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Ghana: Key Factors to Consider by International Purchasers in Gold Export Transactions.

By September 15, 2021No Comments


According to data from the Ghana Chamber of Mines, gold export revenue rose from USD6.229billion in 2019 to USD6.799billion in 2020. The data further alludes to the fact that the 9.1 per cent upswing of the gold was largely an outcome of the bullish traded price of the yellow metal, which was sufficient to offset the downturn in its export volume.

At the same time, the data demonstrate that the purchases and export of the yellow metal (gold) by the Licensed Gold Export Companies (LGEC’s), which is used as a proxy for production by small-scale sector, nosedive by 26 per cent. The gold output of small-scale producers decreased from 1.588 million ounces in 2019 to 1.175 million ounces in 2020 due mainly to reasons linked to the restrictions in mobility induced by COVID-19 challenges in accessing excavators and other inputs, as well as the introduction of withholding tax on the output of small-scale miners at the point of export.

Overall, the data concludes that the volume of gold produced by the country plummeted from 4.577 million ounces in 2019 to 4.023 million ounces in 2020.

It is, however, not a sign of the dwindling of the natural resources. Instead, it is an influencing factor-like COVID 19 and the 3% withholding taxes imposition. In essence, the data demonstrates that international traders desirous of doing business shall have at their disposal millions of ounces of gold for purchase and export to their chosen destination through LGEC’s.

With stringent government policies to curve COVID-19 and other incentives to boost small-scale mining, it is estimated that the yellow metal shall see a significant increment in the near future.

Therefore, the question remains. What are the key indicators or factors to consider by international traders who seek to engage an LGEC to buy, sell and export the yellow metal in Ghana?



Identifying an LGEC requires undertaking comprehensive due diligence. Due diligence is the level of care or judgment exercised before establishing a commercial relationship. It involves a comprehensive appraisal to deal with all risks associated with the target company (in this case, an LGEC).

An investor who identifies an LGEC or in the alternative seeks to identify an LGEC to transact with must hire the services of an expert company to conduct due diligence on the target company. Therefore, hiring an expert in the industry is essential. The expert will identify risks associated with the intended trade and profess a piece of advice or a solution to avoid such risks. Most often, most international traders seek the services of an industry expert to conduct due diligence after they have been duped or scammed millions of Dollars (USD). In essence, the undertaking of due diligence is crucial. It will help identify impediments to closing the transaction and ultimately aid in the drafting of the relevant legal documents.

Therefore, we implore all foreign entities to do their best to involve an expert in their transactions to buy and export the yellow metal.


International traders must identify which payment mechanism mitigates losses and, most importantly, is feasible depending on the due diligence outcome. The outcome of the due diligence is fundamental as it is tied ultimately to the knots of other essential decisions fundamental to the sustenance of the successful implementation of the transaction. Essentially, the accepted model of payment shall depend on the outcome of the due diligence and the exposure to the associated risks.

Generally speaking, the following mode of payment are available to foreign traders:

  1. TT Wire Transfer (MT-103) to the LGEC
  2. Payment via SBLC
  3. Trust Account payment with a third party (usually the expert company secured for the due diligence.
  4. Escrow Account payment mode (usually, the international trader opens an account with the sellers’ bankers and issues instructions for payment upon satisfactory evidence of assay report from the seller.)

Whichever payment method is adopted, an international trader must secure the advice of an expert.


