Government of Ghana and Gold Fields Sign Transitional Agreement on Damang Mine
The Government of Ghana and Gold Fields, one of the world's major gold mining companies, have signed a transitional agreement for the operation of the Damang mine in Ghana's Western Region. This comes after the government declined to renew automatically the lease of the mine, which was to lapse on April 18, 2025 — a move which signalled a shift in the country's strategy in dealing with the renewal of mineral leases and the exploitation of natural resources.
The Damang mine, which has been in existence for decades, has long been regarded as a cornerstone of Ghana's gold mining industry. But the lease expiry caused uncertainty about the future of the mine and posed a risk to job security and local economic stability. The two parties therefore began negotiations, which have culminated in a 12-month transition agreement that secures operations on a go-slow basis until long-term planning.
Under the deal, Gold Fields will be issued a temporary one-year mining lease by a local subsidiary. The lease is pending parliamentary approval in May. Meanwhile, Gold Fields will be allowed to resume open-pit mining operations at the property and conduct detailed feasibility studies to determine long-term viability of the mine, including as-yet untapped gold reserves and potential future production levels.
Furthermore, processing of stockpiled ore during this time will be jointly handled by the Ghana government and Gold Fields. Other provisions in the deal are safety, environmental consideration, and maintaining the existing level of employment on the site that supports around 2,000 direct and indirect jobs.
The government has assured stakeholders that this is a one-off decision regarding the Damang lease and not a policy change that would have ramifications for other operations, including Gold Fields' larger and more productive Tarkwa mine. The Tarkwa lease comes up for renewal in 2027, and the company had been hopeful of continued negotiations with the government.
One of the most powerful motivators for the hardline stance by the government on lease renewals has been to have greater national control over natural resource extraction and to ensure that communities and the environment are not sacrificed. There has been growing public demand over the last few years for transparency and equity in the manner that Ghana's mineral resources are handled.
Gold Fields has made tangible efforts to meet such expectations over the past few years. It has initiated large-scale land reclamation projects in Damang, with over 800,000 trees planted to restore mined-out land. It has also lodged money securities with the government to ensure ongoing environmental restoration even after closure of the mine.
In addition to its environmental efforts, Gold Fields has also invested in host community social infrastructure. These include constructing clinics, school buildings, and access roads — all as part of a larger extended corporate social responsibility program aimed at supporting host community development. Expenditure has been over $1.5 million in the past few years and is slated to continue under the transitional agreement.
In the future, the transitional agreement sets the stage for sustained cooperation between Gold Fields and the government. It also presents the two parties with a chance to revisit Ghana's long-term mining sector arrangement — leases, monitoring, and renewal thereof — with emphasis on sustainability, economic growth, and national interest.
The coming months will be pivotal as the feasibility studies are conducted and a guideline for a new proposed lease is formulated. Whether or not the Damang mine enjoys a long future will depend largely on the findings of the studies and continued alignment of corporate goals with national policy. Regardless of the final decision, the current agreement offers an avenue that safeguards employment, honors local investments, and facilitates the shared responsibility of managing Ghana's minerals.
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Government of Ghana and Gold Fields Sign Transitional Agreement on Damang Mine
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