How Ghana’s mining reforms may impact investments?

Ghana is intensifying efforts to crackdown on illegal mining activities by revoking all small-scale mining licenses granted after the 7th of December, 2024. This move is part of a series of sweeping reforms in the country's mining sector aimed at sanitizing the industry and maximizing its contribution to the economy. In a recent interview on CNBC Africa, George Arhin, Partner and West Africa Mining Leader at PwC Ghana, discussed the impact of these reforms and the overall investment appetite in the mining sector. The mining industry in Ghana has historically been a key player in the nation's economy, with the sector contributing a significant 33% to the GDP in the last quarter of 2024. Recognizing the importance of the sector, the government has implemented several major reforms to ensure its sustainable growth. One of the key reforms is the establishment of the Ghana Gold Board, which is set to have exclusive rights to buy and export gold in the country. This initiative aims to regulate the small-scale mining industry and bring it into the formal sector to increase export earnings. Another crucial reform is the revocation of mining leases for small-scale companies granted after December 7, 2023. This move is aimed at curbing illegal mining activities that have plagued the country and ensuring that operations comply with international standards. The Ghana Gold Board will also facilitate responsible buying and selling of gold by tracing the origin of gold produce to combat illegal mining further. Additionally, the Blue Water Initiative, a collaboration between the Minerals Commission and the Ghana Navy, has trained 2,000 community vanguards to protect water bodies from mining activities. The initiative aims to safeguard water resources and prevent environmental degradation caused by illegal mining. Furthermore, the legislative instrument LI2462 permits mining in 228 forest reserves in Ghana, despite conflicting with the forest development plan. Efforts are underway to resolve this contradiction and cease mining activities in forest reserves by 2036. The local refining of gold is another critical aspect of Ghana's mining strategy. The Ghana Gold Board's full operation, coupled with ongoing discussions with the Gold Coast Refinery, will streamline the buying and selling of gold in the country. This harmonization will help combat illegal mining activities and ensure that all gold transactions are traceable and conducted responsibly. Moreover, strengthening the investment climate in Ghana requires a robust Ghanaian currency, supported by increased foreign exchange earnings. The centralized control of gold sales by the Ghana Gold Board will boost the country's foreign exchange reserves, supporting economic development and currency stability. As these reforms take effect in Ghana's mining sector, stakeholders will be closely monitoring the developments to gauge their impact on the economy. George Arhin emphasized the importance of these reforms in transforming the mining industry and boosting the country's economic prospects.