Ghana Ends Mining Stability Agreements Era as Government Doubles Royalties Amid Soaring Gold Prices

Ghana will scrap long-term mining investment stability agreements and approximately double royalties under sweeping reforms as Africa’s top gold producer seeks to capture greater benefits from surging bullion prices that recently reached record highs above $4,600 per ounce. The changes mark a dramatic policy shift for a country that pioneered these preferential agreements in the early 2000s to attract billions of dollars in foreign investment.

The reforms represent part of a broad overhaul aimed at balancing investor confidence with the government’s push to reap greater rewards from mining, Isaac Tandoh, acting CEO of the Minerals Commission, told Reuters in an interview in Accra. The announcement reflects Ghana’s participation in a wider African resource nationalism trend that has seen 31 countries on the continent reform their mining codes since 2014 to increase government and local community participation in resource exploitation.

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End of an Era for Stability Agreements

In Ghana, the world’s sixth-biggest gold-producing country, stability and development agreements typically lock in tax and royalty terms for five to 15 years in exchange for investments of about $300 million to $500 million for mine builds and expansions. Companies must also extend mine life by at least three years and lift output by more than 10%, among other conditions, to qualify for renewal.

Newmont, AngloGold Ashanti, and Gold Fields currently operate under stability agreements that have provided fiscal certainty for their major operations in the country. The companies did not immediately respond to requests for comment when contacted about the policy changes.

Tandoh said the changes, to be written into law, mean Newmont’s stability agreement—which expired in December—will not be renewed. Similar arrangements held by AngloGold Ashanti and Gold Fields will be phased out when they lapse in 2027. The acting CEO emphasized that renewals are “conditional, not automatic” and that the government aims to move toward a more equitable framework.

“Renewal of investment stability agreements is not going to happen,” Tandoh declared during the interview last week. “Renewal is conditional, not automatic.” He added that development agreements will be scrapped entirely as they have been abused, citing instances where “companies use revenue from Ghana to buy mines elsewhere while refusing to pay even basic obligations like contributions to district assemblies.”

Dramatic Royalty Increase Tied to Gold Prices

A draft bill expected to go to Parliament by March proposes royalties starting at 9% and rising to 12% if gold hits $4,500 per ounce or higher, roughly double the current 3%–5% range. This sliding scale represents a significant departure from existing arrangements and directly ties government revenue to commodity price performance—a key feature of what analysts describe as “economic resource nationalism.”

The timing of the announcement proves particularly significant given current market conditions. Spot gold is currently trading around $4,590 per ounce as of January 15, 2026, well above the $4,500 threshold that would trigger the maximum 12% royalty rate under the proposed legislation. Gold prices have surged approximately 72% over the past year, driven by geopolitical uncertainty, safe-haven demand, and concerns about central bank independence.

The proposed royalty structure would represent more than a doubling from Newmont’s Ahafo pact, which set a sliding royalty of 3%–5%, rising to 3.6%–5.6% in forest reserve areas. That agreement, revised in 2015 and seen by Reuters, also established a 32.5% corporate tax rate and provided duty and VAT relief on qualifying inputs. The extension had been tied to a minimum $300 million investment and targets on output, mine life, and Ghanaian employment.

Tandoh acknowledged that authorities were “listening” to concerns from smaller and new projects about the proposed royalty increase and would aim for a formula that preserves investment while lifting revenue when prices are high. However, he rejected suggestions that the tougher terms would scare off capital, noting that mining companies “operate under harsher conditions elsewhere and still make profits. Mining is about numbers.”

Ghana’s Rise as Africa’s Gold Leader

Ghana pioneered stability agreements in the early 2000s, helping unlock billions of dollars of foreign investment that enabled it to overtake South Africa as Africa’s top gold producer. The country’s status as a mining powerhouse rests on substantial production volumes and favorable geology concentrated in the Ashanti Gold Belt and Western Region Goldfields.

According to various reports, Ghana overtook South Africa as the largest gold producer on the African continent in 2018, though some analysts suggest the transition may have occurred earlier if undeclared artisanal and small-scale mining production were fully accounted for. The country produced approximately 130,000 kilograms of gold in 2024, representing an 8.5% increase compared to 2023 and contributing to the nation’s position as Africa’s leading producer.

