South African Gold Fields may scrap USD 700mn Ghana investment on higher taxes.

By bne IntelliNews December 7, 2011
South African miner Gold Fields will be unable to complete a planned USD 700mn investment in expansion of its Damang gold mine in Ghana if the countrys government fulfils its proposal to raise corporate taxes, Business Daily reported quoting the companys head of growth and international projects Tommy McKeith. Ghanas 2012 draft budget revealed last month that the corporate mining tax is planned to be raised to 35% from 25%, and a 10% windfall tax on mining companies will be also introduced. Companies would be allowed to write down 20% of capital spending each year for five years, compared with an 80% write-down on taxable income in the first year now. "The changes in the Damang tax rate do affect this project significantly," McKeith was quoted as saying. "If there are changes in the tax rate, we certainly will not be going ahead with this project in its current form." Gold Fields Damang Super-Pit project is aimed to enlarge the existing opencast mine and go deeper to reach unexploited ore with the goal of doubling output to about 500,000 ounces a year. The Super-Pit will add 4-million ounces to Damangs resources. Gold Fields also has a large expansion plan for its Tarkwa mine in Ghana, which could bring the total investments in the country to USD 1bn. Gold Fields plans an overall investment of USD 3.15bn to USD 5.15bn in its operations in Ghana, Mali, South Africa, South America and Australasia to boost its total annual production capacity to 5 million ounces by 2015 from 3.5 million ounces now.

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