THE latest twist of the African resource nationalisation screw may be coming from Ghana where the government intends enforcing the purchase of up to 30% of the gold produced in the country directly from the mining companies.
According to a note in the Gold Fields’ interim report for the six months to June, a letter dated July 31 from the Ghanaian government was delivered to the Ghana Chamber of Mines informing it of this action. It requested the Chamber to tell its members to “… be prepared to engage with the Ministry to finalise measures to ensure implementation by November 1, 2018”.
Gold Fields is one of a number of major gold mining groups operating in Ghana alongside Newmont Mining, AngloGold Ashanti and Kinross.
Asked why he thought the Ghanaian government was doing this, at a presentation of Gold Fields interims results in Johannesburg on Thursday, CFO Paul Schmidt replied: “That one page letter is all we have seen.
“We need an explanation because there was no information on how we would be paid; when we would be paid; or what the payment would be based on.
“We don’t understand the implications of it because we have no more information. We thought it was prudent to inform shareholders that we had received this letter as an industry”.
The obvious question is this: “What’s in it for the Ghanaian government?” The danger is it might try to follow the example of Zimbabwe where sales of most minerals produced in the country have to go through government-controlled organisations.
Effectively, that imposes another layer of bureaucracy on the mines and raises their costs because the government charges for the marketing ‘services’ it has imposed but which many companies do not need.
Asked whether he thought the Ghanaian government proposal could be negative for mine revenues Schmidt replied: “It could be, but we really don’t know until we see the terms of what they propose to do”.