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Gold Fields wants Ghana tax flexibility or might halt $1b investment

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Johannesburg-based miner, Gold Fields might halt a $1 billion investment which it intends spending in Ghana in the coming years as a result of the increment of taxes proposed in the 2012 budget.

According to officials, the investment is planned for the expansion of its operated Tarkwa and Damang mines in the country.

The Reuters News Agency reports that the company’s CEO Nick Holland told investors December 5, 2011 that it is now uncertain about the $1 billion project pipeline in Ghana due to the tax changes regime.

“The tax situation is a big concern to us, and frankly unless we are going to see some flexibility on the tax situation, I don’t think we will be building the project in the form that is being described today, if at all,” Reuters quoted Mr Holland as saying.

“Both of those projects (Tarkwa and Damang) represent incremental investment of $1 billion into the country … There needs to be a better dispensation for us to proceed,” he said.

Read in Parliament November 16, 2011 by Finance Minister Dr Kwabena Duffuor, the 2012 budget proposed an increment of corporate tax on mining from 25% to 35% as well as introduce a windfall profit tax of 10% for all miners.

Gold Fields is also unhappy with the Ghana government about the unfair playing field in the payment of taxes and royalties.

According to the Group, it pays more taxes and royalties than any of the major mining firms in Ghana

When contacted to comment on Gold Fields’ issue, CEO of the Ghana Chamber of Mines, Dr Toni Aubynn told ghanabusinessnews.com that “I saw it coming. The taxes will not encourage investment.”

“I agree with what they are saying,” Dr Aubynn said.

Figures disclosed by the miners group show that Ghana’s economy has received an investment of $10 billion between 2000 and 2010 from the sector and it contributed about 23% of the country’s internally generated revenues in 2010.

The mining sector, according to the chamber, was also leader of foreign direct investments (FDIs) into the country since 1998 to 2008.

By Ekow Quandzie

Gold Fields CEO Nick Holland addressing investors

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One comment

  1. Nonse, nonse, leave the Gold on the ground which will not rotten. Tell your shareeholders to keep their money instead of rippen of poor , ignorant African leaders who continue to allow their people to be ripoff of their wealth. Go to Belgium and elsewhere to find out how much the precious metal worth.