Arbitration remains an option for Gold Fields in the dispute over the Damang mine
International arbitration remains an option for Gold Fields in its dispute with the Ghanaian government over retaining the Damang gold mine lease, but it is an “option of last resort,” according to Gold Fields investor relations vice-president Thomas Mengel.That cautious response to the Ghanaian government’s action in kicking Gold Fields off the Damang lease is despite the fact Gold Fields could forego considerable income through losing the mine even though it has stopped mining there.Gold Fields halted mining operations at Damang because “the remaining metal no longer meets reserve economic criteria under Gold Fields conservative gold pricing approach” according to the 2024 Mineral Resources and Mineral Reserves supplement. It is currently only treating surface ore stockpiles.But the mine still hosts a major gold resource totalling 2,27m oz which could be mined in the future at higher gold prices while, alternatively, Gold Fields could sell Damang to another operator if it retained control of the lease area.The possibility of a such a sale was raised by Gold Fields CEO Mike Fraser in November last year when he commented, “if we decide to sell it to someone else, we would have sold it with an embedded option for life extension.”Accessing those resources would require a “cut back” of the wall of the current open pit mining operation which Gold Fields has decided not to do at this stage although it noted, “a cut back project remains viable and is retained within the Mineral Resource.”Gold Fields invested $1.4bn in Damang from 2017 to 2024 to extend the life of the mine. An analyst noted that, while the group can easily relocate its fleet of opencast mining equipment from the mine by April 18 – as demanded by Government – the future of the processing plant at the mine is a major issue.Mengel said Gold Fields was “trying to engage with the Ghanaian president over the next few days” regarding the government’s decision to remove the company from the Damang lease area.He added there were a number of avenues the company could follow in further discussions including mediation.“We do not want to be perceived as being aggressive or making threats. This is a delicate situation where we are dealing with a newly elected government which has only been in place for three months,” Mengel commented.Gold Fields had applied for an extension of the Damang lease which was turned down. According to the recently published annual report “our application was in accordance with the applicable law” and Mengel commented the group believed the extension should have been granted.The statement released yesterday by Gold Fields said, “Gold Fields has engaged extensively with the relevant authorities since receiving the rejection notice to confirm that its Lease extension application has fulfilled all the statutory requirements for such extension.”Mengel added that amongst Gold Fields’ concerns for Damang was the future of the 1,500 workers at the mine and the local community which depended on it.Asked about any impact on the discussions underway with the Ghanaian Government on the proposed Tarkwa/Iduapriem merger Mengel replied that, “we have not stopped discussions with Government on Tarkwa/Iduapriem but, in the near term, our focus is now on Damang.”The post Arbitration remains an option for Gold Fields in the dispute over the Damang mine appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com
Quelle: Mining.com
