[ 2014-07-12 ]

From gold to ghost towns – salvaging resource rich communities in Ghana
Some extractive industry watchers are skeptical
about AngloGold Ashanti's return to mine in Obuasi
after its announced two year break to restructure
operations.

The mine has been put under 'care and maintenance'
following operational losses recorded in recent
times, a situation that has resulted in the
retrenchment of over 5,000 employees.

'Basically we have some challenges with the
production levels and the cost of production is
also high, the gold price has gone down so there
is the need to re-strategize and see how the mine
can become profitable in the future,' said Aboagye
Ohene Adu, Senior Manager in charge of
Sustainability at the AGA Obuasi Mine.

But Dr. Steve Manteaw of the Integrated Social
Development Centre (ISODEC) is cynical about the
company's come back.

'In my view you could still re-strategize without
closing shop; scale down your operations and then
you do your re-strategizing before scaling up your
operations,' he observed. 'I guess it would have
been more difficult for government to accept and
allow them to go if they said they were closing
shops for good and I think the easier way would be
to say 'we are putting the whole mine under care
and maintenance' such that, in terms of the
negotiations around that it would be much easier
for them to exit.'

The inherent danger, according to Dr. Manteaw, is
that the mining concession could be opened up to
illegal mining or 'galamsey' invasions which could
affect future prospective investor' attraction.

However, based on the existing 6.5 million ounces
of ore deposits currently available at Obuasi, Mr.
Ohene Adu is positive gold prospecting in Obuasi
could thrive for at least 17 years if AngloGold's
redevelopment is properly undertaken.

'We are trying to put in certain initiatives in
partnership with the government to ensure that the
communities here also become sustainable as we
move along,' he said.

The AngloGold Ashanti mine is the backbone of the
economy of the Obuasi municipality and four other
adjourning districts as well as a key foreign
exchange earner for Ghana.

Apart from the impact of the latest development on
direct employment, peripheral services that feed
off and depend on the mine would be hardest hit.
The company would also withdraw funding of
existing social services in the areas of health,
education and sports.

Woes of local mining communities
Sanso is a predominant mining community in Obuasi.
Local assembly representative, Benjamin Annan,
says livelihoods are negatively impacted because
there are no alternatives to mining for local
communities.

'When the mining was underground, we were not
having problems because we are farmers, but now
surface mining has affected our farms. Now Sanso
is ghost town; we can't farm, we can't have access
to the mine because we're not skilled labour and
our source of livelihood - artisanal mining - is
also closed,' he complained.

AngloGold has been engaging interest groups to
offer alternative livelihoods that would protect
local communities from turning into ghost towns,
says Mr. Ohene Adu.

'The company alone cannot take the burden,' he
noted, stating that some local economic
initiatives are being thought through to create
employment opportunities.

Richard Ellimah, a community rights activist and
Executive Director of NGO, Centre for Social
Impact Studies (CeSIS), says the company's two
year break is an opportunity to begin the process
of designing an alternative industrialization
programme for Obuasi.

'It was a long term decision we should have made.
Everybody should have understood that there will
come a time when the mining company will fold up;
either they will find mining no longer profitable
and they'll leave or the ore will get depleted,'
he observed.

According to Mr. Ellimah, Obuasi can sail through
the current crisis if sustainable small scale
mining is promoted alongside agriculture.

He therefore wants the Minerals Commission and
AngloGold Ashanti to consider ceding off part of
the mining concession for small scale miners to
begin operations.

'If we have people in town who have the requisite
capital and want to do mining, there should be
available land for them to do their mining because
for small scale miners, their operations don't
generate so much cost and they are indigenous
companies who would not just fold up because gold
price has fallen and the money will stay in the
town,' stated Mr. Ellimah.

The Obuasi Municipal Assembly is already looking
forward to improved working relations with
AngloGold Ashanti when the mine is reopened for
business.

Isaac Appiah Nsiah, Municipal Budget Officer,
expects that 'there should be more transparency
with regard to how we generate revenue and how the
communities are going to benefit from that. The
Assembly itself is going to open up to the
communities so that they would also know what they
are getting from AGA and what we are utilizing the
money for.'

Integrating mining into national economy
Nana Owusu Akyew Brempong of the Adansi
Traditional Council is seeking divine intervention
for AngloGold Ashanti to resume operations after
the downscaling exercise 'because we have suffered
a lot and the Lord will change things for us'.

Ghana has failed to integrate its gold resource
into the national economy after over 100 years of
commercial mining.

Dr. Steve Manteaw says the Obuasi experience is a
bitter lesson for Ghana to ensure that the
extractives sector serves as conduit for
sustainable development.

'When you as a policy want to integrate the
resource into the rest of the economy, then you
want to make a departure from collecting your
royalties in cash to collecting them in kind as
raw material gold so that you supply that raw
material gold to the domestic jewelry making
industry; when you do that you'll be creating
jobs, you'll also be creating tax opportunities
for financing local and national development',
said the ISODEC Coordinator.

In adding value to Ghana's gold exports, Dr.
Manteaw added that there is a multiplying benefit
of integrating gold into the local economy,
including tourism, as people troop to Ghana to
experience the reflections of the 'Gold Coast'.

Story by Kofi Adu Domfeh

Source - Kofi Adu Domfeh

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