The Mining Sector

Mining Activity

For well over a century, Ghana's mining industry has held its own as a giant sector, contributing enormously to the growth of the economy. For years, mining has been second only to cocoa in the quantum of its contribution to the economy.

The formal, large scale sector of the mining industry employs more than 20,000 people; 500,000 more are engaged in small scale mining of gold and diamonds, sand winning and quarrying. Currently, mining contributes about 7% of Ghana's corporate tax earnings, 37% of export earnings, 12% of total government revenue and 5% of GDP. In 2006 export revenues exceeded US$1.2 billion.

As new and attractive opportunities for investment in the mining sector continue to open up, the government has been adopting and implementing specific policies and programmes designed to attract investors of the highest calibre. In 2006 the Minerals and Mining Act 2006 (Act 703), was passed that reflects international best practices and has repositioned Ghana as a major mining investment destination.

Act 703 provides, among others, for improvements in the processing of mineral rights applications and the granting of mineral rights, ensuring greater transparency and enabling prospective investors to make informed decisions. Even more important, the new measures have been designed to ensure that the cost of doing business in Ghana is drastically reduced.

A revegination area at Obuasi overlooking section of Obuasi mines

A major provision of Act 703 is the introduction of the "Stability Agreement" and the "Development Agreement," in place of the administrative "Deeds of Warranty."  These new agreements protect, for a maximum of 15 years, a mineral rights holder from future changes in law that impose retrospective obligations and changes in fiscal or financial matters. Considerable improvements in the tax regime have also been made, with the reduction of corporate tax from 45% to 25% and the narrowing of mineral royalty rates to 3% - 6%, from 3% -12%.

The Ghana Ministry of Mines, Lands and Forestry sees these as important developments that have created an attractive investment climate in the mining sector. Furthermore, a pool of skilled labour suitable to the mining sector, coupled with improved infrastructure and fiscal regime, have  contributed to attracting some leading mining companies, among them the world's largest gold-miner, Newmont Mining Corporation, which opened it first mine in Africa (Newmont Ghana Gold) in 2006.