Ghana considers local ownership of Gold Fields' biggest mine - Report

Ghana is considering transferring control of Gold Fields Ltd’s Tarkwa mine to local firms when its leases expire next April, part of a push to increase control of its gold industry and capture more of the proceeds from high bullion prices. The shares plunged.

The Ghanaian miners will need to submit bids for evaluation if the government goes ahead with the plan, people with knowledge of the matter said, asking not to be identified as the discussions are preliminary.

The authorities are also weighing the option of extending the leases for Gold Fields, they said.

Ghana, Africa’s biggest gold producer, has moved to increase its share of mining revenue, raising royalties on bullion to as much as 12% from 5% and restricting bids for a former Gold Fields mine to local companies.

The loss of its biggest asset will be a blow for the South Africa-based Gold Fields as it accounted for a fifth of the company’s total output last year.

Gold Fields’ shares plunged as much as 8% by 10:44 a.m. in Johannesburg, the biggest intra-day decline in more than three months.

A spokesperson for the Ministry of Lands and Natural Resources declined to comment.

Gold Fields has “submitted an early application for the renewal of the Tarkwa mining leases. These constructive engagements are continuing,” the company said when asked for comment on the government’s proposed move.

President John Dramani Mahama’s administration is facing pressure to act against South African firms following a wave of xenophobic protests in Africa’s biggest economy.

More than 2,700 people from Ghana, Nigeria, Mozambique and Malawi have been assisted to return home from South Africa amid fears that anti-immigrant demonstrations could escalate.

The administration will look for commitments around environmental rehabilitation, local employment and infrastructure development in host communities when analyzing the bids, the people said.

Transferring the ownership of the Tarkwa mine will help create more job opportunities for Ghanaian engineers, suppliers, and entrepreneurs, they said.

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