Emmanuel Armah-Kofi Buah, Minister for Lands and Natural Resources
The Africa Centre for Energy Policy (ACEP) has issued a strong statement cautioning the Government of Ghana against what it describes as a rushed and potentially unlawful decision not to renew the mining lease of Abosso Goldfields Limited (AGL), the operator of the Damang gold mine in the Western Region.
Last week, the government, acting on advice from the Minerals Commission, informed AGL of its intention not to renew the company’s mining lease, set to expire on April 18, 2025.
The decision, which has since attracted national attention, has prompted ACEP to engage both the public and stakeholders, warning of dire consequences if due process is not followed.
Background of the Dispute
Abosso Goldfields Limited, a subsidiary of Gold Fields Ghana, has operated the Damang mine for nearly three decades.
Recently, the company signaled its intentions to continue operations and submitted a lease renewal application, which was declined by the government.
In response, AGL has expressed its disagreement and has notified the government of its intention to seek redress through arbitration—an act backed by law under Section 27(5) of Ghana’s Minerals and Mining Act, 2006 (Act 703).
According to ACEP, this notice legally allows the company to continue operations undisturbed until the dispute is resolved.
The think tank emphasized that this clause exists to prevent hasty takeovers that may end in costly litigation or damage investor confidence.
Concerns About Due Process
ACEP revealed it had engaged informally—but urgently—with government officials and company representatives to gather clarity on the issue.
While acknowledging the openness of public officials during these talks, ACEP expressed disappointment that dialogue between the state and AGL was prematurely halted.
The organization warns that the government’s decision may mirror previous controversial state actions that eventually cost Ghana significantly.
It cited past examples including the Ameri power contract renegotiation, the Agyapa royalties deal, and the GNPC-Aker Energy acquisition attempt—cases where decisions made in haste eventually backfired.
Legal and Regulatory Oversights
One of the central issues ACEP highlights is the apparent neglect of provisions in both the Minerals and Mining Act and the Minerals and Mining (Licensing) Regulations.
The organization argues that the legal grounds used by the government to justify lease termination are flawed and may not stand up to scrutiny.
Specifically, Regulation 22 of L.I. 2173 requires that any suspension of mining operations be documented and approved by the Commission.
AGL claims it communicated its intent to process stockpiles and received approval—stockpiles which produced 135,000 ounces of gold in 2024. If these claims are accurate, ACEP contends, then there is no basis for penalizing the company.
Further, under Section 191(2) of the licensing regulations, if an application is deemed incomplete, the Minerals Commission is required to notify the applicant within five days and allow ten days for corrections.
It remains unclear if this standard protocol was followed.
Scrutiny of Reasons for Lease Rejection
The government reportedly cited three main reasons for rejecting the renewal application: failure to declare mineral reserves, absence of a technical programme, and lack of budgetary allocation for exploration.
However, ACEP challenges each of these points:
1. Mineral Reserves: The company reportedly submitted prefeasibility studies and technical reports showing minable resources with an eight-year production outlook. If the state insists there are no reserves, ACEP questions why it is eager to assume control of the site.
2. Technical Programme: AGL asserts that it submitted a programme consistent with prior renewals. ACEP urges the Ministry to publish this document to provide clarity.
3. Budget for Exploration: The company has documentation to show it continued exploration activities, all reportedly known to the Commission. ACEP insists these must be verified before any conclusion is reached.
ACEP also notes that although the Minerals Commission promised a forensic audit within 14 days of the lease rejection, more than a month has passed without any evidence of the audit being initiated.
This, it says, raises questions about the integrity of the process.
Economic Realities vs Policy Interpretation
The think tank points out that AGL had been exploring the possibility of divesting the Damang mine, based on internal economic criteria known as the Mineral Reserves Economic Criteria (MREC).
The government, it suggests, may have misunderstood or intentionally ignored the flexibility of this decision-making tool, which is standard in the industry and influenced by changing economic conditions.
Call for Restraint and Reopening Dialogue
ACEP concludes that while Ghana must derive maximum value from its natural resources, this objective must be pursued through legal means, transparent communication, and adherence to industry best practices.
The current trajectory, it warns, risks international arbitration, reputational damage, and a chilling effect on foreign investment in the mining sector.
ACEP calls for the government to halt any immediate plans to take over the Damang mine after April 18, and instead return to the negotiation table for a legally grounded, mutually beneficial resolution.
If indeed the policy goal is to return to the nationalization strategies of the 1970s, which once crippled Ghana’s mining sector, ACEP insists that the government must clearly communicate its intentions and demonstrate what will be done differently this time.
“Where remedies are provided in law, the hearts and minds of the implementers cannot be at variance with the prescribed remedies,” the statement said.
The call was signed by Benjamin Boakye, Executive Director of ACEP, as part of an urgent plea for prudence and integrity in resource governance.
By Issah Olegor
