Overview of the Minerals and Mining 1 Click to download document

Ghana's Minerals and Mining Act, 2006 (Act 703), serves as the cornerstone of the nation's mineral resource governance, consolidating laws related to mining and establishing a framework for mineral rights, royalties, and environmental protection. Overseen by the Minerals Commission, the Act aims to foster sustainable development and attract investment while ensuring national benefit. Recent years have seen significant proposed reforms, including increased royalties, shorter lease durations, and mandatory community development agreements, reflecting a governmental push to enhance fiscal take and local participation. Concurrently, the sector grapples with persistent challenges such as illegal mining and complex land compensation disputes, necessitating a dynamic and informed approach from legal practitioners navigating this evolving landscape.

Ghana, a prominent player in Africa's mining sector, particularly for gold, has long relied on its robust legal framework to govern the exploitation of its rich mineral resources. Central to this framework is the Minerals and Mining Act, 2006 (Act 703), which consolidated previous disparate laws into a single, comprehensive statute. This Act, alongside its subsidiary legislation and the oversight of the Minerals Commission, dictates the terms for mineral exploration, extraction, and associated activities, aiming to balance foreign investment attraction with the imperative of national development and environmental stewardship.

The regulatory landscape in Ghana's mining sector is currently undergoing significant proposed changes. Driven by mounting fiscal pressures and a desire to maximize benefits from surging commodity prices, the government is advocating for reforms that could substantially alter the operational environment for mining companies. These proposed amendments, coupled with ongoing challenges like illegal mining and land disputes, underscore the critical need for legal professionals to possess a deep understanding of the Act and its dynamic application.

This article provides an overview of Ghana's Minerals and Mining Act, 2006 (Act 703), examining its foundational principles, key regulatory bodies, and the recent and proposed amendments shaping the industry. It further delves into critical issues such as local content, environmental protection, and significant judicial and arbitral developments, offering practitioners essential insights into navigating Ghana's evolving mining legal regime.

The legal foundation for mining in Ghana is rooted in the 1992 Constitution, which unequivocally declares that every mineral in its natural state, whether in, under, or upon any land, rivers, streams, watercourses, the exclusive economic zone, or continental shelf, is the property of the Republic of Ghana. This ownership is vested in the President on behalf of, and in trust for, the people of Ghana. Article 268 of the Constitution further mandates parliamentary ratification for all transactions involving the grant of rights or concessions for mineral exploitation.

The Minerals and Mining Act, 2006 (Act 703), enacted to revise and consolidate the law relating to minerals and mining, operationalizes these constitutional provisions. It repealed previous legislation, including the Minerals and Mining Act, 1986 (P.N.C.D.I. 153) and the Small-scale Gold Mining Act, 1989 (P.N.C.D.I. 218). The Act establishes the framework for granting various mineral rights, including reconnaissance licenses, prospecting licenses, and mining leases, which are granted by the Minister for Lands and Natural Resources upon the advice and recommendation of the Minerals Commission.

The Minerals Commission, established under the Minerals Commission Act, 1993 (Act 450), is the primary regulatory body responsible for the efficient and effective regulation and management of Ghana's mineral resources. Its functions include processing applications for mineral rights, monitoring compliance, advising the government on mineral policy, and promoting sustainable mining practices. Key provisions of Act 703 also include the government's entitlement to a 10% free carried interest in the rights and obligations of mining leaseholders, and the requirement for royalty payments to the State, which historically stood at a flat rate of 5% of gross revenue, as amended by the Minerals and Mining (Amendment) Act, 2010 (Act 794).

The Minerals and Mining Act, 2006 (Act 703), has undergone several amendments, notably in 2015 (Act 900) and 2019 (Act 995), primarily addressing royalty payments and small-scale mining. However, the sector is currently facing a wave of proposed, more far-reaching reforms expected to be presented to Parliament by March 2026. These reforms aim to significantly increase the government's share of gold revenues, tighten control over natural resources, and address concerns over mining stability and development agreements. Proposed changes include substantially increasing royalty rates from the current 3-5% to 9-12%, indexed to global gold prices, and reducing the maximum term of mining leases from 30 years to 15 years, with renewals limited to 10-year periods.

A critical aspect of the evolving regulatory framework is the push for enhanced local content and participation. The Minerals and Mining (Local Content and Local Participation) Regulations, 2020 (L.I. 2431), aims to promote job creation, increase local expertise, and foster domestic business growth within the mining value chain. These regulations mandate the use of local goods and services, require the submission of localization programmes for recruitment and training of Ghanaians, and reserve certain roles and services for citizens. Furthermore, it introduces provisions requiring mineral right holders with significant capital expenditure to list at least 20% of their equity on the Ghana Stock Exchange within five years of commencing operations.

Environmental protection remains a significant concern, with the Minerals and Mining Act, 2006, requiring mineral right holders to obtain necessary approvals and permits from the Forestry Commission and the Environmental Protection Agency (EPA) before undertaking operations. The Environmental Protection Act (which replaced the Environmental Protection Agency Act, 1994 (Act 490) in January 2025) and the Environmental Assessment Regulations, 1999 (L.I. 1652), govern environmental protection by requiring Environmental Impact Assessments and annual environmental reports. Despite these provisions, the sector continues to grapple with damaging environmental effects, particularly from illegal mining activities, locally known as 'galamsey'.

The issue of illegal mining highlights a significant gap between the regulatory framework and its effective implementation. While Act 703 permits small-scale mining only by Ghanaian citizens aged 18 or older registered with the Minerals Commission, over 85% of small-scale mining operations remain informal and unregulated due to factors like cumbersome licensing processes and a regulatory framework that fails to account for the diverse realities of operations.

Recent judicial pronouncements also shape the landscape. In *Ntiamoah Dankyira & 2 Ors v. Newmont Golden Ridge Co. Ltd* (May 2026), the Supreme Court of Ghana reinforced the state's regulatory authority over mining compensation disputes. The Court ruled that the High Court lacks jurisdiction to hear such disputes unless the matter has first been referred to the Minister of Mines, establishing a regulatory-first approach. Internationally, the *Cassius Mining Limited v. Republic of Ghana* arbitration case, involving a claim for US$905 million due to the non-renewal of a prospecting license, underscores the risks associated with contractual stability and the government's exercise of discretion in the mining sector.

The Ghanaian mining sector is at a pivotal juncture, characterized by ambitious legislative reforms aimed at enhancing national benefits and addressing long-standing challenges. The proposed amendments to the Minerals and Mining Act, 2006, particularly concerning royalties, stability agreements, and local content, signal a more assertive stance by the government in regulating its mineral wealth. For legal practitioners, this necessitates a proactive approach to understanding and advising clients on the potential impacts of these changes on existing and future investments.

Navigating this evolving landscape requires diligence in due diligence, careful contract drafting, and a keen awareness of the interplay between statutory provisions, subsidiary legislation, and judicial interpretations. The emphasis on local content, environmental compliance, and the formalization of small-scale mining presents both opportunities and compliance hurdles. Attorneys must stay abreast of legislative developments, engage with regulatory bodies like the Minerals Commission, and be prepared for potential shifts in the risk profile of mining operations in Ghana, ensuring their clients remain compliant and strategically positioned in this dynamic and vital industry.