It is significant in most cases to have appointed experts conduct due diligence and oversee the successful transaction implementation at all material times. In most cases, the expert’s role is to checklist the LGEC to ensure that the critical agreed term in the SPA is always adhered and or fulfilled. Also, during the transaction phase of the agreement, the expert third party shall undertake continuous due diligence, identifying unintended risks associated with the business and recommending a timeous solution to mitigate losses on the part of the international trader. Finally, the international trader can use the expert third party to hold the funds intended for the seller and make payments only on the fulfilment of the agreed terms of the SPA.


i. Export Procedure:

The export procedure for the shipment of gold are summarized below:

  1. A Licensed Gold Exporter (LGE) who intends to export gold shall inform the Precious Minerals Marketing Company Limited (PMMC) in writing of its export plans at least two (2) working days before the planned weekly export.
  2. The LGE shall submit the gold ore to be assayed by PMMC at a designated assay centre, together with all declaration documents, Packing List, and Invoice.
  3. The PMMC shall determine the gold content of the gold ore presented by the LGE using the appropriate assay method as agreed by the LGEs, Minerals Commission, and the PMMC.
  4. The PMMC shall prepare a report of analysis of the gold ore presented by the LGE and issue copies instantly to the Bank of Ghana (BOG), the Ghana Revenue Authority Custom Officer stationed at the Assay Centre and the Minerals Commission.
  5. The PMMC shall invoice the LGE in respect of the assay at the agreed rate of 0.1% of the value of gold assayed, and the LGE shall pay the same to PMMC. The payment of this fee is without prejudice to any fee that may be charged by the Minerals Commission.
  6. All Gold Buying Agents of the PMMC, before this publication, may continue to use their permits until the expiry of the present term of the license, and the PMMC shall not renew the same upon expiry. All such Gold Buying Agents should immediately contact the Minerals Commission for further directions regarding the use of their permits. All persons who desire to obtain licenses for buying gold shall apply to the Minerals Commission.
  7. The GRA Customs Official at the Assay Centre shall inspect and supervise the sealing of the assayed gold ore with the Customs Division’s seal and endorse the Customs Declaration Form. The sealing of the assayed gold ore by the Customs Official shall be done in the presence of an authorized representative of the Assay Centre, who shall also affix the seal of the PMMC Assay Centre at the same time.
  8. The LGE shall complete the required documentation at the Kotoka International Airport (KIA) before exporting the assayed gold.
  9. Under no condition shall gold ore be exported by LGE without the seals of the Customs Division of the Ghana Revenue Authority and the Government designated laboratory, i.e., PMMC, and accompanied with full documentation.
  10. All LGEs shall submit monthly returns to the Minerals Commission in accordance with the terms and conditions of their license agreements.

ii. Minerals Commission

The Minerals Commission, consistent with its constitutional mandate, continues to promote, regulate, and monitor mining activities in the country to enhance the contribution of the mining sector to national development. The Minerals Commission of Ghana is responsible for issuing permits and licenses to gold export companies in Ghana. They have the responsibility to ensure that:

  1. All gold exported by LGEC’s are done under the stipulated requirements.
  2. All LGEC’s in the industry file their monthly returns as demanded by the law.

iii. Precious Minerals and Marketing Company (PMMC)

PMMC is the Government of Ghana (GOG) official agency placed or charged for checking and assaying gold before its export by LEGC’s at the port of exit. Therefore, before the gold is sealed and handed over to the GRA-Customs Division at the airport, PMMC, which acts as a national assayer, is expected to have assayed all the quantities meant for shipment. The assay processes must be done before finally the airline airlifts the gold to its destination. It must be stressed that PMMC is not clothed with the jurisdiction to issue licenses and permits in Ghana to LGEC’s. The issuance of such license is within the jurisdiction and or the reserve of the Minerals Commission of Ghana.

iv. Bank of Ghana (BoG)

The role of the Central Bank (BoG) in gold export in Ghana is to monitor and ensure that all remittances and foreign exchange incidental to the export of gold by the LGEC’s are received by LGEC’s through their local banks. Their work is fundamental as they assist the government to have the full record or data on foreign exchange earnings related to gold export transactions in Ghana. Importantly, they ensure that LGEC’s do not use their license to engage in money laundering and suspicious transactions, working closely with the Financial Intelligence Centre (FIC). Data from the Ghana Chamber of Mines confirms that the lender of last resort, that is from the BoG, demonstrates that the mining sector consolidated its pride of place as the foremost source of forex from export receipts in 2020. The proceeds from the export of minerals increased from USD6.678billion in 2019 to USD6.998billion in 2020, representing a growth rate of 4.8 per cent. The upturn in mineral export revenue was driven primarily by the expansion in receipts from the export of gold and bauxite, which counterbalanced the decline in export proceeds from manganese and diamond.

