Ghana grants Gold Fields tax and royalty concessions - BDlive
Gold Fields has secured tax and royalty concessions in Ghana, which would have netted it savings of $33m at its two mines last year, and will feed into its deliberations about the future of its Damang mine.
Gold Fields bore the brunt of upward tax revisions a number of years ago, with the bulk of mining companies operating in Ghana shielded by stability agreements. About three years ago, the JSE-listed gold miner started talks with the government to ease its tax burden.
As of March 17, Gold Fields’ corporate tax was lowered to 32.5% from 35%, and it will pay royalties on a sliding rate, depending on the gold price in dollars, with a 3%-5% range, a change from the flat 5% charge on revenue.
Based on the performance of its opencast Damang and Tarkwa mines in Ghana last year, this would have resulted in a $45/oz reduction in all-in costs, translating to a $33m saving.
Gold Fields calculated there would be a 5% saving on all-in costs at Tarkwa over a 15-year life of mine, spokesman Sven Lunsche said.
The reduced payments to the government would also feed into the review of Damang, which Gold Fields CEO Nick Holland said late last year could either be put onto care and maintenance, or have an injection of capital to widen the 10-year-old pit and extend its life.
"The question is whether the gold price is actually high enough for us to have the guts to spend the money at this stage," Mr Holland said last month.
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