Ghana’s gold exports reached $11.6 billion in 2024, representing a 52.6% increase from $7.6 billion in 2023. This dramatic growth reflects both increased production volumes and the substantial appreciation in gold prices over the period. Gold dominates Ghana’s mineral sector, contributing over 90% of total mineral exports and accounting for approximately 7% of the country’s gross domestic product.

The mining sector has emerged as the largest source of domestic tax revenue, with companies contributing a record 11.55 billion Ghanaian cedis (approximately $980 million) in taxes during 2023. The sector also represents over 50% of foreign direct investment into Ghana, underscoring its central importance to the national economy and development strategy.

Broader African Resource Nationalism Wave

Ghana’s policy shift aligns with a growing trend of resource nationalism across Africa, where governments are asserting greater control over natural resources through various mechanisms including increased royalties, higher state participation, local content requirements, and contract renegotiations. This movement accelerated as commodity prices surged and governments sought to capture what they view as fair value from resource extraction.

Since 2014, approximately 31 African countries have reformed their mining codes to increase government and local community participation in resource exploitation. These reforms have manifested through multiple channels, with some countries taking more aggressive approaches than others depending on political circumstances, economic needs, and commodity price movements.

The Democratic Republic of Congo revised its mining code in 2018, increasing royalties for copper and gold from 2% and 2.5% to 3.5%, respectively, while allowing cobalt mining fees to rise to 10% during periods of high demand. Mali’s 2024 mining code increased royalty rates for gold mines from approximately 6% to 10.5%, reflecting similar motivations to capture greater value from high commodity prices.

Countries including Nigeria, Zimbabwe, and Namibia have implemented export bans on unprocessed raw ore to promote mineral processing and value addition domestically. Nigeria prohibited raw ore exports in 2022 to “end the plunder of raw materials” and encourage local smelting and manufacturing development, while Namibia banned exports of unprocessed lithium ore in 2023.

Mali, Burkina Faso, and Niger have taken particularly assertive stances, with governments seeking to reclaim mining resources from foreign firms through legislative reforms, increased royalties and taxes, local content requirements, and in some cases direct state takeover of mining operations. The Malian government announced that the Yatela gold mine, previously exploited by foreign companies, is now entirely under state control following a retrocession agreement.

Local Content and Indigenization Push

The reforms also include tougher local-content rules for in-country procurement and support for Ghanaian firms, reflecting the government’s stated aim to “indigenise” more value at home and enforce stricter compliance. This aspect of the policy shift addresses longstanding concerns that foreign mining companies have extracted substantial wealth while providing limited benefits to local communities and domestic businesses.

Local content requirements typically mandate that mining companies source specified percentages of goods and services from domestic suppliers, employ Ghanaian workers in preference to expatriates where skills are available locally, and invest in training and capacity building to develop the domestic workforce. These provisions aim to create economic linkages between the mining sector and the broader Ghanaian economy.

The emphasis on indigenization reflects political pressure from constituencies who argue that Ghana’s mineral wealth should generate greater benefits for Ghanaian citizens and businesses rather than primarily enriching foreign shareholders. Tandoh’s comments about companies using “revenue from Ghana to buy mines elsewhere” while failing to meet basic local obligations captured this sentiment and provided political justification for the policy reforms.

Critics of excessive local content requirements warn that overly stringent mandates can increase operating costs, reduce efficiency, and potentially discourage investment if domestic supply chains lack capacity to meet mining sector needs at competitive prices and quality standards. The challenge for policymakers involves calibrating requirements to maximize local benefits without undermining the sector’s competitiveness or deterring necessary capital investment.

Investment Climate Implications

The elimination of stability agreements and substantial royalty increases raise significant questions about Ghana’s investment climate and the country’s ability to attract capital for future mining projects. Stability agreements have historically served as crucial risk mitigation tools for mining companies, which face long development timelines, massive upfront capital requirements, and extended payback periods that make fiscal predictability essential for project economics.

