The press release containing the government of Ghana’s decision not to renew Gold Fields’ license for the Damang mine had a revolutionary tinge to it.
Gold Fields’ is Ghana’s third and the world’s seventh largest gold producer, a big player by all standards.
Five of the world’s top ten gold producers are active in Ghana.
Source: Kitco (2024)
The government described as “colonial” the current culture of treating such license renewals as routine. Then it started to wax lyrical about a new age of resource nationalism in which Ghana’s natural resources shall be be leveraged solely for national interest.
In these days of large countries beating their chests loudly about putting national interests first, and Ghana’s neighbours to the north asserting their control over their mines against multinationals, the government’s rhetoric shall no doubt find many receptive ears.
It is one thing, though, to nationalise gold mines, assert resource sovereignty, and show multinational companies like Gold Fields who is boss, and another thing entirely to actually do any of these things well.
Regardless how different citizen groups might view the decision not to renew the license and instead to nationalise the mine and send soldiers to assume control, what every Ghanaian can hopefully agree with is the need for the government to show coherence of strategy and competence in execution.
Countries like Malaysia, the UAE, China, Singapore, and others that have shown tremendous ability to assume control of their national resources and develop autonomous capabilities, often in the face of competition with western multinationals, all have one thing in common: they think through their policies, try to apply robust data and market intelligence, and execute their plans with considerable diligence.
It is also perhaps worth reminding the public of Ghana’s checkered history of nationalisation. Throughout the 1960s, mine nationalisations proceeded apace. By 1972, all gold mines in the country were vested in the State Gold Mining Corporation.
Throughout the 1950s and 1960s, the gold price remained stagnant, shifting by barely two dollars over two whole decades. The lack of price growth affected investment. Underinvestment was in turn exacerbated by a healthy dose of mismanagement and by 1973, Ghana’s gold sector was in decline. The country, which had always been in the top 5 global producers of the precious metal since the mid-60s, dropped out of the top 10 in the early 1980s. To underline that trend, production plunged from more than 912,000 ounces in 1964 to just a little over 216,000 by 1983.
The sad thing is that Ghana’s decline coincided with the first price-spurt in decades during which the price of gold moved from an annual average of ~$40 in 1971 to ~$615 in 1980. Ghana thus completely missed out on that boom. From 1986 onwards, the country, its gold mining industry already in tatters, reversed the nationalisation trend and embarked on a furious spate of liberalisation.
Barely a decade later, ~70% of equity in the large-scale gold mining sector was now in foreign hands. It was as if the country had lost the nerve for careful, balanced, reforms and simply wanted to unshackle itself from the nationalisation legacy as rapidly as possibly. In addition to liberalising the large-scale mining sector, the government also legalised small-scale mining, today the most liberalised segment of the industry. From a production share of 5% in 1991, the small-scale segment today commands nearly 40% of output.
Everyone in Ghana knows how attempts to liberalise and regulate small-scale mining have been just as bad as the previous efforts to nationalise and control large-scale mining. Balanced policy, it would appear so far, seems impossible to sustain.
The rest of this brief essay proceeds against this historical background of botched policies, rushed decisions, and a consistent failure of government strategy. It aims to draw attention to the vital importance of diligent, careful, informed, and strategic decision-making in the mining sector.
We shall evaluate if the government’s decisions and actions before and during the Damang mine takeover meet the minimal standards of sound policy design and execution, especially in light of our history. We will seek to find out whether it is really national interest that is driving the whole process or if the situation is, instead, the doing of a few powerful people manipulating the Minerals Commission to drive a parochial agenda.
Correct data and intelligence
Ghana cannot execute a sound decolonial strategy to take control of its resources if the underlying assumptions about any specific takeover action are based on faulty premises and false data. For the simple reason that a flawed logical and analytical foundation for decision-making will undermine the country’s ability to effectively manage the acquired assets.
Hopefully, no Ghanaian will quarrel with the point that government actions should be driven by the best available information and analysis.
Three main reasons were provided by the government for the takeover.
I. Gold Fields has failed to abide by the promises it made when it acquired the Damang concession through its subsidiary, Abosso Goldfields, to invest massively into exploration.
II. Gold Fields has failed to declare commercial reserves. By way of background, the Minerals Commission (MinComm) has suggested that Gold Fields has ceased active mining for a while now and has merely being processing stockpiles of ore further reinforcing the point that it does not intend to expand the commercial reserves in the concession.
