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Chamber opposes mining lease years cut from 30 to 15

Chamber pushes back against proposal to halve mining lease duration

NewsCenta by NewsCenta
September 2, 2025
in Mining
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The Ghana Chamber of Mines has expressed grave concern over proposed amendments to the Minerals and Mining Act, 2006 (Act 703), warning that certain provisions could undermine the attractiveness and long-term viability of Ghana’s mining industry.

At the heart of the controversy is a proposal to slash the tenure of mining leases from the current 30 years to 15 years, with a single renewal option of 10 years.

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At a press briefing in Accra, the Chamber’s Chief Executive Officer, Ing. Dr. Kenneth Ashigbey, presented the industry’s position paper on the proposed amendments, cautioning that the changes, if passed in their current form, would erode investor confidence, shrink capital inflows, and encourage unsustainable mining practices.

Shorter leases could threaten investment

Dr. Ashigbey explained that mining is a capital-intensive sector with long gestation periods, where companies often spend years exploring and developing ore bodies before they can even break even.

A shorter lease period, he said, would discourage both foreign direct investment (FDI) and local direct investment.

“What is going to happen is that if the tenure is short, when you do your net present value (NPV) calculations, you will find out that the project is not feasible. And if it is not feasible, nobody will bring money to invest,” he warned.

The Chamber fears that with only 15 years to operate, investors would be reluctant to commit resources to large-scale or complex mining projects, particularly those involving deep-seated or marginal ore bodies.

Risk of unsustainable practices

One of the more serious concerns raised by the Chamber is the potential for “high grading” — a practice where companies focus on extracting high-value ore within a short timeframe, while abandoning lower-grade deposits.

“If you reduce the tenure, what is going to happen is that you are going to encourage high grading. They will look for the high grade, exploit that because that is the tenure they have, and then leave. This would compromise the economic viability of deep-seated, complex, and marginal ore bodies,” Dr. Ashigbey stressed.

Such practices, he added, would deprive the country of long-term value, reduce employment opportunities, and undermine the sustainability of host communities that depend on mining.

Community development levy sparks concern

Beyond lease tenure, the Chamber also opposed a proposal requiring mining companies to contribute 1% of their gross revenues into Community Development Agreements (CDAs). While the industry acknowledges the importance of community development, Dr. Ashigbey argued that mining firms already invest heavily in social infrastructure, health, education, and livelihood programmes in host communities.

He cautioned that a rigid levy could undermine innovation in corporate social responsibility, reduce flexibility in addressing community needs, and place an additional burden on marginal mines struggling to remain viable.

Stability agreements and development agreements at risk

Another flashpoint in the proposed reforms is the reduction of stability agreements from 15 years to 5 years.

Stability agreements provide fiscal predictability, allowing companies to plan long-term investments with some assurance of tax and regulatory stability.

Dr. Ashigbey described the proposal as “dangerous,” warning that it would significantly heighten investment risks in a sector already characterized by long payback periods and high upfront capital costs.

He recommended a minimum stability period of 10 years.

The Chamber also strongly opposed the proposed abolition of Development Agreements (DAs), which are tailored arrangements between government and companies undertaking projects valued at over $500 million.

Such agreements, the Chamber argued, are vital for attracting large-scale investments that can transform Ghana’s mining sector.

Removing them, it said, would confine Ghana to low-value projects and diminish the country’s competitiveness on the global stage.

Prospecting licences and exploration challenges

The Chamber further criticized the proposal to shorten the duration of prospecting licences to nine years.

It argued that this would reduce Ghana’s ability to fully map its mineral potential and undermine the government’s broader goal of promoting Ghanaian ownership and participation in mining.

Exploration, according to the Chamber, requires time, patience, and significant financial outlay.

A shorter licence period would make it difficult for companies to commit to comprehensive exploration programmes, thereby weakening the foundation for future mining projects.

The case for maintaining Act 703 framework

While commending the Minerals Commission for engaging stakeholders in the review process, the Chamber urged policymakers to adopt reforms that balance the state’s revenue interests with the need for sustainable investment.

It recommended that the tenure of mining leases and their renewal provisions be maintained as currently stipulated under Act 703.

It further argued for the preservation of Development Agreements, longer stability periods, and more flexible frameworks for community development contributions.

“The review must future-proof Ghana’s mining industry, ensuring resilience, sustainability, and competitiveness for generations to come,” Dr. Ashigbey emphasized.

Implications for Ghana’s Economy

The mining sector remains one of Ghana’s most important economic pillars, contributing significantly to export earnings, tax revenues, employment, and community development.

Gold alone accounts for nearly half of the country’s export revenue, while mining companies are among the leading contributors to the Ghana Revenue Authority’s collections.

Industry watchers fear that poorly designed reforms could damage Ghana’s reputation as a mining-friendly jurisdiction, pushing investors toward competing countries such as Côte d’Ivoire, Burkina Faso, and Tanzania, which are aggressively positioning themselves as alternative destinations for mining capital.

The Chamber insists that Ghana has an opportunity to strengthen its global position by refining its legal and regulatory framework in a way that attracts investment while safeguarding national interests.

However, it warned that if the current proposals are passed without amendment, they could have the opposite effect — discouraging investment, reducing exploration, and ultimately depriving the country of long-term benefits from its mineral wealth.

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Tags: Ghana Chamber of MinesIng. Ken Ashigbey
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