Parliament has approved a one-year transitional mining lease agreement between the Government of Ghana and Abosso Goldfields Limited for gold mining operations at Damang in the Wassa West District of the Western Region.
The lease, which follows the expiration of the previous agreement on April 18, 2025, is set to expire in April 2026 and explicitly prohibits any further extension, transfer, mortgage, or related transactions beyond that date.
Initially, the government had planned to take over operations after the expiration of the original lease.
However, following further consultations, it agreed to extend the arrangement by one additional year under strict non-renewable terms.
Background
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.
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.
