‘Galamsey,’ grave danger to FDIs

Ghana could lose Foreign Direct Investments (FDIs) if government does not as a matter of urgency check the operations of illegal miners (galamsey operators) in the country.

The recent incident that occurred at AngloGold Ashanti’smine site in Obuasi – resulting in the death of the Head of Communications of the company, John Owusu, has raised eyebrows in Ghana’s mining industry.

Galamsey operators were reported to have charged towards Mr Owusu and other employees of AngloGold Ashanti and when they tried to escape, a vehicle of the company unfortunately hit and ran over Mr Owusu. He was pronounced dead at the AGA Hospital, where he was rushed to.

In a statement issued by AngloGold Ashanti dated February 15, 2016, the company said if the operations of illegal miners are allowed to continue uncheckedon parts of its concession that could threaten the long-term viability of the mine. The statement further said AngloGold Ashanti Ghana’s ability to continue its feasibility study and maintain critical services, which serve both the operations and surrounding communities, would be affected.

The company has however called for the re-establishment of law and order.

“AngloGold Ashanti Ghana will continue to urge authorities at a national and local level to assist in upholding the law and returning safety and security to the site before further injuries or further loss of life occur,” the statement said, adding,“Unless we have certainty that our employees are able to work in a safe environment, we will have no choice but to progressively withdraw personnel from the mine until the situation normalises.”

This is not good for Ghana at a time when the country’s revenues are plummeting on various fronts.

What’s more, foreign investors looking on would lose confidence in the country. Already, Ghana’s FDIs have dropped by 31.25 per cent from US$3,387.96 million in 2014 to US$2,329.30 million in 2015.

This will put in vein all the efforts instituted by the Minerals Commission complemented by that of the Ghana Chamber of Mines to attract investment into the minerals sector.Which also comes with the risk of some companies cutting investments.

Government must put in place security measures to prevent an imminent loss of investor confidence in the country.

It is for this reason that the Ghana Chamber of Mines has urged government todo something about the issue which is becoming a perennial one particularly during election years.

“The country stands to lose heavily if the activities of the illegal miners are allowed to fester ahead of the election in November 2016. There is a clear and present danger to our environment and to Ghana’s economy as illegal miners fight large-scale mining companies for concessions the latter have obtained legally. This in itself breeds a sense of insecurity and fear among investors which will cause a slowdown in investment in the country’s minerals sectors,” says the Chief Executive Officer of the Chamber, Mr SulemanuKoney.

Mining companies, over the years, have received support from the National Security Committee on Lands and Natural Resources in addressing the encroachment of their concessions by illegal miners. However, there are pockets of illegal miners that continue to encroach on the concessions of companies in spite of the interventions by the state.

According to the Chamber, this‘illegality’ deprives duly licensed companies of the opportunity to exploit the inherent mineral resources more safely and prudentially while it creates additional costs for the companies for rehabilitating the land so destroyed by the illegal miners.

“The consequences of this illegality are far-reaching. Pits excavated by illegal miners claim the lives of company employees as well as those of residents of host communities. The resultant destruction to the environment is immeasurable,” the Chamber said.

Mr Koney laments that Ghana earns next to nothing from the activities of these illegal miners. Only a few unscrupulous individuals benefit from it. He said it is no secret that the government loses significant amounts of fiscal revenue every year as a result of such illegal mining activities. Apart from projecting a bad image for the entire mining sector, the repercussions to the environment are ominous.

“If the activities of the illegal miners are not nipped in the bud it would undermine Ghana’s efforts at attracting and sustaining the much needed investment into the mining industry,” he stated.

Companies such as AngloGold Ashanti - Obuasi Mine in recent weeks and Perseus Mining at Ayanfuri- in recent months, have seen an escalation of activities of illegal miners on their concessions. These companies who employ thousands of Ghanaians are compelled to use all legal means to eject the illegal miners from their concessions with the help of the security apparatus. This has often resulted in violent confrontations leading to injuries and destruction of property.

AngloGold Ashanti has particularly been inundated by illegal miners contributing to its inability to attract investors to partner it to revamp the mine. The recent surge in illegal mining activities at the Obuasi mine has been violent, leading to the death of one of the company’s senior employees, and follows the withdrawal of the military that had been stationed at the mine. AngloGold Ashanti has as a result evacuated some of its employees for safety and security reasons. The illegal miners have remained on the mine.

They have now worked their way to certain underground workings and are using explosives in the process.

The audaciousness of illegal miners in perpetrating the act despite the recently passed Minerals and Mining (Amendment) Act, which criminalises the act and ascribes punitive measures, is baffling to say the least. The Chamber is therefore calling on the government to crack the whip on illegal mining and make it an unattractive venture for all who engage in it.

The Chamber is also calling on the government to return the Military to AngloGold Ashanti, Obuasi to protect life and property on the mine in order to restore investor confidence and attract the necessary investment into the mining sector.

With excerpts from the Ghana Chamber of Mines.