Ghana grants Gold Fields tax rate cut as firm mulls Damang mine faith
South Africa’s Gold Fields (NYSE, JSE:GFI) announced Tuesday the government of Ghana has agreed to lower the corporate tax and royalty rate on the company, which is currently reviewing a $100 million expansion of the Damang operation in the country.
Gold Fields has not yet decided whether to inject more cash into Damang or suspend operations.
The deal, said the miner, includes a cut in corporate tax to 32.5% from 35 percent, and a change in the royalty rate to one based on the gold price rather than a flat 5% of revenue, effective from January 2017.
Gold Fields, the world’s seventh-largest bullion producer with operations from Australia to Peru, unveiled in November that it was evaluating whether to invest in Damang, or if it would be better to keep the gold in the ground until prices for the precious metal recover.
The company has not yet decided whether to inject more cash into Damang or suspend operations, which would put 2,000 jobs at risk.