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"Global Mining Descisions in Your Palms"
In a deal that has set tongues waging in the mining community, Newmont Company’s decision to sell its Akyem Gold Mine in Ghana to China’s Zijin Mining Group for $1.0 billion has sparked waves of concern. As the dust settles on the announcement, industry insiders and stakeholders are left questioning the implications of such a sale, particularly whether it serves the best interests of Ghana.
This is not merely a transaction but it is a crossroad for the future of Ghana’s mining sector, especially its role in the global gold economy. Newmont’s Akyem lease, originally signed in January 2010, has a 15-year lifespan, expiring in January 2025. According to the agreement, any sale or transfer of the mine is subject to mutual consent between the government of Ghana and Newmont, and such consent must cover only the remaining period of the lease. The dilemma, however, arises as the IEA (Institute of Economic Affairs) warns that there has been no agreement or mutual decision reached to extend this lease.
What is more troubling, perhaps, is that the sale to Zijin flies in the face of an earlier assurance made by Ghana’s President in his State of the Nation Address. There, he vowed to prioritize local investors in any acquisition deals concerning national mineral resources. Fast forward a few months, and Ghanaian bidders find themselves sidelined, outbid by a foreign mining giant. The IEA has highlighted this inconsistency, asking, “The question is: what has changed now for the President to set aside his own principle and reject Ghanaian investors in favour of a foreign company?”
Additionally, the IEA describes this sale as flawed not only because it overlooks the president’s earlier promise but because it perpetuates a deeper, systemic issue. For decades, Ghana, like many other African nations, has ceded its mineral wealth to foreign entities for paltry returns in the form of royalties and taxes. The sale to Zijin, they argue, fits into this.
The numbers do not lie, with an average annual gold production of 11.4 tonnes and gold prices hovering around $2,600 per ounce, the mine could generate over $1 billion annually for its owners. Yet, in this deal, the $1 billion price tag would go entirely to Newmont. What does Ghana get in return? Minimal royalties and taxes, a fraction of the wealth the mine produces. This equation, critics argue, leaves the country worse off.
By selling to local investors, Ghana could have kept this wealth within its borders, funneling it back into national development and poverty alleviation.
Furthermore, the IEA also calls on Ghana to take a cue from Canada. When Zijin sought to buy a stake in Canadian copper company Solaris Resources, the Canadian government stepped in, limiting the foreign entity’s involvement on the grounds of national security. Canada understands the strategic importance of controlling its critical minerals—and Ghana, the IEA argues, must follow suit. As the IEA further underscores, “Ghana must take a cue from Canada and similarly protect its national security and economic interest.”
This is not an indictment of Zijin or foreign investors per se. Rather, it is a call for a paradigm shift in how Ghana manages its natural resources. At stake is the country’s ability to harness its gold mines for national development, to extract maximum value from its minerals, and to break the cycle of dependency on foreign capital.
The IEA does not just stop at criticism but it offers a way forward. First, Ghana must reconsider how its mineral wealth is governed. One proposed reform is to amend the constitution to vest ownership of natural resources in the state, not the president, thereby ensuring that no single individual has unchecked power over the country’s riches.
Moreover, any mining contracts signed within six months of an administration’s end should be prohibited, ensuring that leaders cannot rush through deals for personal or political gain. Such measures would go a long way in curbing corruption and promoting transparency in how Ghana’s resources are managed.
Then, the IEA calls for a shift away from concession-style mining contracts towards production-sharing agreements, where Ghana would retain a larger portion of the profits. By resourcing its Geological Survey Department, Ghana can map out its mineral deposits and use this knowledge as collateral to raise capital, reducing reliance on foreign investors.
On the same note, the sale of Newmont’s Akyem Gold Mine to Zijin represents a critical juncture for Ghana. It is not just another business transaction but a reflection of the choices that Ghana must make about the future of its mining industry. Will the country continue to sell its birthright to foreign corporations, or will it seize the opportunity to take control of its resources, invest in local capacity, and ensure that the wealth generated stays within its borders?
Conclusively, as the debate unfolds, one thing is clear -Ghana’s mining future hangs in the balance, and the decisions made today will shape the country’s trajectory for years to come.