Mining companies typically require 7-15 years from initial exploration through development to commercial production, with investments often exceeding $500 million for major projects. The inability to lock in fiscal terms through stability agreements exposes companies to political risk, as governments may unilaterally change tax and royalty regimes in response to commodity price movements or political pressures.

Some reforms across Africa have triggered investment arbitration proceedings, notably against Tanzania and the Democratic Republic of Congo, where foreign investors have challenged government actions as breaching contractual commitments or bilateral investment treaties. Tanzania currently faces three arbitration proceedings related to mining disputes, while the DRC is involved in three similar cases, two initiated between 2023 and 2025.

However, Tandoh’s assertion that companies “operate under harsher conditions elsewhere and still make profits” reflects a calculation that Ghana’s favorable geology, established infrastructure, political stability, and productive mines will continue attracting investment despite less generous fiscal terms. The government appears confident that global mining companies will adapt to the new framework rather than exit what remains a world-class mining jurisdiction.

Industry observers note that the reforms’ impact will likely vary depending on commodity prices, project economics, and companies’ strategic priorities. Marginal projects with weaker economics may struggle to achieve acceptable returns under the new royalty structure, potentially slowing development of smaller deposits or higher-cost operations. However, well-established, low-cost operations like major gold mines may remain highly profitable even with increased government take.

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Record Gold Prices Driving Reform

The timing of Ghana’s reforms reflects strategic opportunism, as governments typically face less industry resistance to policy changes during periods of high commodity prices when mining companies enjoy strong profitability. Current gold prices trading above $4,600 per ounce represent record highs driven by multiple factors including geopolitical instability, safe-haven demand amid uncertainty about central bank independence, and resource nationalism creating supply constraints.

Gold’s remarkable rally has seen the metal surge approximately 72% since early 2025, with prices hitting fresh records in January 2026 following news that Federal Reserve Chair Jerome Powell was under criminal investigation. The metal’s performance has substantially outpaced most other assets, creating conditions where governments feel justified in demanding larger revenue shares from extraordinarily profitable mining operations.

Market analysts expect gold to potentially reach $5,000 per ounce in 2026, with some forecasters projecting continued upward momentum driven by persistent geopolitical tensions, monetary policy uncertainty, and what analysts describe as “resource nationalism” creating structural supply constraints. Jupiter Asset Management’s Ned Naylor-Leyland told CNBC it was “absolutely” possible for gold to touch $5,000 this year based on underlying factors driving the metal higher.

From a government revenue perspective, the confluence of high gold prices and substantial production volumes creates extraordinary fiscal opportunities. With Ghana producing approximately 130,000 kilograms annually and gold trading above $4,600 per ounce, the country’s annual gold production represents approximately $19 billion in gross value. Even modest increases in the government’s revenue share translate to hundreds of millions of dollars in additional fiscal resources.

The proposed sliding royalty scale that reaches 12% at gold prices above $4,500 per ounce effectively allows Ghana to capture windfall profits during periods of exceptional price performance while maintaining more moderate rates during weaker markets. This structure attempts to balance revenue maximization with investment attraction by linking government take to mining companies’ ability to pay.

Historical Context and Policy Evolution

Ghana’s embrace of mining stability agreements beginning in the early 2000s represented a conscious policy choice to prioritize investment attraction and rapid sector growth over maximum government revenue capture. The approach proved successful in generating substantial foreign direct investment, with companies including Newmont, AngloGold Ashanti, Gold Fields, and numerous junior miners developing major operations that transformed Ghana into Africa’s premier gold producer.

The stability agreement model provided mining companies with fiscal certainty by freezing tax and royalty rates for extended periods, typically 15 years, protecting them from adverse policy changes during their projects’ productive lives. This predictability proved especially valuable during commodity price downturns when governments facing fiscal pressures might otherwise raise mining taxes to compensate for reduced revenues.

However, stability agreements also locked in fiscal terms that increasingly appeared disadvantageous to Ghana as gold prices appreciated dramatically over the past decade. Agreements negotiated when gold traded at $1,200-1,500 per ounce meant companies paying 3-5% royalties continued under those terms even as gold approached $5,000 per ounce—a situation that generated growing political pressure for reform.

