AGL suspends underground mining project

Damang (W/R), June 21, GNA- Abosso Goldfields Limited (AGL) has suspended the proposed underground mine project due to an invasion of its concession by illegal miners. This project was expected to have been in operation for twelve (12) years and create work for more than 200 local people over this period. Mr Peet Van Schalkyk, General Manager, AGL, said this at the Damang Mine Community Consultative Committee (DMCCC) meeting at Daman on Friday. He said the mine was expected to have produced over 1.1 million ounces of gold and generate an amount of about US$ 92.4m in royalties and taxes to the state. "The Gold Fields Foundation Fund would also lose 2.8 million dollars meant for the local communities' projects.

Mr Van Schalkyk said the Mine is reviewing its present exploration programme in view of the situation, because there is no point in trying to extend the mine's life through exploration because the illegal mining poses a threat to its operations. He said the illegal miners had invaded the rich ore bodies at some locations of the concession, including Rex, Chida North and Chida South. "The inability of AGL to have access to these ore bodies would shorten the life span of the mine by an estimated two years", adding that, "this will cost the state about 14.2 million US dollars in royalties and taxes".

Mr Schalkyk said AGL's exclusive right to work on its Mining Lease was under serious threat since there are presently over 2,500 aggressive and well armed illegal miners operating on the concession with over 75 crushers on various parts of the Lease Area. He said the situation was dangerous because there was potential pollution and contamination of water bodies on the concession through the unregulated use of mercury and cyanide, as well as explosives by these illegal miners. Mr Schalkyk said this undermines the existing Reclamation Security Agreement between AGL and the Environmental Protection Agency (EPA), which sets out agreed rehabilitation programs for the mine based on its activities. He said the aggressive nature of the armed illegal miners poses a security threat to the employees of AGL and its subcontractors, adding that, the current situation does not allow the company to exploit the full potential of the Mine to ensure expected retunes to its shareholders.

The General Manager said due to the invasion by the illegal miners, AGL would not be responsible for any degradation to the environment on its Lease, due to the use of explosives and hazardous chemicals such as mercury and cyanide by the illegal miners. He said AGL would not be able to meet the various legislations, relating to mining on the concession, due to the negative effects caused to the environment by the illegal miners as well as any infractions against the Wildlife Laws of Ghana.