Minerals Commission proposes community development agreements, abolishes stability clauses

The Minerals Commission has proposed significant reforms to Ghana’s mining sector, including mandatory community development agreements (CDAs) and the removal of long-term stability clauses in mining contracts, the CEO, Martin Ayisi, has revealed.

Speaking at a roundtable organised by the Institute of Economic Affairs (IEA) in Accra, Mr. Ayisi said the revised law will require mining companies to sign a community development agreement within six months of receiving a mining lease. “This provision seeks to formalise it to put Ghana at par with other countries,” he explained, saying that previously, community development initiatives were voluntary and tax-deductible, reducing revenue for the state.

He also addressed stability clauses, which currently guarantee investors fixed fiscal terms for long periods. Under the new system, the upper limit for stability periods will be five years, sufficient to cover the typical capital recovery period of two to five years for most mining projects. “The whole idea of stability has to do with risks, in particular project finance,” Mr. Ayisi said.

On development agreements, he noted that such arrangements had outlived their usefulness in Ghana, given the country’s strong mining history.

Other proposals in the revised mining law include abolishing development agreements by mining companies and formalising community obligations in all mining leases.

The CEO said the amendments aim to strengthen transparency, increase local participation, and ensure sustainable benefits from mining operations. “The new framework will help prevent the abuses that characterised the current indefinite duration in Act 703,” he added.

According to Mr. Ayisi, the Minerals Commission conducted wide-ranging consultations with stakeholders, including chiefs, civil society groups, and sector experts, to ensure the reforms are practical and globally competitive.

The updated policy and law are expected to be announced before the end of the year, ushering in a new era for mining governance in Ghana.