Illegal miners weigh down investor confidence

The surge in illegal mining activities on large-scale mining concessions belonging to multinational firms is holding back potential investments into the dominant economic sector, as the act continues to affect investor confidence.

Foreign investors have expressed shock at the apparent lack of action by relevant sector-authorities to stop illegal mining activities on such large-scale mining concessions, and even ecologically sensitive areas.

The miners are therefore calling on the government to, as a matter of urgency, flush out the illegal miners from legal mining concessions in order to restore investor confidence and attract the necessary investment into the mining sector.

Illegalities in the mining sector, led by the ‘galamsey’ menace, deprives duly-licenced companies of their opportunity to exploit inherent mineral resources more safely and prudentially -- while it creates additional cost to the companies for rehabilitating the land, fixing plant and equipment destroyed by the illegal miners.

Companies such as Owere Mines in recent days, and AngloGold Ashanti Obuasi Mine and Perseus Mining in Ayanfuri in recent months, have seen an escalation of illegal miners’s activities on their concessions. These companies not only employ thousands of Ghanaians but also provide business to locally registered companies, and must be supported by state agencies in using legal means to eject illegal miners from their concessions.

AngloGold Ashanti has particularly been inundated by illegal miners, compounding its inability to attract investors as partners to revamp the mine. Their activities have not stopped, even with return of the military -- who have been stationed only at the entrants to the mine-shafts and not been allowed to patrol the mine’s fenced perimeter to flush out the intruders.

Mr. Eric Asubonteng, General Manager & Managing Director of AngloGold Ashanti Ghana Limited-Obuasi Mines, told a news conference that the Obuasi Mine has grave and mounting concerns about the situation wherein illegal miners have been looting large quantities of high-grade gold-bearing material for more than two months -- saying their activities are causing significant damage to critical infrastructure which serves both the mine and surrounding communities.

He said since the security forces were withdrawn at the beginning of February, incursions by several hundred illegal miners onto the site have continued unabated.

“At each step in this unfortunate process, we have kept all authorities informed of developments, including the damage being caused to the mine, the Obuasi Community, and the long-term prospects for this important resource.

“Our confidence has been shaken by the failure to protect our rights as significant long-term investors in Ghana. Our hopes were temporarily raised when we learnt that President John Mahama had directed a return by the highly-regarded Ghana Army to the Obuasi mine; however, law and order is yet to be restored at Obuasi,” he said.

“On 26 March, we understand the military received an instruction to pull back and guard only certain limited parts of the infrastructure, and not to restore law and order by clearing the site of illegal mining activities. To this day, the illegal miners continue to operate with impunity on the richest parts of the ore body.

“We are at a loss to understand how a clear directive has been ignored. This has had the effect of compromising the safety and security of the mine’s resources and workforce, as well as the viability of the Obuasi Mine, the rights of foreign investors in Ghana, and the benefits flowing to the community from it.

“We fear serious and lasting consequences if the situation is allowed to continue. For example, electrical installations that support water treatment plants have been vandalised by the illegal miners,” he said.

The worrisome situation, according to Mr. Asubonteng, has affected AngloGold Ashanti’s ability to treat water -- and with onset of the rains there is a real possibility that this essential work will be compromised. “The presence of illegal miners is making it impossible for us to manage the situation accordingly,” he said.

He indicated that AngloGold Ashanti’s primary aim, subject to among other things the outcome of the ongoing feasibility study, remains to turn the Obuasi Mine into a long-life, modern, mining operation that will attract foreign investment and provide high-quality direct and indirect employment, taxes and foreign exchange revenue to the people of Ghana.

“However, the continued presence of illegal miners on the Obuasi Mine concession continues to jeopardise this potential, he stated.

“Our concerns are increasingly being shared by civil society groups in the region, who despite explicit threats to their own safety have begun actively protesting against the illegal miners’ destruction of the opportunity the mine represents for the people of Ghana.

“It is crucial that government works with AngloGold Ashanti in resolving threats to the viability of Obuasi, and its contribution to the Ghanaian economy,” he said.

Mr. Sulemanu Koney, CEO of the Ghana Chamber of Mines, in a media briefing in Accra explained: “As we speak, the illegal miners remain on the concession of AGA Obuasi Mine. This is clearly unacceptable and breaches the investment laws of the country. One can only ask, ‘Where is officialdom?’

“It is regrettable that the beacon of mining in Africa will suffer this fate at a time of downturn in the industry; a period within which host countries globally are encouraging investment in exploration and development of mines in anticipation of an upturn,” Mr. Koney stated.

He called on government to crack the whip on the festering illegal mining before it develops into catastrophic proportions, as pits excavated by illegal miners claim the lives of company employees as well as those of residents in host communities. The resultant destruction to the environment is immeasurable.

Mr. Koney explained that there is a palpable threat to the environment and the country’s economy if illegal miners are not flushed out of legally acquired large-scale mining concessions.

“This insecurity and fear among investors will lead to a slowdown of investment in the country’s minerals sectors,” he remarked.