ACEP Supports Damang Mine Lease Extension, Cautions Against Hasty Government Takeover

Summary: The Africa Centre for Energy Policy (ACEP) has expressed support for the Ghanaian government’s decision to grant a 12-month lease extension to Abosso Goldfields Limited for the Damang Mine, emphasizing the importance of transparency during this transitional period. However, ACEP has raised concerns over the government’s initial move to assume control of the mine following the lease’s expiration, warning that such actions could undermine investor confidence and expose the country to legal challenges. As reported by Accra Street Journal, ACEP urges the government to engage in transparent and legally sound processes to ensure that Ghana’s mineral wealth is managed in a manner that safeguards both national interests and investor trust

Detailed: The Africa Centre for Energy Policy (ACEP) has thrown its support behind the Government of Ghana‘s decision to grant a 12-month lease extension to Abosso Goldfields Ltd (AGL) for operations at the Damang Mine, but is urging caution as discussions over full state ownership gather steam.

In a statement dated April 24, ACEP described the extension as a “step in the right direction” that maintains operational continuity and investor confidence while offering space for broader stakeholder dialogue. The conditional extension, pending parliamentary approval in May 2025, allows mining to proceed under a joint public-private management arrangement, deferring final transfer of ownership until the lease expires.

Crucially, ACEP applauded the government’s phased, consultative approach, hailing it as consistent with the Centre’s long-standing calls for transparency, due process, and sustainable transition strategies in resource governance.

However, the policy think tank also issued a strong advisory against romanticising state control of the mine.

“Mining is not a patriotic hobby it is a capital-heavy, high-risk industry,” ACEP cautioned.

The group expressed serious concern over the state’s capacity to manage such an asset, particularly through the Minerals Income Investment Fund (MIIF), which has been widely tipped to lead the takeover. MIIF, ACEP noted, has yet to demonstrate the operational and financial muscle needed for a project of Damang’s complexity.

Highlighting a looming $600 million investment requirement to keep the mine viable, ACEP advised the government to consider a staggered equity acquisition model that allows for risk-sharing with experienced investors.

“The most prudent path forward is one that balances national interest with commercial sensibility,” it added.

The statement also evoked Ghana’s troubled past with resource nationalism in the 1970s, warning that a hasty transition could repeat historic mistakes and undermine the long-term value the government hopes to achieve through localisation.

ACEP closed by calling on the government to widen its consultations and explore alternative ownership models that would ensure economic value is retained without compromising efficiency or investor confidence.

Last Updated on April 28, 2025 by samboad