Gold Fields and AngloGold Ashanti’s plan to merge their Tarkwa and Iduapriem gold mines in Ghana has stalled due to delays in securing the necessary government permits.
Both companies have confirmed that the required approvals remain outstanding, which is hindering the progress of the joint venture.
The collaboration, initially announced in March 2023, was designed to create Africa’s largest gold mine, with Gold Fields taking a 60% stake, AngloGold Ashanti 30%, and the Ghanaian government 10%.
However, in a joint statement released on Thursday, the companies expressed their disappointment over the inability to secure the necessary permits before Ghana’s national elections in December.
The statement emphasized that both companies still believe the merger is a valuable opportunity, highlighting its potential to extend the life of the mines, boost production, and reduce costs, which would ultimately benefit all involved parties.
Due to the lack of clarity on the approval process, the two companies will continue to independently improve their respective assets while keeping discussions open for a future merger.
They had hoped to secure the required approvals by October 2024, prior to the parliamentary recess, but without clear timelines, they will now focus on individual improvements.
“We continue to believe that a combination of the two neighbouring mines into a single managed entity is compelling, given that it is anticipated to extend life of mine, increase production, and lower costs, creating value for all stakeholders,” they stated.
The merger, which was expected to produce an average of 900,000 ounces of gold annually over the first five years and 600,000 ounces over its 18-year life, now faces uncertainty.
“Notwithstanding constructive engagement with the Government of Ghana since the announcement of the Proposed Joint Venture on 16 March 2023, the requisite approvals by the Government of Ghana for the Proposed Joint Venture have not yet been obtained,” the statement said.
“Gold Fields and AngloGold Ashanti have sought to secure the requisite approvals, which include approval of the Proposed Joint Venture by the Parliament of Ghana, ahead of the October 2024 Parliamentary recess before the Ghana national elections to be held in December 2024.
“The Parties continue to believe that a combination of the two neighbouring mines into a single managed entity is compelling, given that it is anticipated to extend life of mine, increase production and lower costs, creating value for all stakeholders.
“In the absence of the requisite approvals from the Government of Ghana and clear timelines for execution of an agreement, Gold Fields and AngloGold Ashanti will maintain engagement in relation to a potential asset combination while separately continuing to pursue improvements to their respective assets”.
Both Gold Fields and AngloGold Ashanti have increasingly shifted their focus from their traditional South African base to international markets, including Ghana, Australia, and the Americas.
This strategic shift is driven by the growing challenges of gold extraction in South Africa, where deep and complex geology makes mining more expensive and difficult.