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GHANA: Ghana's gold inflicts heavy price

by James HaselipPeople and the Planet
December 6th, 2006

Gold mining is Ghana�s most valuable export industry: in 2005, US$1.4 billion worth of gold was shipped from the country, dwarfing the value of its other major foreign currency earners - timber and cocoa. However, very little of the gold revenues stay in the country while damage to the physical environment by both large and small-scale mining is inflicting an incalculable cost to the economy with vast tracts of farming land permanently ruined, forests destroyed and water resources diverted and polluted.

The reasons are typical: despite almost 50 years of political independence, Ghana, like most African nations, remains largely dependent upon foreign investment to develop its economy having undergone extensive liberalisation in the 1990s under the diktat of the World Bank and International Monetary Fund (IMF).

This means that companies supplying foreign capital, technology and management in the mining sector have replaced state enterprises in exchange for large concessions and a token royalty payment of just 3 per cent of profits to the national treasury and local tribal chiefs.

Since little revenue from this valuable mineral ends up in Ghanaian hands, it�s no wonder that the country�s human development indicators are in decline and poverty is on the increase. One consequence of this failed �trickle down� has been the growth of the country�s galamsey, or small-scale illegal miner population, estimated to directly employ half a million people. The galamsey operate wherever they can, mostly in poor conditions, and, says leading expert Dr. Gavin Hilson of the University of Manchester, it is a �fundamentally poverty-driven industry�.

Illegal mining


Near the town of Nkawkaw, 180 km north of the capital Accra, lies one such illegal mining operation at Noyem. The land here is part of a concession owned by the US-based Newmont Mining Corporation which contains some rich fracture zones from the main gold vein which have attracted thousands of galamsey.

The �dig-and-wash� method used here is the most environmentally harmful as the gold-rich layers of top soil are cut out and washed away, rendering useless what was once farmland by leaving behind little more than infertile swamps, breeding grounds for malaria. Once enough gold particles have been sifted, the most common way of consolidating it is to add mercury - as effective as it is toxic. The amalgam is normally cooked to burn off the mercury, leaving behind the concentrated gold. Apart from the practice of panning gold direct from rivers and streams, this is the most basic technique available which often results in ill health, especially skin damage and diarrhoea.

Many women and children as young as seven also live and work at galamsey mine sites, often earning money by transporting ore from the many underground shafts which dot the landscape, carrying bags weighing up to 15 kg several hundred metres to where the material is crushed and washed.

Further, the galamsey often find themselves in a vicious circle of under-funding driven by unscrupulous buyers who roam the sites to purchase the small amounts of gold for as little as 50 per cent of the market price. This is often done when miners have little choice but to cut a deal with the buyers who are willing to provide credit to pay workers in exchange for low prices. These credit arrangement are informal and subject to contacts, bartering and preferential treatment, which in itself is cause of conflict and division within the Galamsey community.
Women and children
Ghana gold mining: women and children at work. Photo � James Haselip

Nonetheless, the wages earned by galamsey miners in Ghana are typically double the average for unskilled labour where workers can expect to earn a minimum of US$3.50 a day. If these miners were to be �legalised�, it would allow them access to micro finance to replace the current situation where many miners find themselves held hostage to the buyers.

Conflict zone

In the country�s western region, a well-known conflict zone exists between galamsey and the large-scale mining at the Prestea-Bogoso concession controlled by Bogoso Gold Limited (bgl), 90 per cent owned by the Canadian company Golden Star Resources. Here, galamsey conditions are notoriously bad - the miners live either on or very close to the sites themselves which are crowded and strewn with litter and pools of stagnant water. The more established areas made up of permanent buildings are surrounded on all sides by ramshackle huts, stalls and impromptu camps built by and for the miners and their families.

Hilson explains that the attitude of the foreign operators towards the small-scale miners is informed by this simple clash of economic interests: "in most cases galamsey miners are operating on concessions awarded to the foreign companies, making them illegal. As the gold diminishes and these two groups meet, conflicts are not inconceivable.�

Indeed, in July 2005 the galamsey at Prestea and the surrounding villages protested on the Bogoso concession about the general conditions in the area and specifically about mine blastings, which were occurring unannounced and distressing the residents and causing damage to their houses. During this demonstration, seven people were shot by bgl security for encroaching on their operating concession.

The company also has a bad track record with environmental damage, particularly for the contamination of local drinking water. In October 2004, a significant leak of cyanide from the Bogoso site rendered local water undrinkable for several weeks; and again in mid-2006, a cyanide spill affected the community at nearby Dumase, whose inhabitants reported widespread illnesses believed to have been caused by drinking contaminated water.

State revenues


Emmanuel Quarm, 24, is the chairman of the �Number Four Bungalow�, a galamsey camp named after one of the four mining bases built at Prestea by the British in the 1920s. When I asked him about the status of the galamsey working here, and their relationship to the government and the mining companies, he was accusatory: �I blame the government for giving away such large concessions to these private companies. It is their fault that we are made to be illegal people living on our own land.�

There is no dig-and-wash mining at �Number Four� - the galamsey instead extract gold from material carried up through rickety vertical shafts dropping as deep as 400 feet. The miners operate in gangs of 10-20, each assuming a different role in the hard process of extracting, transporting and breaking up the rocks containing the gold fragments before being further crushed and separated. Diseases, especially tuberculosis (from mining below ground), are prevalent.

On average, 10-12 per cent of Ghana�s total gold production comes from the galamsey miners. This is known because all the gold buyers in Ghana are licensed by the government to maximise the state�s revenues and to minimise smuggling, which took place in the past. This gold is sold to the state-owned Precious Minerals Marketing Corporation, presenting a contradiction between the government�s willingness to accept galamsey gold while doing little or nothing to support or otherwise formalise their industry to help iron out the injustices inflicted by corrupt buyers, and ameliorate the health and environmental risks.

The importance of establishing dialogue and communication between local communities and the formal sector has been one of the functions of several NGOs. One Ghana-based organisation that investigates cases of conflict or injustice suffered by communities due to the encroachment of mining offers advice and advocacy on how to deal with the authorities. Their representative who asked to remain anonymous stated that �the main problems are related to displacement, mainly by the big mining companies. This experience creates unemployment and often pulls families apart�.

Asked what he thought the authorities were doing, or failing to do about these problems, he blamed the government�s mining laws and policies, which, he argued, failed to consider the interests or dignity of local people: �We are not calling for a ban on large-scale mining. No�we are demanding that the government involve the local people to help make it a more democratic and responsible industry, otherwise it is just more evidence that the government is biased in favour of the large companies.�

Water resources


The government�s Minerals and Minerals Act (2006), fails to address community issues and maintains extensive rights and powers of the private concession-holder to operate subject to little regulation. For example, Article 17 of the Act stated that concession-holders could �obtain, divert, impound, convey and use water from a river, stream, underground reservoir or watercourse within the land subject to the mineral right�.

Effectively, this gives the companies total control over water resources relied upon by thousands of people, a fact which worries many observers. �This is an example of how our government does not care about these people, and how they are allowing foreign mining companies who don�t know or understand these communities to act with impunity and take control over the things that life depends upon,� argued one such critic.

Ultimately, if gold mining fails to tackle the country�s poverty, increasing every year with population pressures, then future conflicts and environmental damage of the order that has occurred in Nigeria with the oil industry would appear likely, offering grim prospects for a nation and a people known for their peaceful relations built upon implicit trust and goodwill.

James Haselip is an academic and freelance journalist based at the Centre for Environmental Policy at Imperial College, London.




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