Ghana gov't rejects Gold Fields Damang lease renewal for another 30 years

An application by Gold Fields Limited to renew the Damang Mining Lease held by its subsidiary, Abosso Goldfields Limited, for another 30 years has been rejected, a top government source has revealed. 

This was corroborated in a statement released by Gold Fields Ghana Limited that the application to the Minerals Commission to extend the mining lease for the Damang Mine had been declined.

The decision not to renew the mining lease comes at a time when the existing 30-year lease granted on April 18, 1995, expires on April 18, 2025, marking a significant milestone in the government’s mission to reset the nation’s economic landscape.

Gold Fields Limited is the seventh biggest producer of gold in the world, and has two operational mines in Ghana, namely the Tarkwa Mine, which is operated by Gold Fields Ghana, and the Damang Mine, which is run by Abosso Goldfields Limited.

Renowned for its rich gold deposits, the Damang Mine is poised to play a pivotal role in strengthening Ghana’s economy.

The Government of Ghana held a 10 per cent share in both mines.

According to the 2024 Annual Report of the Gold Fields Group, which has mines in Canada, Australia, Peru, Chile and South Africa, the two mines in Ghana accounted for 32 per cent of the group’s gold production in 2024, meaning about a third of the entire gold produced by Gold Fields worldwide comes from Ghana.

Earlier reports indicated that before mining stopped at Damang, the Ghana mines of the company contributed about 40 per cent to the group.

Abosso Mine

The Abosso Mine initially operated from 1882 until 1956.

From 1989, Ranger Exploration, initially with other partners, first examined the feasibility of re-treating tailings from the Abosso Mine, and then the northeast extension of the Banket Conglomerates towards Damang village.

Further works carried out by Ranger between 1990 and 1992 demonstrated near-surface mineralisation.

By early 1996, three million ounces of mineral resources had been estimated in the area, and a feasibility study demonstrated that open pit mining would be viable.

Although the mining lease was granted on April 18, 1995, mining at the concession commenced in August 1997, with the first gold pour in November after the construction of the Damang Mine was completed earlier that year.

Gold Fields Limited and Repadre Capital Corp., a Toronto-listed mining royalty company, signed an agreement in 2001 to buy Ranger Exploration’s 90 per cent interest in Damang.

IAMGold and Repadre merged to give IAMGold an 18.9 per cent interest in Damang, and Gold Fields a 71.1 per cent interest.

In 2011, Gold Fields bought out IAMGold’s remaining interest in Damang, and the company now owns a 90 per cent stake, with the Government of Ghana holding the remaining 10 per cent.

According to the 2024 annual report of Gold Fields, no mineral reserves were declared at Damang, which meant there were no defined gold reserves to be mined there.

Actual mining at the mine is said to have stopped in 2023 as the company resorted to processing stockpiles.

In fact, it is stated in the Mineral Resources and Reserves Supplement to the Integrated Annual Report of 2023 that no exploration was proposed for the Damang Mine in 2024.

No reserves

The lack of reserves and the lack of funds for exploration spending for the Damang Mine appeared to suggest that the company was not interested in expanding mine life for the mine at Damang.

Additionally, the company this year intended to continue the processing of stockpiles in line with the life of the mine for at least one year.

The mine has since been considered as one that has not met the requirements and justification for an extension of lease.