Due to the foregoing, the Central Bank (BoG) determines that the international traders seeking to transact or purchase gold sends 80% of the gold value as determined by the law to the LGEC. This, in essence, enables the LGEC to meet its monthly filings with the Minerals Commission.

v. Ghana National Chamber of Commerce and Industry

The Ghana National Chamber of Commerce and Industry role is crucial in the export of yellow metals. The Chamber issues documentary evidence of origin for goods exported from Ghana. In addition, it certifies a variety of export documentation, for example, packing lists, commercial invoices, proforma Invoices, etc., as required by overseas buyers and foreign customs authorities.

vi. Ghana Revenue Authority (GRA)- Customs Division

The Custom Division of the Ghana Revenue Authority (GRA) oversees revenue mobilization and ensures that the appropriate taxes are paid by LGEC’s. They work in conjunction with the Central Bank (BoG) through the Ministry of Finance to make sure that:

  1. All taxes on gold export are paid by the LGEC’s as demanded by law
  2. The government keep track to ensure that all foreign remittances incidental to export shipment are received.
  3. LGEC’s do not utilize their license to facilitate money laundering
  4. Finally, to ensure that all LGEC’s accounts for at least 80% of the value for gold exported at any point in time.

vii.       Export Taxes

LGEC’s are by law expected and or mandated to adhere to their tax obligations for every intended shipment. The incidental tax component for every shipment includes the following:

  1. Withholding Tax:                           3%
  2. PMMC Charges (for assay):     0.18%
  3. Mineral Commission:                   0.20%
  4. Processing charges:                       0.15%
  5. Logistics and Airline:                    0.25%

Total:                                                               3.78%

The total tax component as calculated above excludes insurance, which is an option to be exercised by the international trader. The above taxes are the responsibility of the LGEC and no other entity. As such, international traders must ensure that they deal directly with LGEC’s. Most appropriately, all payments for the commodity (gold) are made to LGEC’s in fulfilment or receipts of 80% of the value of shipment under an executed contract (SPA).


We understand that international traders negotiate for a discount on a gold purchase transaction with LGEC’s at all material times. It is the considered opinion of the writer of this article that negotiated discount must take into consideration the following factors:

  1. The total tax component as calculated should be considered and factored into any negotiation
  2. That LGEC’s are not miners. In principle, they are intermediary companies existing between international traders and small-scale miners. They exist to make profits, as well as, meeting their legitimate tax obligations. As such, a huge discount is a pointer for a botched transaction, ultimately. For a successful transaction, international traders are admonished to be reasonable in the discount they seek.

In all phases of the transaction, international traders are implored to engage the services of experts to undertake the following:

  1. Legal due diligence; and
  2. Performance due diligence on the target company.

The end effect of the two is to understand better the following outlined:

  1. The export history and creditworthiness of the target company.
  2. The legal standing of the company to buy, sell and export gold in Ghana.
  3. Inform the necessary payment method to adopt and aid in the drafting of the relevant documentation for the transaction.
  4. Identifying the legitimate pitfalls for the transaction and how to cushion the international trader against such impediments that may derail the successful implementation of the SPA.


The importance of due diligence and hiring an expert cannot be understated in a gold export transaction. Effectively executed due diligence shall inure to the mutual benefits of all.

Why have a botched transaction when you can rely on the services of an industry expert to achieve maximum results?

Legal Notice

The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your circumstances should always be sought separately before acting based on this publication.

© Legalstone Solicitors LLP

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