Newmont Ghana has indicated its commitment to partner the government to drive improvements in the country’s economic programmes.

This follows successful sale of 3,500 ounces of gold to the Bank of Ghana in its first ever domestic gold purchasing programme launched in June 2021. This has made the gold mining giant the first mining company to respond to the Central Bank’s initiative which is a very significant milestone in the fiscal history of the country.

Vice President in charge of Government Relations and Strategic Development at Newmont Ghana, Kwame Addo Kufuor, speaking to Joy Business, said his outfit is glad to have responded positively to the Bank of Ghana’s novel initiative of buying gold to shore up the country’s reserves.

“We are naturally glad that we‘ve been able to respond to Bank of Ghana’s novel initiative of buying gold in-country to shore up its reserves. Our response is a reflection of our commitment to partner the Government of Ghana to drive improvements in the country’s economic programmes.”

More importantly, he said, this is an example of how critical mining can be to a country’s economic development, adding “we are happy that we are able to partner with the Bank of Ghana on an initiative is intended to strengthen the fiscal stability of our economy”.

On what informed Newmont’s decision to sell its gold to the Central Bank, Mr. Addo-Kufuor said “when the Bank of Ghana (BOG) initiated discussions with the Ghana Chamber of Mines (GCM) of its intention to purchase refined gold from mining firms in the country to bolster its reserves we welcomed the idea in principle. But we needed further assurance around governance, risk, compliance, and supply chain requirements. So, we proactively approached the Bank of Ghana to discuss those issues. Once both parties were satisfied, we signed an agreement that met all the requirements of both parties in December 2021.”

Under the gold purchase programme, the Bank of Ghana will annually require ~10 Koz of gold from the Chamber of Mines for the next four to five years of which Newmont will be required to contribute ~3.5 Koz per annum based on its market share within the mining industry in Ghana.

Mr. Addo-Kufuor said “it is our expectation that the programme will serve its purpose as a long-term measure to help in stabilising the economy”.

The refined gold was sold to the Bank of Ghana at market price (using the London Bullion Market Association price).

Newmont to contribute more to economy

Last year, Newmont Ghana paid a little over ¢1.869 billion cedis in taxes and carried interest to the government as part of its fiscal commitments.

The amount comprised Corporate Income Tax of ¢1.066 billion; Mineral Royalties – ¢364 million; Pay As You Earn (PAYE) – ¢185 million; Carried Interest –¢140 million; Withholding Tax – ¢90 million; and Forestry Levy - ¢24 million. The 2021 fiscal payment was 2.1% higher than that of 2020 driven by gold price and higher production.

Additionally, Newmont paid ¢574 million in fiscal payments to the state covering Corporate Income Tax, Minerals Royalties, PAYE, Carried Interest, Withholding Tax and Forest Levy in the first quarter of 2022.

Mining giant committed to developing host communities  

Newmont said it will strive to maintain productive relations with its host communities which it believe is essential to the social license and sustainability.

Aside stimulating direct and indirect jobs, the company has established development foundations in the two operational areas to drive the advancement of host communities. The Foundations are independently managed by the community through structured governance processes and are funded with $1/ounce of gold sold and an additional 1.0% of net profit.

So far, both foundations have accrued about $54.3m which has been invested in human resource development initiatives, livelihood empowerment programmes, social services support, health, and educational infrastructure as well as the sustenance of the cultural heritage of the people.

Newmont has so far invested $3.4 billion in Ghana’s operations and is one of the leading investors in Ghana’s mining sector contributing to economic growth and the country’s agenda for social transformation.

Mr. Addo-Kufuor concluded that there are further prospects in the region for development and the firm hope that in due course it will be able to actualize and create further value for all Ghanaians.