Ivory Coast miners start paying higher royalties after failed resistance, sources say

Miners initially resisted, citing contract protections against fiscal changes West African states increase fiscal pressure amid rising commodity prices Gold prices surge over 65% this year, influencing royalty rate adjustments By Maxwell Akalaare Adombila ACCRA, Dec 16 (Reuters) - Gold mining companies in Ivory Coast have begun paying a new 8% royalty on revenue, backdated to January, after months of disputing the legality of the levy, three industry sources told Reuters. Reuters previously reported that the world’s top cocoa producer, which is seeking to diversify its economy, replaced the previous 3% to 6% range linked to contract terms with the flat 8% rate. Miners initially refused to pay, arguing that the move was unlawful because their contracts shielded them from fiscal changes and entered negotiations with the government to have the new royalty scrapped. However, companies have since started paying after the government refused to change its position, said the three people familiar with the matter, who declined to be named because they were not authorised to speak to the media. “Everyone has now agreed to pay – the question is whether penalties apply,” said one executive, adding that firms were rushing to settle to avoid fines. Ivory Coast’s mines chamber and its mines and finance ministries did not immediately respond to requests for comment. David Whittle, West Africa chief operating officer at Fortuna Mining (FVI.TO) , confirmed compliance. “We’ve made our payments of 8%, backdated from when it was introduced. We didn’t see negotiations heading anywhere,” he said. “The gold price has taken care of it,” Whittle said, referring to its roughly 65% rally this year. Key mining companies in Ivory Coast include Perseus Mining (PRU.AX) , Endeavour Mining (EDV.L) , Fortuna, Allied Gold (AAUC.TO) , and newcomers like Montage Gold (MAU.TO) . As gold and other commodity prices surge, West African states have been increasing fiscal pressure on miners, straining relations with operators, who warn the measures could curb investment. While military-led Guinea, Mali, Niger and Burkina Faso are taking direct steps, such as revoking licenses or seizing assets, to extract concessions from operators, other countries such as Ghana and the Ivory Coast have been introducing new laws and levies to boost state revenues.