Thursday, June 24, 2021

Grant VAT exemption to exploration firms to avert dwindling investments – Ghana Chamber of Mines

The Ghana Chamber of Mines is calling on government to exempt exploration companies from paying VAT on big ticket cost items such as drilling and laboratory services, to prevent dwindling investments in the industry.

“Effectively, the extent of actual exploration activity is diminished by upfront costs such as VAT on input and landholding costs. Thus, relieving the usually illiquid exploration companies from the payment of VAT as well as reducing the cost of landholding would not only improve their cash flow and reduce their operational costs but also enhance Ghana’s image as competitive destination for exploration investment”, it said.

Ghana has dropped to 4th in terms of budget for gold exploration on the continent.

Whilst, the budgetary allocation to Mali for gold exploration projects increased from $91.9m in 2019 to $94.6 million in 2020, that of Ghana fell from US$98.6 million to $84.6 million in the same period.

President of the Ghana Chamber of Mines, Eric Asubonteng says incentives for exploration activities will guarantee continuous mineral production and flow of fiscal and forex receipts as well as other benefits from the minerals sector.

Distribution of budgets for gold exploration projects in Africa

Country Budget (US$) Share of Africa budget Rank in Africa
Ivory Coast 105m 17.8% 1st
Burkina Faso 100.4m 17.0% 2nd
Mali 94.6m 16.0% 3rd
Ghana 84.6m 14.3% 4th
Guinea 39.1m 6.6% 5th
Tanzania 32.5m 5.5% 6th
       

Meanwhile, Gold Fields was the top gold producing company in the country in 2020, generating a little above 500,000 ounces of gold.

It was followed by Newmont Gold Ghana Limited (450,000) in 2nd, Newmont Golden Ridge Limited (370,000) in 3rd and the AngloGold Ashanti Iduapreim in the Western region in 4th position with production of about 260,000 ounces of gold.

Top gold producing firms in Ghana in 2020

Gold Fields                                                                 – 1st

Newmont Gold Ghana Limited                                  -2nd

Newmont Golden Ridge Limited                               -3rd

AngloGold Ashanti Iduapreim                                    -4th  

Asanko Gold Mine                                                       -5th

Abosso Gold Fields Golden Star Wassa                   -6th

Chirano Gold Mines                                                      -7th

Perseus Mining                                                             -8th

AngloGold Ashanti Obuasi mines                              -9th

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