AngloGold Ashanti (NYSE:AU) and Newmont (NYSE:NEM) will not be immediately affected by the increase in royalties from Ghana, the second-largest gold producer in Africa, behind South Africa.
Royalties for other gold miners in the country have been increased from 3 percent to 6 percent, with some like AngloGold Ashanti and Newmont Mining receiving temporary exemptions.
Gold production in Ghana stood at 2.9 million ounces in 2009, with gold prices increasing from $930 at the end of 2008 to $1,100 at the end of 2009, a 11.5 percent rise.
Ghana Chamber of Mines Chief Executive Joyce Aryee said this to Reuters about the situation, "Ghana does not have all the infrastructure in place ... so the government signed such stability agreements with the mines to promote their investment and also to ensure that too many goal posts will not be changed too quickly."
It's unclear as to how long AngloGold Ashanti and Newmont Mining will be exempt from the increased royalties, as official stated the stability agreement is under review in order to see if the exemptions need to be changed in any way.
I haven't heard anything, but I'm sure their competitors are putting pressure on Ghana officials to change the exemptions.
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