Ghana introduces new gold royalty regime despite pressure from US and China

Ghana is moving ahead with a new sliding-scale royalty system for gold mining despite opposition from major global powers and mining companies concerned about rising production costs.

The country, which is the largest gold producer in Africa, will replace the existing flat 5 per cent royalty with a variable system ranging from 5 per cent to 12 per cent depending on the price of gold.

Under the new framework, mining companies will pay a maximum 12 per cent royalty when gold prices exceed $4,500 per ounce. Gold prices are currently trading above $5,000 per ounce, meaning the higher band could apply immediately once the policy takes effect.

The policy, announced by the country’s mining regulator, will link government royalties directly to international gold prices. Officials say the change will allow the state to capture a larger share of revenues when commodity prices rise.

The reform has triggered an unusually coordinated diplomatic response. Officials from the United States, China and several Western countries have urged Ghana to reconsider the policy, warning that higher royalty rates could discourage investment in the mining sector.

Executives from major mining companies have also raised concerns. The Ghana Chamber of Mines warned that the upper end of the royalty structure could make Ghana one of the most expensive mining jurisdictions in Africa and potentially reduce new exploration projects.

However, Isaac Tandoh said foreign governments had expressed concerns mainly about the highest rate rather than the broader policy shift.

“They met us, they are not against the review in principle,” Tandoh said, noting that diplomatic missions had suggested raising the price threshold for the 12 per cent royalty to $5,000 per ounce. Ghana rejected that proposal.

Authorities argue that the new system strikes a balance between attracting investment and ensuring the country receives a fair share of profits generated from its mineral resources.

The reform will also extend to lithium, another mineral gaining global attention due to its role in battery production for electric vehicles.

Lithium royalties will move to a sliding scale from 5 per cent to 12 per cent, depending on market prices between $1,500 and $3,200 per metric ton.

Royalties for other minerals will remain unchanged at 5 per cent.

The policy forms part of a broader trend across Africa as governments seek to capture more value from natural resources amid strong global commodity prices.

In recent years, several countries across the continent have explored changes to mining taxes, royalty systems and ownership structures as they attempt to increase revenues from strategic resources.

Ghana’s government maintains that the new framework is designed to ensure that higher commodity prices translate into higher national income while maintaining stability for investors operating in the country’s mining sector.

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