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THE REPUBLIC OF GHANA



and

ANGLOGOLD ASHANTI (GHANA) LIMITED



TAX CONCESSION AGREEMENT



FOR THE



OBUASI MINE REDEVELOPMENT



Contents

Clause



Page



1



Definitions and interpretation ......................................................................................................... 1



2



Conditions and Effective Date ....................................................................................................... 2



3



Fiscal concessions ......................................................................................................................... 2



4



Periodic review .............................................................................................................................. 5 •



5



Dispute resolution .......................................................................................................................... 6



APPENDIX A IMPORT DUTY LIST .......................•................................................................................. 8



THIS AGREEMENT is dated



(1)



.~t/JJ... / .........,2017 and made between:



THE REPUBLIC OF GHANA, represented by the Minister of Finance and the Minister of Lands



and Natural Resources (hereinafter referred to as the Government); and

(2)



ANGLOGOLD ASHANTI (GHANA) LIMITED, a company with limited liability established under



the laws of Ghana (hereinafter referred to as AGAG).

BACKGROUND



(A)



On or about the date hereof the Government and AGAG have entered into a development

agreement under the Minerals and Mining Act, 2006 (Development Agreement) in relation to

the redevelopment of the Obuasi Mine (Redevelopment).



(B)



The Parties agree that AGAG intends to make significant investments to redevelop the Obuasi

Mine and therefore the Government agrees to give AGAG these fiscal concessions to support the

redevelopment of the Mine.



THE PARTIES AGREE AS FOLLOWS:



1

1.1



Definitions and interpretation

Except as set out below, capitalised terms have the meaning given to them in the Development

Agreement. The following terms wherever used in this Agreement shall have the respective

meanings set forth below:

Agreement means this tax concession agreement

Concession Period means the period from the Effective Date to 31 December 2027

Effective Date means the date described in Section 2

Import Duty List has the meaning given in Section 3.1(c)(i)

Income Tax Act means the Income Tax Act, 2015 (Act 896), as amended

Initial Period means the period from the Effective Date to 31 December 2023

Minister means the Minister of Finance

Minister for Mines means the Minister responsible for Mines

VAT Act means the Value Added Tax Act, 2013 (Act 870), as amended.



1.2



Headings to the clauses and sections of this Agreement are inserted for convenience only and

shall not affect its construction.



1.3



Unless otherwise stated:

(a)



a reference to "hereof', "hereunder", "herein" or words of similar meaning, means this

Agreement and its appendices;



2



(b)



the words "and" "and/or" includes the conjunctive and disjunctive, as the context may



(c)



the word "include" (and any variation of that word) means including but not limited to.



Conditions and Effective Date

This Agreement shall come into full force and effect on the date on which the resolution approving

these concessions is passed by Parliament in accordance with Article 174(2) of the Constitution

(Effective Date).



3

3.1



Fiscal concessions

Save as provided below, from the Effective Date, the tax laws in Ghana shall apply save as

provided by the stability provisions in the Development Agreement. Pursuant to the powers of

Parliament to waive or vary a tax imposed the following fiscal concessions shall be granted.

(a)



Corporate Income Tax

(i)



The rate of corporate income tax applicable to the taxable income of AGAG

and derived from its Operations shall be thirty two and a half per cent (32.5%)

or such lower rate as is set by Law.



(ii)



Unutilised capital allowances carried forward by AGAG which relate to the

period before the Effective Date which have not already been utilised for the

purposes of calculating taxable income shall continue to be carried forward

until 31 December 2020 as unutilised capital allowances carried forward and

from 1 January 2021 any such unutilised capital allowances shall be treated

in accordance with applicable law as at the date of this Agreement.



(iii)



During the Concession Period, existing tax losses and new tax losses as well

as a special concession to carry forward capital allowances to be converted

into tax losses as at end 2020, will apply to AGAG, whoever is the owner of

AGAG and whether or not AGAG was to enter into a joint venture in respect

of the Obuasi Mine.



