Mining consultant and energy expert, Dr. Kwabena Donkor, is debunking suggestions that the government is engaging in a resource nationalization agenda following the expiration of Gold Fields’ mining lease at Damang.
In an exclusive interview with The High Street Journal, the former Member of Parliament for Pru East and Minister for Power under the erstwhile President Mahama administration explained that the government’s actions are rooted in legal, economic, and industry best practices rather than resource nationalism ideology.
Dr. Kwabena Donkor, who spoke in his professional capacity as a mining consultant, outlined various reasons why the subject of resource nationalism does not arise. This clarification comes following comments suggesting that the refusal of the government to renew the lease and subsequent attempt to take over the mine point to the direction of resource nationalization.
Resource Nationalization
The concept describes a situation where the state takes ownership and control of private assets or industries, particularly natural resources like oil, minerals, or forests. This usually involves transferring ownership from private (often foreign) companies to the state.
The state, in this case, takes ownership and control of the exploitation in the interest of the nation. It is basically implemented through laws, buyouts, or expropriations.
The African Center for Energy Policy (ACEP), following the decision of the government to refuse the renewal application by Gold Fields, is calling on the state to come clear if the policy direction is nationalization of the resources.
“If the policy direction is to revisit the 1970s resource nationalisation efforts which collapsed the mining industry, we need clarity from the government on what will be different this time to leave no doubts in the minds of investors, especially when the required actions per the law are clear, but actions of implementers differ,” ACEP said in a press statement cited by The High Street Journal.
But Dr. Kwabena Donkor explains that, per the issues surrounding the case, there are no indications of resource nationalization.
The Lease Has Lapsed — That’s the Core Issue
According to Dr. Donkor, the core of the matter lies in the fact that the lease granted to Gold Fields Damang has expired. “I wouldn’t say the government is heading for nationalisation. The issues are clear. Has the lease lapsed? Yeah, the lease has lapsed,” he said.
He emphasized that whenever a lease expires, the concession automatically reverts to the state. In this case, he stated that the government is not forcefully taking over an active lease or concession legally operated by Gold Fields.
“The government is not taking over a mine that has been rightfully leased to Gold Fields. No, the lease has lapsed. That is the critical issue. It reverts to the government,” he clarified.
Failure to Explore Before Lease Expiration Was Costly
Dr. Kwabena Donkor further justifies the action of the government based on industry standards that require companies to conduct exploration to justify lease renewals.
According to him, Gold Fields missed a key opportunity to strengthen its negotiating power by not investing in additional exploration before the lease expired. With this, Gold Fields flouted critical operational and regulatory requirements needed for their lease to be renewed.
“There were a few steps they should have taken before the lease lapsed. Put in some money, do exploration. And that can even be justification that, look, we have pumped in this money. We have done further exploration. We know that there is approximately this quantum of ore left, and that can extend the life of the mine by another 10, 20 years. So that becomes leverage in negotiating new fiscal tips. If you do not do that, then you are not going to get the government, renew your lease, just on emotional terms,” he argued.
Government Seeking Better Fiscal Terms, Not Ownership
In renegotiating a new lease, Dr. Donkor revealed that it is the government’s responsibility to ensure the best value for the country. He explained that “in the extractive industry, you can increase your take without necessarily nationalising.”
He pointed out that fiscal terms can be improved in lease negotiations to give the state a fairer share of proceeds.
In his view, the question of nationalisation doesn’t even arise. It’s not about taking over a running operation; it’s about a lapsed lease. So the state has the right to look for better terms or even new investors.
“If there’s going to be a renewal, a greater percentage of the benefit of mining should go to the state. So this is not resource nationalisation or resource nationalism. It is only right and proper that we get more from our natural resources,” he told The High Street Journal.
Fears of Legal Tussle Allayed
The mining consultant further addressed concerns of a possible legal tussle, which might result in a possible judgment debt against the government. He says the government is not taking over a mining concession with an active lease. Rather, it has just taken ownership of a concession whose lease has expired and has automatically reverted to the state as stated by law.
He further notes that even the application of Gold Fields for a renewal of lease is an admission of an expired licence.
“If the government had taken any other action while the lease was active, then it would have amounted to unnecessary interference. The question we should ask ourselves is whether the lease has lapsed,” he noted.
“Gold Fields concedes that it has lapsed and that is why it needs a renewal. Do you need to renew something that is not lapsed? Then, at that point, you will need an extension. You will negotiate for an extension,” he argued.
The Latest Development
After initially rejecting the renewal application, the government and Gold Fields, in a latest development, have reached an amicable resolution. The government has granted Gold Fields just a 12-month lease to be used as a transition, after which the mine will be transferred to Ghanaian ownership.
The latest development buttresses Dr. Kwabena Donkor’s position that the government is not seeking to nationalise the resources but rather ensure significant local participation in the extractive sector.
The Bottomline
As the government, through President Mahama, announced plans to roll out broader policies on indigenous participation in natural resources, experts like Dr. Kwabena Donkor are calling for a fact-based conversation.
His insights challenge the narrative of nationalisation and instead frame the government’s approach as a legitimate bid to secure greater long-term value from Ghana’s mineral wealth.
