Ghana is considering transferring control of the Gold Fields Tarkwa mine to local firms when its leases expire next April, as part of a push to increase control over its gold industry and capture more of the proceeds from high bullion prices.
The Ghanaian miners will need to submit bids for evaluation if the government goes ahead with the plan, people with knowledge of the matter said, asking not to be identified as the discussions are preliminary. The authorities are also weighing the option of extending the leases for Gold Fields, Bloomberg reported.
Ghana, Africa’s biggest gold producer, has moved to increase its share of mining revenue, raising royalties on bullion to as much as 12% from 5% and restricting bids for a former Gold Fields mine to local companies. The loss of its biggest asset will be a blow for the South Africa-based Gold Fields, as it accounted for a fifth of the company’s total output last year.
Economic Gains at Home
Gold Fields has “submitted an early application for the renewal of the Tarkwa mining leases. These constructive engagements are continuing,” the company said.
The administration will assess bids based on commitments to environmental rehabilitation, local employment, and infrastructure development in host communities. Officials believe transferring ownership of the Tarkwa mine could create additional opportunities for Ghanaian engineers, suppliers, and entrepreneurs.
The mine produced 475,000 ounces of the metal last year. The company is working on a 20-year operations and investment plan for Tarkwa, Chief Executive Officer Michael Fraser said on ChannelOne TV last month.
Earlier this year, Gold Fields transferred its other Ghanaian operation, the mature Damang mine, to the state when its lease expired. The government held a tender to select a new owner for the asset, which was won by Engineers and Planners Co. Ltd., a firm that belongs to Mahama’s brother and holds mining contracts at both Tarkwa and Damang.
Gold Fields, which operates mines across Africa, Australia and South America, produced about 2.5 million ounces of gold last year.