The Institute of Economic Affairs (IEA) has voiced strong objections regarding the $1 billion sale of Newmont’s Akyem Gold Mine Project in Ghana to China’s Zijin Mining Group, labeling the deal as flawed and detrimental to the country’s interests.
The IEA argues that Ghana needs to fundamentally rethink its mineral contracts to prioritize local ownership of resources, thereby creating jobs, wealth, and opportunities for technical skill development among Ghanaians.
In a statement, the institute highlighted that the lease for the Akyem project was signed between the Ghanaian government and Newmont on January 19, 2010, with a 15-year validity period set to expire on January 19, 2025. The terms allow for transferability of the lease with mutual consent from both parties. The IEA asserts that since the lease has not yet expired, any sale must be conducted on a transfer basis and require government agreement.
“Upon the lease’s expiration, Newmont is obliged to return the mine to the government, the rightful owner of the gold beneath the assigned land. Any subsequent operator would need to sign a new agreement with the government,” the IEA stated.
Furthermore, the institute noted that no agreement has been made between Newmont and the government regarding the mine’s transfer to Zijin for the remaining lease term. It also emphasized that there has been no invocation of the extension clause by Newmont, nor has the government approved any such extension.
The IEA highlighted that some Ghanaian companies had expressed interest in acquiring the mine but were reportedly outbid by Zijin. This move, it claims, contradicts President Akufo-Addo’s earlier pledge during his State of the Nation Address (SONA) in February, where he emphasized prioritizing Ghanaian investors for the acquisition of the mine to ensure that the nation’s mineral resources benefit its people.
The IEA questioned what had changed since the President’s statement, asking why Ghanaian investors were being overlooked in favor of a foreign company. It also drew parallels to Canada, which has limited Zijin’s stake in local critical minerals projects to protect national interests.
According to the IEA, Ghana’s natural resources are crucial for the country’s development and poverty alleviation. The institute insists that to fully capitalize on these resources, Ghana must move away from colonial-era contracts that disproportionately favor foreign entities.
“The longstanding justification that Ghana lacks the necessary capital and expertise to exploit its natural resources, thus relying on foreign investment, is no longer acceptable. Other nations in similar situations have successfully negotiated far better terms for resource exploitation,” the IEA stated.
To improve governance of Ghana’s natural resources and combat corruption, the IEA has proposed two key recommendations:
- Amend Article 257(6) of the Constitution, which currently vests natural resources in the President on behalf of the people, thereby allowing excessive discretion in resource allocation.
- Introduce provisions in the Constitution or the Minerals and Mining Act of 2006 that would prevent the government from signing contracts above a certain monetary threshold within six months of their four-year term’s end. This measure aims to curtail last-minute contracts that favor political allies or personal gain.
Through these recommendations, the IEA seeks to ensure that Ghana maximizes the benefits from its natural resources and better serves its citizens.