The government’s decision to phase out rather than immediately terminate existing stability agreements suggests some concern about legal exposure and contractual sanctity. By allowing AngloGold Ashanti and Gold Fields’ agreements to expire naturally in 2027 rather than revoking them immediately, Ghana reduces the risk of arbitration claims while signaling that no extensions will be granted.

Ghana’s approach contrasts with more aggressive resource nationalism seen in some African countries, where governments have unilaterally canceled mining licenses, seized operations, or made immediate retroactive changes to fiscal terms. The phased transition suggests Ghana aims to rebalance terms in its favor while maintaining some degree of policy predictability and respect for contractual arrangements.

Opposition and Industry Concerns

While the Minerals Commission has articulated the government’s position, industry stakeholders have expressed significant concerns about the proposed changes. The Ghana Chamber of Mines, representing mining companies operating in the country, did not immediately respond to requests for comment but has historically advocated for fiscal stability and predictable regulatory environments as essential for maintaining investment flows.

Mining executives privately express concern that eliminating stability agreements will increase perceived political risk, potentially raising companies’ required returns on Ghanaian projects and making some marginal deposits uneconomic to develop. The uncertainty about future fiscal policy creates challenges for long-term planning and may cause companies to defer investment decisions until the new framework stabilizes.

Smaller and junior mining companies face particular challenges under the proposed royalty structure, as their typically higher costs and less efficient operations leave narrower margins to absorb increased government take. Several exploration and development-stage companies have privately indicated the reforms could jeopardize project economics for deposits that appeared viable under the previous fiscal regime.

International mining industry associations have noted that Ghana’s reforms follow a troubling pattern across Africa where governments change fiscal terms after companies have made irreversible investments based on prior commitments. This behavior, they argue, undermines the sanctity of contracts and increases Africa’s investment risk premium, potentially reducing long-term capital flows to the continent’s mining sector.

However, some industry analysts acknowledge that mining companies operating in Ghana have indeed enjoyed exceptional profitability during recent years of surging gold prices, and that government demands for larger revenue shares have legitimate grounding in principles of fair resource distribution. The challenge involves finding sustainable fiscal frameworks that provide adequate returns to both investors and host governments.

Broader Geopolitical Context

Ghana’s mining reforms unfold against a backdrop of intensifying global competition for critical minerals and strategic resources that some analysts characterize as a new era of resource nationalism. As major powers including the United States and China seek to secure supply chains for materials essential to clean energy transitions, defense applications, and advanced manufacturing, resource-rich countries possess increasing leverage to demand better terms.

Africa holds approximately 30% of global mineral reserves, including 40% of gold, 60% of cobalt, and 90% of platinum group metals. This geological endowment positions African nations as critical suppliers for industries ranging from electronics to renewable energy, creating strategic importance beyond purely commercial considerations.

The clean energy transition dramatically increases demand for minerals including copper, lithium, cobalt, and rare earths, with projections suggesting production must increase more than 450% by 2050 to meet climate goals. Electric vehicles require six times more minerals than conventional cars, while wind power demands nine times more than gas-fired generation. These structural demand drivers empower resource-rich countries to extract better terms from mining companies.

China’s dominant position in African mining—controlling 68% of the $6 billion Sicomines copper-cobalt project in the DRC among other major investments—creates additional complexity. Beijing has demonstrated willingness to adjust to resource nationalism measures through creative structuring, joint ventures, and quiet negotiations rather than confrontational legal battles, sometimes even financing states’ free-carried equity stakes.

Implementation Challenges and Uncertainties

Multiple practical challenges will emerge as Ghana implements its sweeping mining reforms. The selection of an appropriate regulatory framework to replace stability agreements requires careful design to provide sufficient predictability for investment decisions while maintaining government flexibility to adjust terms as circumstances change.

Parliament must approve the draft legislation, creating opportunity for debate, amendments, and potential modifications to proposed royalty rates or implementation timelines. Mining companies and industry associations will likely lobby intensively to moderate some provisions, while civil society organizations and opposition politicians may push for even more aggressive terms favoring national interests.

Determining how the new framework applies to existing operations presents complex transition challenges. While new projects will clearly operate under revised terms, questions arise about how to treat ongoing operations, expansion projects at existing mines, and companies that made investment decisions based on reasonable expectations of stability agreement renewals.

