GHEITI Calls for Dialogue on Ghana’s new Mineral Royalty Regime, Warns of Rising Fiscal Burden
The Ghana Extractive Industries Transparency Initiative (GHEITI) has urged government and mining industry players to continue engaging on the design of Ghana’s newly introduced mineral royalty regime, cautioning that the combined fiscal burden on mining companies could undermine the sector’s competitiveness.
In a press statement issued on March 13, 2026, GHEITI sought to place the ongoing public debate about the new royalty framework in context, noting that a sliding-scale royalty system is not new to Ghana’s mining sector.
According to the initiative, Ghana, as far back as 1986, introduced a royalty sliding scale of between 3% and 12% under the Minerals and Mining Act, with the applicable rate determined by a mine’s profitability using an operating ratio benchmark.
However, the regime was later revised in 2006 to a narrower range of 3% to 6% before being replaced with a flat royalty rate of 5% under an amendment in 2010.
GHEITI noted that earlier sliding-scale regimes faced implementation challenges, as mining companies frequently paid the lowest band of the royalty scale regardless of prevailing market conditions.
“The difficulty in enforcing full compliance with the previous sliding scale regimes arose from the complexity in calculating the operating ratio, compounded by the generous capital allowances allowed as part of the computation,” the statement said.
New price-linked royalty framework
Under the new system introduced by government, mineral royalty rates are now pegged to international gold price movements, with the applicable rate ranging between 5% and 12%.
The highest rate of 12% will apply when gold prices reach US$4,500 per ounce, while the minimum rate of 5% will apply when prices fall to around US$1,900 per ounce.
GHEITI indicated that all mining companies, except those operating under existing development agreements including AngloGold Ashanti, Gold Fields and Zijin Mining Group, will transition to the new royalty framework.
While describing the regime as fair in principle because it shares risks and rewards between the state and investors, the initiative raised concerns about the calibration of the royalty bands.
Industry concerns over design
The initiative noted that industry stakeholders, including the Ghana Chamber of Mines, are not opposed to the concept of a sliding-scale royalty system but have expressed concerns about the design of the current model.
Specifically, the Chamber has argued that the bands appear overly aggressive and do not adjust downward sufficiently when gold prices decline, particularly because the minimum rate of the new regime remains the same as the previous flat rate of 5%.
Another major concern relates to the transition thresholds between royalty bands, where roughly every US$500 increase in the gold price results in a one percentage point rise in the royalty rate.
GHEITI further dismissed suggestions that foreign governments were threatening Ghana over the policy shift, describing such claims as inaccurate, though it acknowledged that some diplomatic and industry representations had been made to government requesting reconsideration.
Fiscal pressure from additional levies
Beyond the royalty regime itself, GHEITI warned that the continued application of the Growth and Sustainability Levy (GSL) alongside the new royalty structure could significantly raise the fiscal burden on mining companies.
The levy, which is charged at 3% of gross production, translates to roughly 4.6% in royalty-equivalent terms due to its non-deductibility, potentially pushing the overall fiscal burden on gross production to more than 16%.
According to GHEITI, such a level would be “unprecedented in global mining fiscal regimes” and could weaken Ghana’s attractiveness as a mining investment destination.
Call for policy adjustments
To address these concerns, GHEITI recommended sustained dialogue between government and industry to find a mutually acceptable framework that balances revenue mobilisation with sector competitiveness.
The initiative also urged government to consider withdrawing the Growth and Sustainability Levy to ease the fiscal pressure created by the new royalty regime.
Additionally, GHEITI called for the introduction of a reduced royalty structure for small-scale miners as a means of encouraging compliance and bringing more operators into the formal tax and royalty system.
GHEITI stressed that beyond the royalty debate, the most critical issue affecting Ghana’s investment climate remains fiscal predictability and certainty, which are essential for long-term planning in the mining sector.
