* CEO says Ghana tax changes "big concern"
* $1 bln project pipeline at risk in Ghana
* Wave of resource nationalism sweeping Africa
(Recasts, adds quotes, details)
By Ed Stoddard
JOHANNESBURG, Dec 5 Gold Fields
Chief Executive Nick Holland said planned projects that could
bring $1 billion in investment to Ghana were at risk because of
looming tax changes outlined in the west African nation's budget
Ghana's government plans to raise the corporate mining tax
to 35 percent from 25 percent and introduce a 10 percent
windfall tax as well.
Holland's comments at a presentation to investors on Monday
were the strongest to date by a mining company on the issue and
came amidst a wave of resource nationalism across Africa. Gold
Fields is the world's fourth-largest gold producer and regards
west Africa as key to its global growth strategy.
In response to a question about planned expansion of the
group's Damang operation, Holland said:
"The tax situation is a big concern to us, and frankly
unless we are going to see some flexibility on the tax
situation, I don't think we will be building the project in the
form that is being described today, if at all," he said.
The miner also has a major expansion planned for its Tarkwa
Holland said a $1 billion project pipeline in Ghana was now
"Both of those projects represent incremental investment of
$1 billion into the country ... There needs to be a better
dispensation for us to proceed," he said.
UNFAIR PLAYING FIELD
Holland also said the playing field in Ghana was unfair.
"There isn't a level playing field on taxes and royalties.
We are paying higher royalties than the other major producers in
that country. That's not sustainable," he said.
"And we will be subject to these taxes despite the fact that
we have had a stability agreement in draft form with the
government for many years. So that's also not sustainable. There
has to be a level playing field created," he said.
Holland said company executives visited Ghana last Thursday
to raise their concerns and that the government had agreed to
enter a dialogue with Gold Fields.
Peet van Schalkwyk, the company's head of the west Africa
region, earlier said talks had been promising.
But there is uncertainty in other areas, and he said in his
presentation that there was still no mechanism to work out how
the windfall tax would be imposed.
Other mineral-rich African states that have recently raised
mining taxes or royalties include the region's top copper
producer Zambia and Zimbabwe, which has the second-largest known
platinum reserves in the world.
Several analysts have said the wave of resource nationalism,
which coincides with sky-high commodity prices, is one of the
biggest political risks to the mining sector.
For Gold Fields the stakes are high.
In 2010 about 20 percent of the company's production of
around 3.5 million ounces came from Ghana, and that percentage
is rising as it has since bought out minority stakes in its
The group is targeting an increase in its output in west
Africa to 1.25 million ounces in 2015 from just under 1 million
now, making the region key to its goal of raising the amount in
development or production to 5 million ounces by 2015.
(editing by Jane Baird)