00:00Gold is smashing records. We're talking over 5,000 US dollars an ounce.
00:06And while gold investors celebrate, Ghana just made a move that is shaking the mining world.
00:12President John Mahama's government has increased the royalty rate on gold.
00:16Mining giants and even the US and China are sounding the alarm.
00:21Is Ghana finally taking control of its mineral wealth or risking the future of the industry?
00:28Welcome to the flip side.
00:30For more than a decade, Ghana charged a flat 5% royalty on war gold.
00:35But with prices soaring, the government says it has been losing billions.
00:40For March 10, a new sliding scale kicks in.
00:44The higher the price of gold, the higher the royalty, up to 12%.
00:48Despite criticism, officials say the policy stands.
00:52With gold above 5,000 US dollars, Ghana has effectively jumped to the maximum 12%.
00:59More than double the old rate.
01:01And it's not just gold.
01:03Lithium is moving to a similar scale.
01:05The goal to rake in more mineral revenues for infrastructure projects, such as schools and hospitals.
01:12But others warned the scale made by fire, pushing investment into neighboring countries.
01:17Investment, whether they are local or they are foreign, you know, they are rational.
01:22And so where they will get their best return for their investment is where they are going to go to.
01:27So our proposal to government was the fact that we needed to find a sweet spot where government benefits with
01:34a heightened price of gold.
01:36The people in these communities where gold is mined also get to get some of their roads and some heritage
01:45project done that they could point to.
01:46That when gold prices were high, this is what the benefits they got.
01:50On the streets, support for the new royalty hike is strong.
01:53The first question I want to ask, those companies protesting, are they Ghanaian companies?
02:00If they are foreign companies, the land belongs to Ghanaians.
02:04And therefore we have to get a major percentage from the mines that they are doing.
02:09I think it's a good move.
02:12It's a high time Ghana get something out of revenue.
02:21Because the foreigners come in and then they take whatever they want and then leave us that 5%, I think
02:27it's too small.
02:36But mining giants aren't cheering.
02:39Companies like Newmont and Goldfield warn that a high could choke future investment.
02:44And in a rare diplomatic move, the US, UK and China have lodged a joint protest.
02:51Their argument, if Ghana gets too expensive, the big money will simply move next door.
02:57If you introduce this sliding scale, yes, you may accrue some revenue.
03:02But the net effect will be some job losses, close to about a million jobs.
03:09Because the investment required did not come in.
03:12They are not going to get the employer's tax, employee's tax, tax from companies and what have you.
03:20So, is Ghana playing with fire or finally claiming a fair share of its gold?
03:25There are other mechanisms or policies that are going to be subsequently rolled out to ensure that foreign mining companies,
03:35for example, have very pleasant working experiences in Ghana.
03:40They would have a convivial atmosphere to transact business.
03:43But for the current royalties proposition, nothing is changing about it.
03:47It's too early to know how the new policy will reshape Ghana's mining sector.
03:52But one thing is clear.
03:53Ghana doesn't want to remain just an exporter of raw gold.
03:57It wants refining, processing and value addition right at home.
04:03And that is the flip side.
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