The Ghanaian government has formally clarified its decision to deny Gold Fields’ application to renew the 30-year mining lease for its Damang gold mine, citing critical regulatory and operational deficiencies.
Emmanuel Armah Kofi Buah, Minister of Lands and Natural Resources, emphasized the move aligns with legal frameworks and national interests, marking a policy shift toward stricter oversight of mining activities. Below are the three primary reasons underpinning the rejection:
1. Failure to Declare Verifiable Mineral Reserves
Gold Fields’ renewal application lacked a technical report confirming economically viable mineral reserves, a requirement under Regulation 189 of Ghana’s Minerals and Mining (Licensing) Regulations, 2012 (L.I. 2176). The regulation mandates that lease extensions must justify continued operations with verifiable data on extractable resources. However, Gold Fields’ application omitted this information, a lapse further corroborated by its 2024 Annual Report, which also failed to outline reserves. The Minerals Commission deemed this omission grounds for rejection, as unverified reserves rendered the mine’s long-term viability uncertain.
2. Absence of a Detailed Technical Program
The application did not provide a comprehensive technical program detailing past operational performance or future mining plans. Such documentation is essential under Section 44 of the Minerals and Mining Act, 2006 (Act 703), which requires companies to outline mineral operations for lease renewal. Authorities noted the absence of historical data (e.g., compliance records, production metrics) and forward-looking strategies made it impossible to assess the mine’s alignment with Ghana’s economic goals. A government official stated, “Without this program, we could not gauge the mine’s commitment to compliance or its ability to deliver long-term value”.
3. No Budget for Exploration in the Last Two Years
Gold Fields had allocated no funds for exploration at Damang since 2023, raising concerns about its commitment to sustainable operations. Exploration is critical for identifying new ore bodies and converting resources into reserves, ensuring job security and economic growth for mining-dependent communities. The government highlighted this failure as indicative of a short-term approach, contradicting Ghana’s emphasis on resource longevity. “A mine not investing in its future jeopardizes jobs and national benefits,” the Ministry stated.
Policy Implications and State Takeover
Invoking Article 257(6) of Ghana’s 1992 Constitution, the government assumed operational control of Damang on April 19, 2025, pledging to protect jobs, honor valid contracts, and maximize national benefits. This decision reflects a broader shift away from automatic lease renewals, prioritizing transparency and local value retention.
While industry groups like the Ghana Chamber of Mines warn of potential investor skepticism, the government frames the move as part of an “economic reset” to curb neo-colonial mining practices and ensure resources benefit citizens. Gold Fields, which ceased active mining at Damang in 2023 and focused on processing stockpiles, now faces a phased shutdown, with its global strategy pivoting to larger projects in Chile and Canada.
The Damang case underscores Ghana’s resolve to enforce regulatory rigor, balancing investor interests with national development imperatives in a sector contributing over 50% of export earnings. Analysts stress that future mining agreements will hinge on strict adherence to exploration commitments and technical accountability.
Source: News Ghana / Digpu NewsTex