Ghana’s Miners Pitch Flexible Royalty Deal to Capture Gold Boom Without Long-Term Damage

Accra — Ghana’s mining industry has put forward a counter-offer to government that seeks to balance higher state revenues with long-term sector stability, proposing a sliding royalty regime of between four and eight per cent, the removal of the Growth and Sustainability Levy, and the creation of a one per cent net-profit community development fund.

The proposal, drafted and submitted by the Ghana Chamber of Mines, is designed to allow the state to benefit from elevated global gold prices without locking fiscal policy into what industry leaders describe as a potentially short-lived commodity cycle.

Speaking on Joy News’ PM Express Business Edition, the Chamber’s Chief Executive Officer, Ken Ashigbey, said the mining industry supports fair taxation but cautioned against permanent fiscal decisions driven by temporary price spikes.

“You see, eating on a constant and continual basis is better than eating one large meal once,” Mr Ashigbey said, warning policymakers against what he described as an “Esau mentality” in public finance.

“This phenomenon is a short-term phenomenon. You don’t take decisions that are long-term in nature just based on the phenomenon,” he added.

Sliding Royalties, Not Fixed Burdens

The Chamber’s proposal follows government’s draft legislative instrument on mining royalties, which industry players argue could raise costs permanently even if gold prices retreat.

“When the LI came, we made an offer,” Mr Ashigbey said.

At the centre of that offer is a flexible royalty framework that rises and falls with market conditions, replacing the current structure with a system that adjusts automatically to price movements.

“Instead of now you sliding from where you are, slide down to 4% and slide up all the way to 8%,” he explained.

Under the model, royalties would increase during periods of high gold prices but fall when prices soften, ensuring that the tax burden remains aligned with industry margins.

“When prices come down to a particular $1,900, you then would do a 4%,” he said. “It’s not that you are only sliding up, but you’re sliding both up and down.”

The Chamber is also proposing the complete removal of the Growth and Sustainability Levy, which it argues compounds costs without responding to market cycles.

“We take GSL off, then slide between four and eight per cent,” Mr Ashigbey said.

Community Development as Prices Rise

Beyond royalties, the mining industry is offering an additional concession: a one per cent contribution from net profits to a dedicated community development fund during high-price periods.

“One of the things that we believe should happen is that the people in these mining communities should be able to point to the fact that when the prices of gold hit the roof, we were able to do this project,” Mr Ashigbey said.

Under the proposal, mining communities would see visible benefits—such as infrastructure and social investments—directly linked to commodity price booms.

“As part of our offer to government was to say that we would add a 1% that is taken off net profit and put that into a fund that we use for community development,” he said.

Revenue Through Volume, Not Volatility

Mr Ashigbey stressed that the Chamber is not resisting taxation, but advocating a structure that maximises government revenue over time rather than during short-lived peaks.

“We are all open to fair taxation. That is something that we are not arguing about,” he said.

He argued that flexible royalties encourage production growth, which ultimately benefits the state.

“When you compute royalties, it is the price times your volumes times the royalty,” he said. “If you are able to keep the price up and still keep the royalties up, then what you would get on a sustainable basis would be better.”

Strong margins during high-price periods, he added, allow mining companies to reinvest, expand output and sustain employment—factors that support longer-term fiscal inflows.

Bringing Small-Scale Mining Into the Net

The Chamber also called for broader inclusion of the small-scale mining sector in national revenue mobilisation efforts, noting its growing contribution to gold output.

“Small-scale sector did more than half of what the large-scale sector did,” Mr Ashigbey said.

He argued that once engagement with regulators is completed and rates are appropriately structured, small-scale miners could also contribute meaningfully to government revenues.

“They would also be able to put a bit into the kitty,” he said, adding that a unified framework covering both large- and small-scale operators would strengthen fiscal sustainability.

As government considers reforms to Ghana’s mining fiscal regime, the Chamber’s proposal underscores a central tension facing resource-rich economies: how to capture windfalls from commodity booms without undermining investment, production and long-term growth.

Source: Accra Business News