III. Gold Fields failed to present a clear technical program for extending the life of the mine in its application for license renewal. Government affiliates have suggested that Gold Fields has given clear hints about its intent to sell the mine or vacate the lease through some other means and thus the application for renewal in December 2024 when the lease was due to expire a few months away, in April 2025, was an afterthought. There is a suggestion that Gold Fields merely want to hold unto the asset until it can flip it to the right buyer at the right time.
For completeness, the reader may find the verbatim details of the government’s rejection note below.
Obviously, Ghana’s primary interest is for mining rights holders to explore their concessions intensely in order to discover more minerals. Right holders are then expected to mine consistently to generate the revenue to pay taxes and royalties to the government, and keep the local companies that supply them in business.
Should the three accusations listed above be accurate, significant doubts would arise about the compatibility between Ghana’s interests and those of Gold Fields.
So, we went searching for evidence
Having finally managed to secure access to a wide range of documents touching on these issues, I have become wary about the government’s claims.
Worse still, our partners at ACEP found to their shock when they tried to engage the different agencies involved in the matter that the level of awareness of critical information varied greatly across key government actors and that some principal decision-makers were completely lost as to the exact strategy at play.
- Investment pledge lapses and stoppage of active mining
On October 18th 2024, Ghana’s principal mining regulator (for the upstream solid minerals sector), the Minerals Commission (MinComm), wrote to Gold Fields alleging some of the exact same matters raised in the above rejection notice. MinComm asked Gold Fields to respond to two specific issues reproduced below.
Upon receipt of MinComm’s letter, Gold Fields responded to dispute the assertion that it had committed to investing $1.4 billion in Damang. Citing records relating to parliament’s approval of its lease, it showed convincingly that its investment pledge for Damang was $550 million, which it had significantly exceeded by investing more than $1.7 billion to date.
Let us assume that Gold Fields was being selective with evidence. Let us even discard the parliamentary records. But for completeness sake, let me still reproduce the parliamentary report prepared with data from the very same MinComm below to illustrate the latter’s confused state of record-keeping.
Assuming, for the sake of argument, then that all the parliamentary records are fraudulent and all the audited data submitted by Gold Fields more than five months ago to MinComm is fake, why has MinComm not been able to respond? Where is MinComm’s counter-data?
To the extent that despite every effort made by ACEP to get MinComm to respond, the regulator refuses to engage, can we not conclude that the data upon which the government is relying to accuse Gold Fields of underinvestment is flawed?
In the same communication detailing the investment outlays, Gold Fields provided evidence showing that the MinComm was duly apprised of the need to temporarily suspend active mining and process stockpiles since the developed pits had been exhausted and studies were being conducted to develop new mining zones within the concessions that will support a further 8 years of mining. In response, MinComm conducted inspections at Damang on 19th December 2023 and issued a report the next day. It did not raise any objections to the company’s plans then nor for a whole year afterwards.
2. Lack of Commercial Reserves
One of the curious arguments being made by the government to justify its take-over of the Damang mine is the failure of Gold Fields to find commercial reserves of gold. It is curious because the evidence is overwhelming that MinComm has been fully aware of the fact that Gold Fields was undertaking studies to find more gold and had published a preliminary feasibility study showing the existence of 1.5 million ounces of the precious metal. Sufficient to support active mining for 8 more years.
In a letter dated 28th July and in follow up meetings held on 8th and 31st August 2023, Gold Fields outlined the program of work leading to the development of the necessary mining infrastructure to activate proven and prospective resources. We reproduce the projected timeline below.
MinComm did not state any objections. In fact, from the record, MinComm appears to confirm its agreement with the strategy.
The government cites Gold Fields’ 2024 integrated report published on 27th March, 2025, in which it is suggested that gold reserves at Damang have run out. They are most likely referring to the charts on page 10 of the supplemental mineral reserves report.
However, in the same integrated report, on pages 74 and 79, it is clearly explained that the zero reserves categorisation on page 10 of the mineral reserves document is due purely to an internal conservative measure adopted by the company. It is not a measure to be relied upon by external parties, including regulators. In fact, on page 81 of the integrated report, the reserves (measured and indicated) are stated clearly, minus those conservative caveats, at a level exceeding 2.27 million ounces.
The government’s decision to nationalise the mine on the basis that one of the world’s largest and sophisticated gold mining companies is struggling to find gold and so must be relieved of its suffering does not appear well thought through. It is universally known that the Damang mine is geologically complex and requires elaborate contingent planning. Production cost per ounce of gold is now estimated to exceed $2300. A prudent miner would thus be very careful in how they approach investment because should gold prices drop to the recent support level of less than $2000, the mine would quickly become a loss-making venture.
