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

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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