Bloomberg News

AngloGold, Newmont Mine Deals Face Ghana Government Review

February 01, 2012

(Updates with comment from Duffuor in fourth paragraph.)

Jan. 31 (Bloomberg) -- Ghana’s government formed a committee to review and renegotiate mining deals including the stability agreements it has with AngloGold Ashanti Ltd. and Newmont Mining Corp., said Finance Minister Kwabena Duffuor.

The objective “is to ensure that the country’s mineral resources are maximized, sustained and distributed to the good of the country,” he told reporters in Accra, the capital, today. The committee will be headed by Akilagpa Sawyerr, a former vice-chancellor of the University of Ghana, Duffuor said.

Ghana, Africa’s second-biggest gold producer, is seeking to earn more from output of the precious metal as exports reached a value of $4.5 billion in the 11 months through November, according to the country’s central bank.

The committee will look at any parts of the stability deals that are “not in the best interest of the country,” Duffuor said. The group will “prepare a framework” to govern stability agreements and will “redesign any existing mining agreements” or draft new ones so the country benefits from infrastructure, social development and greater transparency, he said.

Raising Taxes

Ghana’s 10 percent carried interest in mining ventures has “brought in very little revenue as many of the mining have not declared much by way of dividends,” Duffuor said.

In November, Ghana announced a plan to raise the tax rate on mining companies to 35 percent from 25 percent and introduce a windfall tax of 10 percent. Ghana also produces diamonds, bauxite and manganese.

In 2010, Ghana changed mining-royalty rates to a fixed 5 percent, from a floating 3 percent to 6 percent. South Africa’s AngloGold Ashanti and Newmont of Greenwood, Colorado, have stability agreements fixed at 3 percent.

John Owusu, AngloGold’s general manager of corporate and community relations in Ghana, said he was on leave and couldn’t immediately comment. Adiki Ayitevie, regional manager of communications at Newmont in Accra, didn’t immediately respond to an e-mailed request for comment.

--Editors: Emily Bowers, Alastair Reed

To contact the reporter on this story: Moses Mozart Dzawu in Accra at mdzawu@bloomberg.net

To contact the editor responsible for this story: Emily Bowers at ebowers1@bloomberg.net


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