The Institute of Economic Affairs (IEA) has strongly opposed the planned sale of Newmont’s Akyem Gold Mine to China’s Zijin Mining Group for $1 billion.

The IEA argues that the sale undermines Ghana’s economic interests and violates key terms of the mine’s lease agreement, set to expire in January 2025.

In a press release dated Monday, October 21, 2024, the IEA highlighted that the original lease agreement requires government approval for any transfer of ownership, and there is no record of such approval.

Furthermore, the Institute stressed that Ghanaian investors should be prioritized, aligning with President Akufo-Addo’s previous statements on keeping mineral wealth in local hands.

Citing flaws in the original contract, including inadequate royalties and taxes, the IEA called for the sale to be blocked and for Parliament to reject it.

They emphasized the importance of national ownership in the mining sector to ensure long-term economic benefits for Ghana.

The IEA warned that allowing the sale to go through would mirror colonial-era contracts, which favoured foreign interests, leaving Ghana with minimal returns.

They advocated for public-private partnerships (PPP) as an alternative solution to keep control of the mine in Ghanaian hands.

“The IEA wishes to state categorically that the purported sale by Newmont of the Akyem Gold Mine to Zijin is unjustified and legally flawed and must, therefore, not be ratified by Parliament,” it stated.

“Allowing Zijin to buy the mine for US$1.0 billion, which would accrue to Newmont, and presumably allowing Zijin to pay only royalties and taxes to Ghana, would…substantially shortchange the country,” it added.

The IEA also recommended that Newmont should sell the Akyem Gold Mine to Ghanaian investors, ensuring the wealth generated from the mine remains in the country.

The statement also suggests a public-private partnership (PPP) between the government and the local private sector to purchase the mine if necessary:

“If Newmont wishes to sell the mine, it must sell it to Ghanaian investors so that the wealth generated would remain in Ghana for the development of the country”

The IEA proposes amending Article 257(6) of the Constitution, which currently vests control of Ghana’s natural resources in the President. The Institute suggested that the resources should instead be vested in the state, and all major contracts should require Parliamentary ratification.

“The natural resources should rather be vested in the state and every contract should require Parliamentary ratification as per Article 268(1) of the Constitution.”