• Ghana considers raising gold royalties up to 12% amid price surge
• Mining firms and US, China, UK diplomats warn reform could hurt investment
• Government seeks higher mining revenues while negotiating with industry

Ghana plans to introduce a new royalty scale this year that could raise rates to as much as 12% in response to a prolonged surge in gold prices. The measure would more than double the current rate and has already raised concerns among mining companies and several foreign governments, including the United States and China.

Beijing, Washington and London raise concerns

The proposed reform was announced in mid-January and is still under consideration. At the current gold price of nearly $5,100 per ounce, the new scale would require mining companies to pay up to 12% of their gold mining revenues to the Ghanaian state, compared with the current 5%.

Diplomatic missions from China, the United States, the United Kingdom and Canada have recently expressed concern about the potential impact of the reform.

Reuters reported late last week that the diplomatic initiative aimed to encourage Ghanaian authorities to suspend the planned increase. Diplomats believe the reform could reduce the profitability of mining companies operating in the country.

According to the report, diplomats from these countries, joined by representatives from Australia and South Africa, submitted a joint letter to authorities in Accra outlining their reservations and calling for continued discussions with the government.

"This is the first time I have seen the diplomatic community get involved on this scale," a source close to the matter told Reuters. "The ambassadors expressed concern about the operating conditions miners could face."

Such collective diplomatic pressure is unusual but not entirely surprising. Most of the major gold companies operating in Ghana originate from these countries. They include the U.S. firm Newmont, China's Zijin Gold and South Africa's Gold Fields.

These companies had already raised concerns several weeks earlier through the Ghana Chamber of Mines, which represents the country's gold industry.

Concessions, but still not enough

The Ghanaian government has taken note of the industry's concerns. Reuters reported in early February that authorities proposed adjusting an additional tax known as the “Growth and Sustainability Levy” to facilitate the adoption of the new royalty system. The levy is currently set at 3%. Under the proposal, the rate would be reduced to 1%.

The concession, however, did not convince the Chamber of Mines. The organization is calling for the levy to be scrapped entirely and instead advocates a new royalty scale ranging from 4% to 8%.

It remains unclear how discussions between the government and industry will evolve. The growing involvement of foreign governments could also influence the debate. For Ghana, the stakes are significant. The reform aims to increase government revenues from gold, the country's main export, at a time of sustained high prices for the metal.

The move reflects a broader trend among African producers seeking a larger share of mining revenues. Mali and Burkina Faso have recently revised their fiscal frameworks to capture more value from their mining sectors. For now, no timeline has been announced for the adoption and implementation of the new royalty scale.

Aurel Sèdjro Houenou