Gold Fields recognised for its contribution to the Ghanaian economy

In February 2013, the Ghana Revenue Authority (GRA) presented Gold Fields with the ‘Best Tax Payer Award’ at its annual awards ceremony in the Ghanaian capital, Accra. The awards recognise corporate institutions for their significant contributions to government revenues through their payment of taxes. In 2012, Gold Fields contributed around US$250 million to government revenues in the form of taxes, dividend payments and royalties.

Gold Fields impact on broad-based economic development in Ghana far exceeds its direct contributions to government revenues. For example, Gold Fields is the largest private sector employer in the country – providing direct employment to 5,300 people and creating indirect employment for 83,000. In addition, Gold Fields makes a substantial contribution to socio-economic development through targeted investment in education, health, agriculture, water and sanitation, and general infrastructure. In 2012 alone, Gold Fields invested approximately US$3.2 million in such initiatives.

However, during 2012, the government imposed a range of additional fiscal imposts on the mining sector that have made Ghana one of the more expensive mining jurisdictions to operate in. This included, among other measures, raising Corporate Income Tax from 25% to 35%. Additional fiscal measures were also implemented in 2011, including an increase in mining royalties from 3% to 5% of revenues. Other taxes that are being mooted include a Windfall Profit Tax. This is currently being reviewed by a Mining Review Committee, which is looking at overall mining policy for Ghana, including tax stability agreements.

The new tax burden does not fall on the sector equally – with other major mining operators in the country enjoying the protection of stability agreements. Gold Fields believes it is important that all mining companies in Ghana enjoy a level fiscal playing field. To this end, we are actively engaging with the government via the Chamber of Mines to promote an equitable, country-wide stability agreement – as well as seeking further assurance around the stability of our specific fiscal arrangements. Pending a mutually beneficial outcome to this engagement, we will review expansion plans for our two mines in the country, Tarkwa and Damang to extend the lives of these strategically important assets. As well as supporting the cash generation objectives of the Group, this will enable us to maintain our position as one of the top contributors to broad-based economic development in Ghana.