ACEP Backs Damang Mine Lease Extension But Urges Caution Over Full Government Takeover
The Africa Centre for Energy Policy (ACEP) has welcomed the Government of Ghana’s decision to grant a 12-month lease extension to Abosso Goldfields Limited (AGL) for continued operations at the Damang Mine, describing the move as a step in the right direction towards fostering dialogue and safeguarding investor confidence.
In a statement issued on April 24, ACEP noted that the conditional lease extension — which awaits parliamentary ratification in May 2025 — allows for the continuation of open-pit mining and processing of existing stockpiles under a joint government-company management framework. The arrangement also defers the final transfer of ownership of the mine until after the expiration of the extended lease period.
ACEP commended the government’s adoption of a “phased, consultative approach,” describing it as consistent with the Centre’s earlier calls for transparency, due process and a measured transition strategy.
“This phased, consultative approach aligns with ACEP’s call for dialogue, adherence to due process and caution against sacrificing investor confidence at the altar of expediency,” the statement read, referencing the Centre’s April 17, 2025 press release.
However, ACEP cautioned that while the intention to eventually transition the mine into Ghanaian ownership is commendable, mining remains a capital-intensive and high-risk venture that cannot thrive on patriotic aspirations alone.
“If the government intends to assume direct operational control, as it has communicated, it must be transparent about how it plans to do so sustainably,” ACEP noted, adding that the Minerals Income Investment Fund (MIIF) — widely speculated as the vehicle for the takeover — has yet to demonstrate the capacity to manage a mine of Damang’s scale.
ACEP expressed concern about the financial demands of sustaining operations at Damang, indicating that the project would require an additional $600 million in investment.
“The more prudent option would be for the government to stagger its equity acquisition and strategically share the risk with an experienced investor,” the statement added.
Drawing parallels to Ghana’s resource governance challenges in the 1970s, ACEP warned that a hasty or ill-planned transition could undermine the very benefits the government seeks to achieve through localisation.
ACEP further urged the government to broaden its stakeholder engagements and consider alternative ownership models that guarantee long-term, sustainable value for the Ghanaian people.
