. Government however recently sold part of the shares leaving just about 1.6 pecent stake in the company.

The stability agreement spells out rights and privileges, usually guaranteed the mining firms over a number of years. This is to protect their investments in the country.

The National Coalition on Mining however want government to completely scrap the stability agreements or introduce clauses which allow for periodic reviews taking cognizance of the economic conditions at any given time.

Story by Emmanuel Agyei / George Wiafe - Joy Business