• UBS Sees Gold At $4,200/oz By Mid-2026
• Mali, Burkina Faso Already Adopt Progressive Royalty Systems
• Rising taxes may boost revenues but risk deterring investment

Swiss bank UBS projected in a note published Tuesday, September 30, that the gold rally could drive prices to $4,200 per ounce by mid-2026. Such a scenario would see the price of the metal more than double from its early 2024 price of around $2,000 per ounce. These record highs are expected to trigger new adjustments to the royalties charged to mining companies by gold-producing countries, especially in West Africa.

Shift from Fixed to Variable Royalties

Mining royalties (or ad valorem taxes) represent direct state revenue based on the commercial value of raw materials. For many years, African gold producers applied fixed rates, often below 5%, which limited their gains when prices rose. This trend shifted starting in the 2010s with the introduction of variable royalties in Burkina Faso (2011), Mauritania (2012), Ivory Coast (2014), and Zimbabwe (2019). These countries adopted progressive mechanisms that increased tax rates in tandem with the rising price of gold.

The policy shift accelerated with the price surge of recent years. In Mali, for instance, the fixed rate of 3% applied since 1991 was replaced in 2024 by a progressive scale. According to an implementation decree of the 2023 mining code, a royalty of 3% applies when gold trades below $1,000 per ounce. This rate climbs to 6% between $1,600 and $2,000 per ounce, then to 7% up to $2,500. Beyond that, authorities add an additional 0.5% for every $400 price increase.

Burkina Faso followed a similar path. After the maximum rate was set at 5%, an October 2023 decree raised it to 7% for prices exceeding $2,000. With new record prices reached in 2024 and 2025, the government decided in March 2025 to add 1% for every $500 increase in the gold price.

In Côte d’Ivoire, which already had a variable system, the 2025 Finance Law raised the various ad valorem tax scales by two percentage points. The rate is now 5% for a price at or below $1,000 per ounce (up from 3% previously). It rises to 5.5% between $1,000 and $1,300, 6% between $1,300 and $1,600, 7% between $1,600 and $2,000, and 8% for prices above $2,000.

Ghana has maintained a fixed ad valorem gold tax of 5% for several years, which has not changed with the price increase. However, in March 2025, the government, while restructuring its public debt, tripled a separate tax on the mining companies' annual gross production, raising it from 1% to 3%.

A Double-Edged Sword

According to the World Gold Council, gold is currently trading at $3,800 per ounce. Goldman Sachs and JP Morgan have also predicted the metal could climb to $4,000 by mid-2026. If these forecasts materialize, Mali and Burkina Faso appear best positioned in the West African sub-region to benefit, as their royalty mechanisms have already anticipated further price surges.

However, other major West African gold producers may be tempted to revise their mechanisms in the coming months to capture a greater share of the companies' additional revenue. Senegal, which has not yet joined the progressive tax trend, is a country to watch. With three mines in operation, one of which entered production this year, Dakar may view such an adjustment as a welcome injection of funds. Like Ghana, Senegal faces high levels of debt and is actively seeking financing for its economic recovery plan.

Frequent fiscal changes, however, tend to discourage investment, warned Charles Bourgeois, a mining law specialist and lawyer at the Paris Bar, in a 2020 interview with Ecofin Agency. West African gold producers will need to balance increased mining revenue against maintaining an attractive business climate, especially since mining revenue constitutes a significant portion of public income in these nations.

Emiliano Tossou