The Ghana mining sector faces serious risks that could slow its growth and weaken its competitiveness, the Ghana Chamber of Mines warns.

Acting Chief Executive Ahmed Nantogmah criticized new tax policies that may push exploration companies away, reduce investment, and threaten existing mining firms.

Speaking on PM Express Business Edition on May 22, Nantogmah condemned the government’s 3% levy on gross production and the VAT applied to exploration activities.

He said, “Exploration is the lifeline of mining. Charging VAT on exploration punishes the risk-takers driving the industry.”

Nantogmah explained that taxing key tasks like drilling and assay raises costs for ventures with uncertain outcomes.

“Imagine spending $10 million on exploration, finding nothing, and still paying non-refundable VAT. That wastes money,” he said.

Smaller firms, responsible for most greenfield exploration, lack the funds to cover these taxes. Many have moved their operations to countries like Côte d’Ivoire and Kenya, where exploration enjoys incentives.

“These smaller companies don’t have deep pockets. They shift to Kenya and Ivory Coast where VAT does not apply,” Nantogmah added.

He warned that Ghana risks losing new exploration to neighboring countries, which could lower future mining output and government revenue.