Gold Fields gets one-year extension at Damang Mine in Ghana
Gold Fields said it will be given a 12-month lease to continue operating the Damang mine in Ghana, after the government initially rejected its application to extend the rights.
The Johannesburg-listed firm will "take all reasonable steps" to restart open pit mining at Damang, which it halted in 2023, Gold Fields said in a statement on Thursday.
The subsidiary that owns the asset will be allowed to resume the processing of surface stockpiles, it said. Ghana's government, led by President John Mahama since January, took the unusual step of refusing to renew the lease, saying Gold Fields' application had failed to declare mineral reserves, outline future plans, or allocate any exploration budget for Damang.
That reflected the new administration's "shift away from the neo-colonial posturing of automatic renewals of licenses," the land and natural resources ministry said 15 April, three days before the permit lapsed.
The resolution, first announced by the presidency on Wednesday, will see Gold Fields complete studies on extending Damang's life by the end of the year.
The miner and government will also establish a joint team "to ensure the successful transition of the asset to ownership by the people of Ghana," the company said.
African governments, from Mali to Zambia, are pushing for a larger share of the revenues generated by their natural resources.
Bullion's record-breaking rally this year has put a particular spotlight on the gold industry.
At the same time, soaring prices have encouraged some large producers to sell smaller mines that, without fresh investment, are approaching the end of their lives.
China'' Zijin Mining Group acquired the Akyem project in Ghana from Newmont Corp. for $1 billion (R18.5 billion), while Barrick Gold is seeking a buyer for its Tongon asset in the Ivory Coast.
Gold Fields has previously said it's weighing up whether to offload Damang.
Damang is a mature asset that contributed about 6% of Gold Fields' total output last year. The one-year extension requires ratification by Ghana's parliament, which will reconvene next month.
The company also operates the much larger Tarkwa mine in Ghana, which it wants to combine with AngloGold Ashanti's Iduapriem asset.
The two companies were unable to secure authorization for the merger under the previous administration, which was voted out of power in December.
Gold Fields and the government have agreed to start discussions on the renewal of Tarkwa's lease, which expires in 2027, according to the presidency's statement.
Ghana isn't the only West African gold producer acting more assertively over its resource assets.
Mali's military leaders have been renegotiating mining deals with investors and have threatened to take over Barrick's vast Loulo-Gounkoto complex, which has been shuttered for three months amid a dispute over revenues and alleged back taxes. Burkina Faso nationalized a pair of small gold operations last year, while Ivory Coast is updating mining legislation, and Senegal is reviewing existing contracts.
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