On paper concluding a proposed joint venture in Ghana with AngloGold Ashanti looks like an early ‘easy win’ for Mike Fraser in his first few months as CEO of Gold Fields. He acknowledges, however, a final agreement could be complicated by elections in the West African country.
The joint venture, which was announced ten months ago, sees Gold Fields ‘merge’ its Tarkwa mine with neighbouring Iduapriem, an AngloGold mine. As a single mining complex, the mines would produce 600,000 ounces a year.
Dropping farm boundaries between the two properties is a more efficient use of gold resources, extending the mine life of the complex beyond the life either mine could achieve single-handedly.
Gold Fields will control the joint venture (60%) with the parties offering a 10% share to Ghana. The government has a 10% stake in Tarkwa currently. AngloGold owns 100% of Iduapriem.
While Fraser is confident a deal will be cut, he acknowledged in an interview this month that politics may have an influence on discussions. “What is a little bit difficult is that it’s an election year in Ghana and as you get closer to that decisions become politicised and people get more reluctant,” said Fraser. “We will continue to progress it with the government. I think there is general support for it but it’s how to get an agreement that makes sense and is equitable for everyone.”
The Ghanaian government is under huge pressure after defaulting on $20bn in international bonds and loans in 2022. While the International Monetary Fund agreed this month to a $600m second tranche as part of a three-year bailout programme, Ghana has to prove it can keep spending in check. All in all, the government is revamping some $47bn in debt, according to a report by Bloomberg News
