'New taxes could collapse mining sector' - Chamber of Mines warns

The mining sector in Ghana is facing serious challenges. The Ghana Chamber of Mines has issued a warning. New tax measures could harm the industry’s competitiveness and growth.

The Chamber is concerned about a 3% levy on gross production. They also criticize the Value Added Tax (VAT) on exploration activities. These changes may drive exploration firms away and hurt investments.

Ahmed Nantogmah, Acting Chief Executive of the Chamber, spoke on PM Express Business Edition. He highlighted how these fiscal moves impact mining negatively. “Exploration is the lifeline of mining,” he said.

Nantogmah pointed out that drilling and assay activities are now taxed. This increases financial burdens for early-stage ventures already struggling.

He explained that spending $10 million on exploration without a discovery still incurs VAT costs. “That VAT will not be refunded,” he added, calling it money wasted.

The Chamber believes this policy shift harms Ghana’s mining potential. Smaller firms, which lead greenfield exploration, cannot absorb these new taxes. Many are relocating to countries like Côte d’Ivoire and Kenya where exploration is encouraged.

“These companies are small,” Nantogmah noted. “They don’t have deep pockets.” As a result, they prefer places without VAT like Kenya or Ivory Coast.

He warned that Ghana risks falling behind in attracting new exploration efforts. This trend could have long-term effects on mining output and revenue streams.

“No exploration today means no new mines tomorrow,” he concluded.