Illegal Mining

The Ban 2017

Ghana has long been known for its bountiful gold reserves and was called “the Gold Coast” during its colonial era. But illegal mining in Africa’s second largest producer is taking a heavy human as well as environmental and economic toll with more than $2 billion lost to the practice last year alone. Campaigners have been lobbying against illegal mining—known locally as “galamsey”—since February when local media revealed the dramatic impact that the practice, which often uses mercury, was having on Ghana’s soil and water supply. While illicit prospecting has long been an issue for Ghana, the new government elected in December has now made combatting it a priority. It issued a temporary ban on all small-scale mining and is forming a plan due to be released in September to end the phenomenon permanently. Security forces recently clashed with illegal miners in the Ashanti region, leaving one miner dead. The incident in the town of Obuasi was a result of “Operation Vanguard”, which has seen 400 members of the security forces deployed to take on the illegal miners.

Abraham Otabil, a spokesman for the natural resources ministry, told AFP that while illegal mining was damaging rivers and farm land, it was also having a serious economic impact. 

The ministry believes that more than $2.2 billion (1.87 billion euros) was lost to illegal mining in uncollected taxes in 2016. 

‘We can’t go and steal’

Around half of all small-scale mining operations are illegal, the government estimates, suggesting that the cost of the problem could be larger still.

Since 2006 gold has been Ghana’s main source of foreign currency.  And while illegal mining has decreased since the government crackdown, rogue operators continue to defy the authorities. As well as the environmental and economic costs, illegal mining has also caused much human suffering.

An estimated one million people are involved in illegal mining in Ghana and each typically earn between $100 and $300 per month, she said.

Those who opted to farm could be expected to earn just $70 a month. Otabil, the ministry official, said the government would try to support miners to shift away from their illicit incomes.

“Within the next five years, we should be able to help many more people acquire work and jobs on their own, set up their own businesses and forget this illegal mining business,” he said.

But illegal mining does not just attract Ghanaians: some 50,000 foreigners are thought to be involved, according to an Oxford Business Group report published in 2015.  At least 200 Chinese nationals have been arrested in connection with illegal mining so far this year, Otabil said. 

A media backlash against China over its citizens’ involvement in galamsey prompted a rare rebuke from Beijing’s ambassador who in April called on Ghana’s government to “guide the media to give an objective coverage on the illegal mining issue”.  President Nana Addo Akufo-Addo recently defended the crackdown, saying that it was in the national interest.

“We are not against the Chinese or any other citizens but what we are all seeking is to protect the integrity of our environment to secure a better future for unborn generations,” he told local media.

Small scale miners

Below is a chart of small scale mining operation in countries across the world. The table shows numbers of mine and the percentage of illegal miners. as you will see

Risk analysis

Political Interference
Ghana has a peaceful history and currently has no internal political conflicts. It has a stable parliamentary system with free elections and there were no reports of trouble when the government changed in 2009 whatsoever. Ghana encourages foreign investment and we see no threat of political interference in the immediate or distant horizon. Trans Eco enjoys very good relationships with people at all levels of government. 

War

There are no signs of any conflicts either internal or external at the time of writing. Ghana has enjoyed over a century of peace and has not been at war of any kind since the Anglo-Ashanti wars in the 18th Century, ending in 1901, and one minor regional war in 1900. This is one of the main reasons why Trans Eco chose to operate in Ghana.

Criminal Activity

While the threat of criminal behaviour is always a possibility, The Company has a local director who was a manager with Anglo Gold Ashanti and serves as an adviser on internal security. The Company intends to make frequent deposits of gold in order to avoid the possibility of any significant losses due to theft or other unforeseen events. The Company consider such threats as relatively unlikely in Ghana and no more so than in many other parts of the world.

Climate

The area is equatorial and has two seasons of very heavy rain. The site is close to the Ankobra River and there is always the potential for flooding. However, investigation shows that the specific concession site only floods briefly once or twice per year during the wet seasons for up to one or two weeks at a time only. In 2010 the immediate area has only suffered one two-week period of localised flooding and only then in one part of the concession. We therefore consider the risk of major disruption to be minimal. It is our intention to retain a percentage of profits to keep the mine operational in terms of systems and staff if there is any unusual downtime due to flooding, fire or other climate-related problems. We also carry insurance to minimise the impact of any such events.