The proposed sale of Newmont’s Akyem Gold Mine to China’s Zijin Mining Group for $1 billion has drawn fierce criticism from the Institute of Economic Affairs (IEA).

The IEA contends that the transaction threatens Ghana's economic interests and breaches key provisions of the mine's lease agreement, set to expire in January 2025.

In a press release dated Monday, October 21, 2024, the IEA raised concerns about the legality of the sale, noting that the original lease requires government approval for any ownership transfer, a requirement they assert has not been met.

They called for prioritizing Ghanaian investors, echoing President Akufo-Addo’s stance on keeping the nation’s mineral wealth local.

The IEA pointed to significant shortcomings in the original mining contract, such as insufficient royalties and taxes, and urged Parliament to block the sale.

They highlighted the necessity of national ownership in the mining sector to ensure sustainable economic benefits for Ghana.

“If Newmont wishes to sell the mine, it must sell it to Ghanaian investors so that the wealth generated would remain in Ghana for the development of the country”

The organization warned that permitting the sale would echo colonial-era agreements that favored foreign entities while leaving Ghana with minimal financial gain.

They further argued that allowing Zijin to purchase the mine for $1 billion—funds that would go to Newmont—while merely paying royalties and taxes to Ghana would severely undercut the country’s financial interests.

To remedy the situation, the IEA recommended that if Newmont is intent on selling the mine, it should be sold to Ghanaian investors to ensure that the resulting wealth remains in the nation.

They also proposed a public-private partnership (PPP) involving the government and local businesses to facilitate the acquisition if needed.

“Allowing Zijin to buy the mine for US$1.0 billion, which would accrue to Newmont, and presumably allowing Zijin to pay only royalties and taxes to Ghana, would…substantially shortchange the country,” it added.

Additionally, the IEA called for an amendment to Article 257(6) of the Constitution, which currently vests control of Ghana's natural resources in the President.

They argued that these resources should instead be held by the state, with all major contracts requiring ratification by Parliament.

“If Newmont wishes to sell the mine, it must sell it to Ghanaian investors so that the wealth generated would remain in Ghana for the development of the country”

“The natural resources should rather be vested in the state and every contract should require Parliamentary ratification as per Article 268(1) of the Constitution.”