Wednesday, 25 August 2010
Ghana's government revives move to revise mining agreements
AngloGold Ashanti says that Ghana’s plan to renegotiate a 2004 agreement capping mining royalties is inappropriate. AngloGold spokesperson Alan Fine told Reuters that the agreement was “pretty much cast in concrete” and that the company did not wish to renegotiate.
The Ghana government has formed a committee to study the possibility of reviewing sections of the stability agreement. Paul Atiglah, Director of Mines at the Ministry of Lands, Forestry and Mines has said that Ghana is “taking advantage of the provision in the law which allows for possible review of the stability agreement where deemed necessary”.
The 2004 agreement stipulates that royalties due to government will not exceed three per cent of mining revenue. Further, the company’s corporate income tax rate is limited to 30 per cent for 15 years. The agreement also extends the lease on AngloGold’s Obuasi mine until 2054.
In return for the agreement, Fine said, AngloGold gave the government some US$120 million (GH¢169.51 million) worth of shares and a cash payment of US$10 million (GH¢14.126 million).
The government introduced a new five per cent royalty rate on mining revenue last year, but AngloGold was exempt from the increase because it already had a stability agreement in place.
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