AngloGold Ashanti is on a rollercoaster with $259m in tax waiver

The third-largest gold mining company in the world, AngloGold Ashanti Limited has been granted tax waiver to the tune of $259 million.

The mining company with its headquarters in Johannesburg, South Africa was granted the tax concession by Ghana’s parliament in 2018.

The tax waiver is coming four years after the mining company was shut down operations in the Obuasi underground mine in Ashanti region in 2014.

AngloGold Ashanti emerged in 2004 after the merger of AngloGold and the Ashanti Goldfields Corporation.

The merger berthed a global gold producer with 21 operations on four different continents.

In a statement released on Friday, June 22, 2018, the AngloGold Ashanti announced that the Parliament of Ghana ratified the regulatory and fiscal agreements that cover the redevelopment of the Obuasi Gold Mine into a modern, productive mining operation.

The statement further said the ratification of the Development Agreement and the Tax Concession Agreement is an important step in progressing Obuasi’s redevelopment.

“The environmental permitting process is also at an advanced stage. The Board of Directors of AngloGold Ashanti had approved spending of $31m in February 2018, for front-end engineering and other preparatory work for the mine’s redevelopment, which is continuing,” the statement reads.

In his reaction, AngloGold Ashanti Chief Executive Officer, Srinivasan Venkatakrishnan, said: “This is an important milestone that follows extensive negotiations and debate. Obuasi is a high-grade, long-life ore body that will provide production for at least two decades at a very competitive cost, which will benefit a truly diverse set of stakeholders.

“We’d like to extend special thanks to His Excellency, President Nana Akufo-Addo, the Honourable Minister of Lands and Natural Resources, John-Peter Amewu, Minister of Finance, Ken Ofori-Atta, their respective Deputy Ministers and their teams, for providing leadership that produced an equitable outcome to benefit the national, regional and local economies,” Venkat said.

Benefits of tax waiver to Ghanaians

The major aim of the tax waiver granted AngloGold Ashanti by the parliament is to enable the mining company to restructure and revamp its Obuasi underground mine.

It is also believed that being one of the oldest mines in the country, Obuasi is expected to create between 2,000 and 2,500 jobs with expected earnings of about $5.3 billion in the next 22 years.

Chairman of Parliament’s Finance Committee, Dr. Mark Assibey Yeboah, said the virtues of the deal and highlighted its importance to the people of Obuasi and its environs in terms of job creation.