2



(b)



Withholding Tax (WHT)

During the Concession Period any interest chargeable on intra-group loans will be

subject to WHT at the time payment is due at 8% or such lower rate as is set by Law.



(c)



Import Duties

(i)



AGAG shall, from and including the Effective Date until the end of the Initial

Period be exempt from import duties on the import of those items listed in

Appendix A (the Import Duty List) and imported tor the purposes of, and used

exclusively in, Operations of the Obuasi Mine.



(ii)



Where, as a result of changes in Operations, AGAG needs to import an item

for use in operations which is not contained in the Import Duty List, AGAG

shall make a representation to the Minister for Mines as to why it wishes to

import such item for the purposes of its operations and why it should be

exempt from customs import duties. In that event the Minister for Mines may

forward the request to the Minister, for consideration and, if approved, shall

grant such exemption.



(iii)



Where AGAG intends to import any items that are to be re-exported beyond

the period prescribed by law, AGAG may apply to the Minister for an extension

based on conditions to be agreed to by the Minister.



(d)



Treatment of Disposal of Mineral Rights

For purposes of section 83(2) of the Income Tax Act, where there is change in the

underlying ownership of AGAG any consideration deemed received will only apply

to the portion attributable to AGAG. In addition during the Concession Period section

83(2) of the Income Tax Act will apply to AGAG where there is a change in underlying

ownership save for the following transactions:

(A)



an issue of shares by a publicly listed company which holds a direct or indirect

interest in AGAG in connection with a raising of finance, an acquisition or a

reorganisation or an issue of shares by a company in connection with a new

listing;



(B)



transfers of shares in any publicly listed company which holds a direct or

indirect interest in AGAG other than a transfer of shares which results in a

third party holding more than thirty five per cent (35%) of the shares in the

listed company; and



3



(C)



a reorganisation of a company which holds a direct or indirect interest in

AGAG where following the reorganisation the shareholders are substantially

similar to those shareholders of the ultimate parent entity immediately prior to

the transaction.



(e)



Change in ownership

In the event of a transaction to which section 62(1) applies, in ascertaining the

chargeable income of AGAG in terms of the Income Tax Act an amount resulting

from a deemed realisation under section 62(1) of the Income Tax Act shall not

include a deemed realisation of a mineral right where section 83(2) of the Income

Tax Act has already been applied to that transaction.

During the Concession Period section 62(1) of the Income Tax Act will apply to

AGAG where there is a change in underlying ownership save for the following

transactions:

(A)



a joint venture in relation to Obuasi;



(B)



an issue of shares by a publicly listed company which holds a direct or indirect

interest in AGAG in connection with a raising of finance, an acquisition or a

reorganisation or an issue of shares by a company in connection with a new

listing;



(C)



transfers of shares in any publicly listed company which holds a direct or

indirect interest in AGAG other than a transfer of shares which results in a

third party holding more than fifty per cent (50%) of the shares in the listed

company; and



(D)



a reorganisation of a company which holds a direct or indirect interest in

AGAG where following the reorganisation the shareholders are substantially

similar to those shareholders of the ultimate parent entity immediately prior to

the transaction.



(f)



Royalty

(i)



For the Concession Period, AGAG shall pay to the Government in Dollars a

royalty at the royalty rate determined by applying the percentage rates set out

in the right hand column of the table below, being rates set by reference to the

level of gold price (as set out in the left hand column of the table below)

applicable to the relevant portion of the Minerals sold at the relevant price, for

each calendar month:



4



Gold



price



determined



per



by



ounce

the



as



Percentage rate



London



Bullion Market Association



(ii)



Up to US$1 ,300



3%



US$1 ,300 to US$1,449.99



3.5%



US$1,450 to US$1749.99



4%



US$1 ,750 to US$1,999.99



4.5%



US$2,000 and above



5%



For the purposes of Section 3.1(f)(i), the price for determining the applicable

royalty rate on the sliding scale shall be the average of the quoted gold price

on the daily London Bullion Market Association {LBMA) Gold price for each

calendar month with respect to the sales of gold during such month. Should

the LBMA Gold price cease to exist, then the Parties shall choose an

alternative market index.