The government must also develop capacity to administer more complex royalty calculations tied to gold price movements, monitor compliance, and enforce collection. Weak institutional capacity has historically enabled revenue leakage through transfer pricing, under-declaration of production, and other tax avoidance strategies that reduce government take below statutory rates.

Ghana’s broader macroeconomic context adds urgency to mining revenue optimization. The country faces significant fiscal pressures including elevated debt levels, IMF program commitments, and development spending needs across infrastructure, education, and healthcare. Mining revenues represent a critical fiscal resource that can help address these challenges, creating strong political incentives to maximize government take from the sector.

Regional Implications and Competitive Dynamics

Ghana’s policy shift may influence mining jurisdictions across West Africa and beyond, as governments observe how investors respond and whether Ghana successfully increases revenues without triggering capital flight. If the reforms prove successful in boosting fiscal receipts while maintaining production levels and attracting development capital for new projects, other countries may adopt similar approaches.

Conversely, if the reforms trigger significant investment slowdowns, project cancellations, or capital reallocation to more stable jurisdictions, Ghana’s experience may serve as a cautionary example. Mining investment is fungible, and companies can choose to deploy capital in Canada, Australia, Latin America, or other African countries depending on risk-adjusted return expectations.

Neighboring countries including Burkina Faso, Côte d’Ivoire, and Mali also host significant gold resources and compete with Ghana for mining investment. Ghana’s decision to eliminate stability agreements and raise royalties may create relative competitive advantages for jurisdictions that maintain more investor-friendly frameworks, potentially redirecting exploration and development activity.

However, Ghana’s status as Africa’s top gold producer, established infrastructure, skilled workforce, and political stability relative to Sahel countries affected by coups and insurgencies may insulate it from competitive pressures. Companies may accept less favorable fiscal terms in Ghana compared to more challenging operating environments elsewhere in the region.

The broader trend toward resource nationalism across Africa suggests Ghana is not acting in isolation but rather participating in a continental movement toward asserting greater control over natural resources. This coordination—whether explicit or resulting from parallel political dynamics—reduces companies’ ability to play jurisdictions against each other by threatening to redirect investment.

Looking Ahead

As Ghana moves forward with its mining reforms, multiple scenarios remain possible depending on implementation details, commodity price trajectories, and stakeholder responses. The government’s stated commitment to “listening” to smaller miners’ concerns and developing formulas that preserve investment while increasing revenues suggests some flexibility remains in final policy design.

The March parliamentary timeline for the draft bill provides several months for consultation, lobbying, and potential modifications before legislation passes. This period will prove critical for industry stakeholders seeking to influence final provisions and for the government to build political consensus around its approach.

Long-term success will depend on whether Ghana can achieve its twin objectives of significantly increasing mining revenues while maintaining the investment flows necessary to sustain and expand production. The elimination of stability agreements represents a calculated gamble that Ghana’s geological prospectivity, established operations, and infrastructure will continue attracting capital despite less generous fiscal terms.

For multinational mining companies, Ghana’s reforms exemplify broader challenges they face across Africa and other emerging markets, where governments increasingly demand larger revenue shares from extractive industries. Companies must adapt strategies to navigate resource nationalism while maintaining acceptable returns on capital, potentially through operational improvements, cost reductions, and more selective deployment of investment capital.

The reforms’ ultimate impact will become clear over coming years as new projects proceed or stall, existing operations adjust to changed circumstances, and Ghana’s mining revenues either surge with increased government take or stagnate if production growth slows. The country’s experience will provide important lessons for resource-rich developing nations seeking to balance maximizing benefits from natural wealth against maintaining climates that attract necessary investment capital.

What seems certain is that the era of preferential stability agreements that helped transform Ghana into Africa’s gold leader has definitively ended, replaced by a new paradigm where governments expect substantially larger shares of mining profits—especially when commodity prices reach historic highs. Whether this transition proves sustainable or triggers unintended consequences remains Ghana’s most consequential mining policy question as the country enters a new chapter in its evolution as a major gold producer.

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By: Montel Kamau

Serrari Financial Analyst

16th January, 2026