The decision to process stockpiles as studies continued to find an optimal exploitation model was thus borne out of pure commercial considerations. It should seriously worry every Ghanaian that the government is suggesting that somehow Gold Fields should have done otherwise because it hints at a commercially reckless decision-making approach.
Conflicts, tensions, and strategic cramps
The main mining contractor at Damang is E&P, a powerful operator owned by the brother of Ghana’s President, which is reportedly trying to raise billions of dollars to buy “marginal” mines like Damang. Everybody in the industry is fully aware that E&P has been hit very hard by Gold Fields’ decision to temporarily halt active mining since it gets paid only when it delivers fresh ore. In fact, E&P’s own creditors have been up in arms. The concern is that should the President’s brother’s interests rather than commercial considerations start to drive decision-making at Damang, now under government control, the country would need to brace for heavy commercial losses.
Furthermore, one of the deputies to the top boss at MinComm is a former employee of E&P. Another top MinComm official is a former executive of Gold Fields nurturing grudges against the company. It is not clear that MinComm can be trusted to make strategic decisions for the country without very careful scrutiny in light of these tensions and conflicts.
MinComm has recently raised eyebrows in the industry for pushing a policy that will force all large mines to use contractors for the actual mining simply because, it would appear, E&P prefers it that way. It is not clear that national interest would always coincide cleanly with the wishes of powerful local business bosses just because they have influence across the political spectrum and can sustain their lobbying from one administration to another. We have seen that in the sanitation industry and the jury is still out on how well Ghana has been served.
A short-term commodity boom shouldn’t dictate long-term national strategy
A lot of decisions about gold are being made by the Ghanaian government in the midst of a frothy price surge. It started with the monopolisation of value chain development, aka GoldBod, and now this nationalisation.
Yet, everyone who has followed the gold market knows that it is prone to strong volatility. Within just three years, from 2012 to 2015, gold prices plunged by 30%, sparking off a crisis in the industry and contributing to a national economic crisis. It always helps to take a strategic view of the industry and to be guided by sober analysis.
Would it really hurt to talk to Gold Fields and come to an accommodation?
Gold Fields itself recognises that, unlike its flagship Tarkwa mine, the lifespan of Damang is likely to be less than a decade and has been working on various scenarios for its social transition. If the government has some joint venture intentions or other commercial plans, it makes sense for it to keep the lines of dialogue open.
Yet, in a letter to Gold Fields’ CEO, Mike Fraser, on 8th April 2025, the sector minister categorically refused to engage in any discussions about the situation.
The Minister’s action breaches section 27 of the main mining law which explicitly provides for a period of discussions following a decision to reject an application, as well as the development and stability agreements, which still subsist until 2027.
Sophistication is not optional in an industry as global as mining
As I started by saying, there is no doubt that the popular sentiment is strongly on the side of greater assertiveness of Ghana’s sovereign interests in mining and minerals matters. In fact, the uproar following the shambolic approval of the lithium concession by the previous administration shows clearly that Ghanaians want to see national interests placed above parochial considerations.
But asserting national interests has to be done on the basis of sound strategy backed by clear data and correct assumptions. And compliance with law is vital to avoid costly legal liabilities. There is absolutely no sense in throwing sophistication out of the window in the name of national assertiveness. Especially not when the likes of E&P are combing the globe for more investment into Ghana’s mining sector. It doesn’t matter whether one is courting the Chinese or the Europeans, it helps to be able to show that Ghana is serious about the mining industry.
True national interest must trump parochial objectives
Above all, there are important tests that must be met to determine whether certain actions are done for the benefit of the Ghanaian people or for a few people close to power. The most critical of these tests is to establish public benefit.
There are more than 1400 workers dependent on the Damang mine’s viability. The current supplier contracts are with Gold Fields. All the stockpiles and infrastructure as well as complex geological models are still proprietary to the company. Investment to the tune of hundreds of millions of dollars need to be made to execute the mine life extension process. Exhausted pits must be carefully decommissioned. And so on and so forth.
An abrupt takeover using soldiers is a crude approach to handle such a complex transition in an effective manner to ensure commercially and socially sustainable mining.
It is hard to see how the people of Damang, and the wider Ghanaian population, benefits from such a disorganised, impetuous, and precipitate process.
We hope that the government shall take its time to examine all the facts carefully and come up with a strategy for this Damang situation that can sustain jobs, protect national income, and avoid damage to the country’s reputation as a serious mining jurisdiction
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