The mining sector is facing a critical challenge that could erode its competitive edge and cripple future growth, the Ghana Chamber of Mines has warned.
The Chamber is raising red flags over new tax measures that could drive exploration firms away, stifle investment, and potentially collapse some existing mining companies.
Speaking on PM Express Business Edition on Thursday, May 22, Acting Chief Executive of the Chamber, Ahmed Nantogmah, expressed concern over the government’s recent fiscal decisions, particularly the imposition of a 3% levy on gross production and the introduction of Value Added Tax (VAT) on exploration activities.
“Exploration is the lifeline of mining,” he stated. “Now there’s a VAT on exploration. Most of these explorers are risk-takers, but they’re being punished for taking that risk.”
He explained that the core activities of exploration — including drilling and assay — are now subject to tax, significantly increasing the financial burden on early-stage ventures that are already fragile.
“You can imagine putting $10 million into exploration, making no discovery, and still paying VAT on that failed attempt. That VAT will not be refunded. It’s money thrown down the drain,” he said.
According to the Chamber, this policy shift is proving costly for Ghana’s mining prospects.
Smaller firms, which are responsible for most greenfield exploration, lack the financial muscle to absorb these new taxes. As a result, many are relocating their operations to neighbouring countries such as Côte d’Ivoire and Kenya, where exploration is incentivised rather than penalised.
“These companies are small,” Mr. Nantogmah explained. “They don’t have deep pockets. That’s why they go to places like Kenya or Ivory Coast, where they don’t pay this VAT. So, you’ll see a movement of exploration companies going there.”
He warned that Ghana is already falling behind its peers in attracting fresh exploration efforts — a trend that could severely impact the country’s future mining output and revenue.
“No exploration today means no new mines tomorrow,” he stressed.