Higher mining royalties could cripple investment and jobs — Chamber of Mines warns

Chief Executive Officer of the Ghana Chamber of Mines, Dr Ing Kenneth Ashigbey

The Ghana Chamber of Mines has issued a strong caution against proposed changes to the country’s mining fiscal framework, warning that increases in royalty rates could severely weaken investment confidence, lead to job losses and destabilise the long term future of the sector.

The Chamber says the state already captures an estimated 45 to 60 percent of profits generated by mining companies, a level it describes as one of the highest government takes in the global mining industry. According to the industry body, any further tightening of the fiscal regime would leave operators with little room to remain viable or competitive.

It cautioned government against using the current surge in gold prices as justification for permanent increases in royalties and other charges. The Chamber stressed that commodity price booms are cyclical and often followed by sharp downturns, making rigid fiscal hikes risky and unsustainable.

Concerns were also raised about proposed amendments to the Minerals and Mining Act, particularly suggestions to shorten the tenure of mining leases. The Chamber described such measures as inconsistent with international best practice and likely to discourage the long term capital investment required for large scale mining projects.

While acknowledging the sector’s growing contribution to the national economy, the Chamber noted that mining fiscal payments increased by more than 51 percent in 2024, largely driven by large scale mining firms. It warned, however, that excessive royalty burdens could quickly erode these gains.

Speaking at a press briefing on Tuesday, Chief Executive Officer of the Ghana Chamber of Mines, Dr Ing Kenneth Ashigbey, said the real concern lies in how royalty rates are structured and applied.

“The issue is the choice of price range and the applicable rates, as well as whether royalties are imposed on gross revenue or net margins. Currently, the combined effect of royalties and the Growth and Sustainability Levy pushes the effective royalty rate to above 10 percent of gross revenue. Any upward revision of the generic royalty rate would derail the viability of most mines and undermine Ghana’s competitiveness compared to its peers,” he said.

The Chamber said it does not oppose government’s proposal for a sliding scale royalty system in principle, noting that such an approach can help reflect fluctuations in mineral prices. However, it stressed that the success of such a system depends heavily on carefully defined price bands, reasonable rates and whether the tax burden is based on gross revenue or actual profit margins.

It reiterated that the current combination of royalties and the Growth and Sustainability Levy already places a heavy burden on operators, warning that further increases would significantly weaken Ghana’s standing as an attractive mining destination.

The Chamber is therefore calling for deeper engagement between government and industry stakeholders, urging authorities to strike a balanced approach that allows the state to mobilise revenue without sacrificing investment, jobs and the long term sustainability of the mining sector.