Government has granted tax and royalty concessions to mining firm Gold Fields Ghana Limited.
This is part of the stability agreement reached after three year talks with the government to ease its tax burden on Gold Fields.
[contextly_sidebar id=”t3qixLWwR58074GmWnhUe6YoRY9OQte3″]The mining industry, is currently reeling under threats of increased resource rent tax and excessive demands to provide basic infrastructure in mining communities and fall in gold prices which has ballooned the cost of operations leading to shut down of some operations and massive layoffs.
The stability agreement Citi Business News understands will help Gold Fields in saving some 33million dollars at its two mines which will feed into its deliberations about the future of its Damang mine.
In an interview with Citi Business News the Chief Executive Officer and Executive Director of Gold Fields Nick Holland said the agreement is a win-win for the company and Ghana.
‘‘What we can do here is we think there is a good opportunity now to come up with a reinvestment for the mine. We are still working the numbers we haven’t finished yet. We should be finished with the analysis and recommendations to our board by the middle of the year and then we will be able to take a decision but certainly, I think the development agreement puts us in a strong position to bring about a longer term profile for the mine and for Tarkwa, I think also it ensures a long term sustainability because we have to invest quite a lot of money back into these mines for capital strip to expose the body for the future so let’s ensure that we continue to do that”, he said.
“I think it’s a win win for the country because it will ensure more revenue, more foreign exchange earnings and in the long run more taxes, and absolute terms and royalties and more jobs and certainly protection of existing jobs at the minimum for a longer period of time”, he added.
He explained that the company is looking at 10 years with the potential to renew for a further 5 years.
“There is obviously the reductions in taxes and royalties and it’s very difficult to quantify and it really depends on what the gold price is and what our costs are, but certainly it is more beneficial than what we had so that does improve the sustainability the operations again but I wouldn’t want to site numbers because it really depends on the prices and costs”, he stated.
Mr. Holland spoke to Citi Business News at the sidelines at the handing over of three tents at the Shai Hills Game Reserve to the Forestry Commission. He said in the Shai Hills project itself, which is a natural reserve, we in fact invested a fair some of money in building some tents to attract people back to nature hills so that people can recognize the value of nature. So now we have showed our interest in that to the forestry commission and the idea is for them to find an acre and take us to the next level.
“We also remain involved in the leadership conservation of Africa and we will continue to provide top leadership and guidance advice to the LCIA in protecting our forests and also looking at reforestation in Africa to make sure that in 50 years’ time, we don’t end up in with no forest left so we will continue to play our role’’, he said.
By: Norvan Acqua-Hayford /citibusinessnews.com/Ghana