Minerals in their natural state are the property of the Republic of Ghana and rights to them are vested in the President (held on trust and on behalf of the people of Ghana). Any person who wishes to conduct reconnaissance, prospect for, or mine any minerals in Ghana, requires a permit from the Minister of Mines.
Ghana’s mining sector is regulated by the Minerals and Mining Act 703, 2006 (the Act) and the Mining Regulations 1970. The Act revised the old mining law to conform to the recent trends and developments in the industry.
Mining activities are conducted in stages. A reconnaissance licence may be granted for an initial period of not more than 12 months. The initial grant of a prospecting licence is limited to three years and a maximum area of 750 contiguous blocks or 157.5 km². A mining lease is granted for an initial term of thirty years for a maximum area of 150 km². The reconnaissance licence and mining lease are renewable in limited circumstances, and the prospecting licence can be renewed, but only for a maximum of half of the initial area.
The Act aims to increase foreign investment by mining companies in Ghana. As such, mining legislation is applied equally to Ghanaians and foreign investors, except for provisions relating to small-scale mining of minerals – such activity is reserved exclusively for Ghanaians. Almost all the major mining companies in Ghana are owned by private international entities with the Ghanaian Government having a mandatory ten per cent free carry interest.
Exercise of mining rights must be in a manner consistent with reasonable and proper conduct of operations so as to limit the effect on the interests of a lawful occupier of land. An occupier of any licensed area can graze livestock upon or cultivate the surface as long as the grazing or cultivation does not interfere with the mineral operations in the area. Other than the above, there are no specific laws in respect of the rights of aboriginal, indigenous, or disadvantaged people.
There are stability, development and investment agreements available to mining companies which protect the companies against adverse effects from changes in law, including in respect of the fiscal regime.
A mineral right holder shall pay annual ground rent and may have to pay an annual mineral right fee. The holder of a mining lease must pay a royalty fixed at 5 per cent in respect of minerals obtained from its mining operations to the state. The corporate income and branch tax rate is 35 per cent, and capital gains are subject to a 5 per cent tax. In addition, mining enterprises are taxed at an additional 25 per cent on their carry-forward balance. Recently an additional 10 per cent tax on windfall profits has been announced (but has yet to be implemented).
In the case of joint venture with a Ghanaian entity, the non-Ghanaian entity must invest foreign capital of at least US$10,000 (or its equivalent in capital goods) by way of equity participation. Where the enterprise is to be wholly owned by a foreigner, there must be an investment of foreign capital of at least US$50,000 (or its equivalent in capital goods) by way of equity.
The principal environmental laws applicable to the mining industry are the Environmental Protection Agency Act 1994 and the Environmental Assessment Regulations 1999. Mining companies are required to be registered with the Environmental Protection Agency and obtain an environmental permit prior to commencing their operations or project.
Ghana is a signatory to the New York Convention. This establishes a framework for enforcement of foreign arbitral awards. Ghana has also entered into numerous Bilateral Investment Treaties and Double Taxation Treaties with countries such as the United Kingdom, the Netherlands, Canada, Botswana and Iran.