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Tax removal aims to boost greenfield mining investment

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Small-scale mining leads to record gold exports

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Miners welcome removal of barrier to exploration spending

By Christian Akorlie and Emmanuel Bruce

ACCRA, Nov 14 (Reuters) - Ghana will abolish value-added

tax on mineral exploration and reconnaissance to boost

investment in its mining sector, its finance minister said, as

Africa's top bullion producer seeks to reverse over two decades

of sluggish new development.

Ghana, which has been overhauling its mining sector,

introduced the levy 25 years ago amid broader fiscal reforms.

The 15% tax covers exploration-related expenses such as

drilling and assay work, hiking upfront costs for companies

operating in the high-risk early stages of mining projects.

Industry groups, including the Ghana Chamber of Mines, have

long argued that the tax discouraged greenfield investment and

eroded Ghana's competitiveness versus the likes of Ivory Coast,

Burkina Faso and Kenya, which exempt exploration from VAT.

"Abolishing VAT will revive investor confidence, stimulate

greenfield activity, and ensure the long-term sustainability of

the country's mining sector," Cassiel Ato Forson told parliament

during the 2026 budget presentation on Thursday.

The measure, part of a broader VAT review, is aimed at

promoting responsible mining and curbing unregulated prospecting

that has degraded forests and waterways, Forson added.

SMALL-SCALE MINING DRIVES RECORD GOLD OUTPUT

The policy shift comes after Ghana posted record small-scale

gold exports between January and October.

Shipments surged to 81.7 metric tons worth about $8.1

billion, surpassing large-scale exports of 74.1 tons worth $6.6

billion for the first time, according to finance ministry data.

Ghana had aimed to produce about 144.5 tons of gold in 2025.

The surge underscores the impact of recent regulatory

reforms that have formalised artisanal mining and tightened

export controls, Forson said.

The Chamber of Mines welcomed the VAT removal.

"VAT on exploration negatively affected our competitiveness

as a mining jurisdiction and was a clog on the pipeline of

projects," its president, Michael Akafia, told Reuters.

Ghana's mining sector, which accounts for over a third of

export revenues, is dominated by gold alongside bauxite and

manganese.

The government launched an audit this month - part of broad

reforms - to boost earnings from the industry.

Major operators include Newmont ( NEM ), AngloGold Ashanti ( AU )

, Gold Fields, Perseus and China's Zijin

and Cardinal Namdini.