(g)



Value-Added Tax

(i)



From and including the Effective Date until and including 31 December 2023,

AGAG shall be exempt from the payment of Value-Added Tax (VAT) on the

import of goods listed in the Import Duty List and purchased for the purposes

of operations of the Obuasi Mine.



(ii)



Prior to production during the Initial Period, AGAG shall be entitled to a refund

of VAT credit in terms of section 50( 1) of the VAT Act notwithstanding that

AGAG may not have made any exports and following the commencement of

exports AGAG shall continue for the remainder of the Concession Period to

be entitled to the refund of VAT credit so long as AGAG is in compliance with

the threshold for repatriation of proceeds as set out in the Development

Agreement.



4



Periodic review

Each Party may at any time request a consultation with the other Party with respect to any matter

affecting the rights and obligations of the Parties relating to these concessions. The Parties shall

meet to review the matter raised as soon after such request as shall be reasonably convenient



5



for them both. Subsequent to the consultation, the Parties shall take the action, if any, that is

mutually agreed to address the matter.



5

5.1



Dispute resolution

In the event of any controversy or claim arising out of or related to this agreement, or a breach

thereof, the parties here to agree first to try and settle the dispute by mediation under the

mediation rules in the Alternate Dispute Resolution Act of Ghana 201 0 (Act 798).



5.2



If settlement Is not reached within sixty (60) days after service of written demand for mediation,

any unresolved controversy or claim arising out of or related to this agreement shall be settled by

arbitration under the UNCITRAL Rules of Arbitration.



5.3



The following shall also apply:

(a)



The number of arbitrators shall be three (3); one (1) arbitrator to be appointed by each

party, and a third, presiding, arbitrator appointed by the two party-appointed

arbitrators.



5.4



(b)



The seat, or legal place of arbitration shall be Accra, Ghana.



(c)



The language to be used in the arbitral proceedings shall be English.



(d)



The governing law shall be the laws of Ghana.



(e)



The venue of the arbitration shall be Accra.



To the extent permitted by Law, each of the Parties hereby irrevocably and unconditionally

consents generally in respect of the enforcement and/or execution of any judgment or arbitral

award rendered in accordance with the dispute resolution procedures set out in this Agreement

except Protected Assets in the case of the Government. Notwithstanding the foregoing, the

parties agree that the Government does not hereby waive immunity from execution or attachment

in respect of (i) property used by its diplomatic or consular missions wherever located, (ii) property

of a military character and under control of a military authority or defence agency of the

Government wherever located, (iii) assets protected under the Petroleum Revenue Management

Act, 2011 (Act 815) of the Republic of Ghana, (iv) property located in the Republic of Ghana and

dedicated to public or governmental use (as distinct from property dedicated to commercial use)

and (v) non-commercial cargo belonging to the Republic of Ghana (the "Protected Assets").



6



IN WITNESS WHEREOF, the Parties have signed this Agreement, through their respective duly

authorised representatives, on the day, month and year indicated below.



,,



SIGNED by the GOVERNMENT OF THE

REPUBLIC OF GHANA acting by each of



.I



the Minister of Lands and Natural Resources

and

tho Minister of Finance



MINISTRY OF FINANCE 'l

DEPUTY MINISTER ( R)



in the presence of



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GO



ASHANTI (GH,) LTD,



SIGNED by

ANGLOGOLD ASHANTI (GHANA) LIMITED



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MANAGING DIRECTOR



acting by its Managing Director



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and



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a Director



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in the presence of



7



. J.....MANA-g.~ ~............... .