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
“For
the fact that companies are now willing to disclose information to the general
public, for Ghanaians to know how much companies are paying to government alone
is enough to ensure some transparency in their operations,” he stated.
Mr.
Ashiadey says giving legal backing to the Ghana EITI process will help address
some of the challenges faced by the Initiative.
