By: Jennifer Nerkie Kenney
The Managing Director of Bogoso Prestea Mines, Patrick Appiah Mensah, has raised concerns about the government’s proposed sliding scale royalty regime for gold, warning that it could increase operational costs and weaken Ghana’s position in the global mining sector.
Speaking on the GTV Breakfast Show on Wednesday April 8, 2026, Mr. Appiah Mensah explained that the policy, which seeks to raise royalties from about five percent to as high as 10 to 12 percent depending on gold prices, is intended to help the state maximise revenue from the country’s natural resources.
“Sliding scale royalty will increase costs and affect Ghana’s competitiveness,” he said.
He noted that the new policy aligns with government’s long-standing objective of ensuring the country derives maximum benefit from its gold resources, especially at a time when global prices remain high and revenue mobilisation is critical.
“Gold has been one of the key resources that make Ghana what it is, and it is important that as a nation we take advantage of that resource,” he said.
Mr. Appiah Mensah explained that royalties are essentially a tax paid by mining companies to the state based on revenue generated from mining activities, and under the new system, payments will increase as international gold prices rise.
“As gold price increases, the state gets more revenue from the gold produced,” he explained.
However, he clarified that mining companies do not control the price of gold, as it is determined on the international market, meaning the additional royalty burden cannot be passed on to buyers.
“We are price takers on the international stage; what this does to us is that it increases our operating cost and reduces our margins,” he said.
He warned that the policy could have implications for investment decisions, especially as Ghana competes with other countries in the sub-region for mining capital.
“It makes Ghana, compared to our peers in the sub-region, appear to be paying more for gold, and it affects our competitiveness,” he emphasised.
Mr. Appiah Mensah added that while mining companies support government’s efforts to increase revenue, there is a need for dialogue to address potential negative impacts on the industry.
“We support government’s drive to ensure more revenue is put into the system, but we need a conversation on how to mitigate the impact,” he said.
He also highlighted concerns about perceptions within mining communities, where residents often feel they have not benefited enough from the resources extracted from their areas.
“If you go to mining areas, there is a narrative that gold is mined there but nothing shows for it, and that creates a loss of confidence,” he noted.
According to him, achieving a balance between state revenue and investor profitability is critical, particularly given the capital-intensive nature of mining.
“You need to draw a careful balance between what the state takes and what will make the business profitable and economically sound,” he said.
Mr. Appiah Mensah further pointed out that the new royalty regime could pose greater challenges for smaller, locally owned mining firms that lack the financial strength of multinational companies.
“If your cost of operation is high, it affects your ability to have decent margins that can attract the needed investments,” he explained.
He further explained that while larger multinational firms may absorb such shocks due to diversified operations, Ghanaian companies could struggle to remain competitive under the new regime.
“For bigger companies, Ghana may not be their only place of operation, but for local firms, this could significantly affect their ability to compete,” he said.
