The Ghana Chamber of Mines has mounted a detailed challenge against the government’s proposed sliding scale mineral royalty regime that could reach 12 percent, arguing the upper limit risks harming mine sustainability and investment while potentially threatening Ghanaian-owned mining operations.
Chamber President Michael Edem Akafia presented the industry’s position to fellows of the Africa Extractive Media Fellowship (AEMF), clarifying that the industry supports the principle of a sliding scale tied to gold prices but rejects the proposed rate structure.
“We are not against the idea of proposed, that sliding scale tied to gold price. In fact, it’s something that is not new, even in Ghana,” Akafia said. “Historically, we had a sliding scale, but that was not tied to the gold price, that was tied to some profit measure.”
The Chamber’s opposition comes as Finance Minister Cassiel Ato Forson offered to cut the Growth and Sustainability Levy (GSL) by two percentage points to ease industry concerns about the new royalty regime, which takes effect 21 days from Tuesday, February 3, 2026, unless Parliament amends it.
Why Sliding Scale, But Not 12 Percent
Akafia, who also serves as Vice President and Head of Legal at Gold Fields West Africa Region, explained that the Chamber prefers a gold price-linked sliding scale over alternatives such as windfall taxes, which mature mining jurisdictions have abandoned.
He cited Australia and Zambia, which both experimented with windfall taxes during past commodity booms, only to see investment retreat and prices eventually collapse.
Ghana previously operated a sliding royalty scale ranging between three and six percent tied to profit measures rather than gold prices. That system failed because profit-based formulas could be legally optimized through accounting structures, reducing expected revenues for the state.
However, the Chamber argues that the assumption driving the proposed scale, that rising gold prices automatically translate into excess profits, is fundamentally flawed.
“Mining companies are price takers, not price setters,” Akafia explained. “Gold prices are volatile and cyclical, sometimes collapsing dramatically, as seen in 2012 when prices fell by 26 percent in a single day.”
Cost Reality of Mining Operations
A major pillar of the Chamber’s argument centers on the highly cost-intensive nature of mining operations. Gold mining involves a long development cycle, often stretching 10 to 13 years from exploration to production.
Costs incurred during drilling, feasibility studies, infrastructure development, and reserve conversion must all be recovered over time, which is why the global industry uses the All-In Sustaining Cost (AISC) metric developed by the World Gold Council.
“You can’t be looking at the gold price and saying that, at this current gold price, if the gold price is at 2,000 or 5,000 and your operational cost is, say, 1,000, then it’s all margin now,” Akafia said. “Because you would have incurred, in terms of those 13 years that I talked about, that you’d have been drilling, you would have to factor that in.”
The Chamber further noted that when gold prices rise, input costs rise alongside them as labour unions, contractors, equipment suppliers, and service providers all factor gold prices into negotiations and pricing.
Threat to Ghanaian Mining Projects
One of the most serious concerns raised is the impact of the high royalty scale on life-of-mine calculations. Any increase in costs, including royalties, shortens the economic life of a mine by making certain reserves unviable.
The Chamber disclosed that some projects are already at risk of being suspended due to the proposed royalty scale, including at least one wholly Ghanaian-owned large-scale mining operation.
“One of our members talked about the fact that this will kill a project they’re trying to do, which is a Ghanaian wholly owned, large-scale mining operator,” Akafia stressed. “So here’s where you are killing even that whole thing that we’ve all been pushing for, where we want more Ghanaians to participate in the industry.”
Chamber’s Counterproposal
Rather than rejecting reform, the Chamber has put forward a balanced alternative. The industry is proposing a sliding royalty scale ranging from four to eight percent, benchmarked against comparable mining jurisdictions.
This proposal avoids extreme outliers such as Mali’s recent 10.5 percent upper rate, which the Chamber described as an exception shaped by non-market factors.
In addition, the Chamber has proposed dedicating one percent of mining profits, not revenues, towards community development projects during periods of high gold prices, ensuring communities benefit without pushing loss-making operations into distress.
“We believe that the four to eight percent is what is reasonable, and then one of the things we’ve proposed in doing this gold price run is to dedicate one percent of profit for community projects at this time that we’re having this price,” Akafia said.
Government Position
The new gold royalty regime, which adds approximately one percentage point for every 500-dollar rise in the gold price, mirrors systems in Burkina Faso.
According to recent media reports, Minister Forson proposed cutting the GSL from three to one percent while maintaining the five to 12 percent sliding royalty scale. The government source familiar with the talks confirmed that the minister told companies he was open to dialogue, though Parliament could still pass the royalty amendment as drafted unless the ministry submits an alternative.
Chamber Chief Executive Officer Kenneth Ashigbey previously told media that miners wanted a range of four to eight percent, with one percentage point earmarked for a development fund for host communities.
Gold prices have surged approximately 72 percent over the past year, with spot gold trading around 4,590 dollars per ounce as of mid-January 2026, well above the 4,500-dollar threshold that would trigger the maximum 12 percent royalty rate under the proposed legislation.
The Chamber argues that Ghana must strike an optimal balance that secures fair state revenues while preserving mine viability, protecting jobs, and sustaining long-term investment.
