Chinese miners flock to Ghana gold boom
By Xan Rice | Financial Times,
MPATASIE, Ghana — Before the gold rush, few cars disturbed the dirt road cutting through the lush hills to this village in central Ghana. Then, two years ago, 10 Chinese men arrived with a Ghanaian business partner who said he had a mining licence.
Soon, bulldozers were turning vast patches of forest dotted with oil palms and cocoa trees into fields of mud.
By October last year, about 100 Chinese men and women were living in makeshift camps around Mpatasie, according to the village chief, Nana Agya Owusu. Some carried guns to protect their claims. Locals, who had hoped to benefit from the gold production but had seen few benefits, were becoming angry. So were the Ghanaian authorities, who had recently deported dozens of illegal Chinese miners.
“Six trucks carrying armed forces came and attacked the Chinese,” Owusu said, describing the Oct. 11 raid in the Mpatasie area, a two-hour drive from the regional capital, Kumasi. “They took many of them away.”
When a group of miners tried escape into the forest, a 16-year-old Chinese boy was killed by the security forces. His shooting prompted a rare public complaint from the Chinese Embassy in Ghana, which is more used to trumpeting the two countries’ growing trade, worth more than $2.3 billion in the first half of 2012, a 72 percent increase from the same period in 2011.
The killing highlighted the mounting social and environmental problems in the booming small-scale mining sector in Ghana, Africa’s second-biggest gold producer.
For decades, tens of thousands of local miners called “galamseys” — a word derived from the English phrase “gather them and sell” — have scraped a living toiling in shallow pits and tunnels, often illegally on land belonging to big mining companies such as Newmont, Gold Fields and AngloGold Ashanti.
But the soaring gold price, which has doubled to $1,650 in four years, has attracted Chinese workers and heavy equipment to the sector, drastically changing the scale and nature of operations. In 2011, 30 percent of the country’s 3.6 million ounces of gold production came from small-scale mines, up from less than 25 percent in 2010, according to Toni Aubynn, chief executive of the Ghana Chamber of Mines, an industry association. Production is expected to increase further, and with it the involvement of small-scale miners.
“You now have bulldozers and other heavy equipment being used in small operations,” Aubynn said. “What could be done in five years is now taking five months and leaves a lot of environmental damage. It’s a serious issue.”
Aubynn estimates that “thousands” of Chinese are working in the gold-mining sector. By law, only Ghanaians are allowed to obtain mining licences for small-scale operations and to do the work. But foreigners can provide technical services and equipment. Before the influx of foreign workers began, Chinese traders had started supplying rock crushers and other machines to local miners.
“We don’t have machines. The Chinese have machines, so they help us,” said Akwasi Abu, chairman of the Amansie-West Small-Scale Mining Association, near Mpatasie. “There is no problem.”
Yet Chinese involvement is often far deeper. Steve Manteaw, director of the Integrated Social Development Center, an advocacy group in the capital, Accra, said Ghanaians who acquire mining permits but lack capital travel to China to seek partners.
“They look for people with money, show them a licence, and say, ‘Come and do business,’ ” Manteaw said. “Many of the Chinese who end up coming here assume it’s legal for them to mine directly.”
When the first Chinese miners arrived at Mpatasie, their Ghanaian partner sat down with Owusu, the village chief. It was agreed that the Chinese would repair the land after mining and that local people would benefit. Initially, Owusu was content, as the Chinese paid him a small sum to mine land on which he grew cocoa.
But the environmental rehabilitation never occurred, and prosperity for the village remained elusive. Shortly before the attack by security forces, the Ghanaian partner of the Chinese workers was chased from Mpatasie, Owusu said.
“He and the Chinese have not done anything for us,” he said.
Yu Jie, the political director at the Chinese Embassy in Accra, said his government “wants to co-operate [with Ghana] to solve the problem” of illegal Chinese miners. But he condemned the raid that killed the 16-year-old boy, identified only as Chen. A request for an inquiry and compensation for the boy’s family had been ignored, Yu said, and the embassy is considering its next step.
But it appears unlikely it will do anything to jeopardize an increasingly close economic relationship. In 2011, China extended a $3 billion loan to Ghana that included crude oil off-take agreements and stipulations that Chinese companies would obtain most of the works contracts.
Besides, it does not appear as if the raid at Mpatasie has affected Chinese involvement in small-scale mining operations. Two months after Chen’s death, many of the Chinese miners who had been arrested were back on their claims, flatbed trucks were bringing in new diggers, and bulldozers were clawing at the forest.
When Owusu went to check on the miners on his land, a Chinese man and two women peered nervously from behind a bamboo fence. After a few minutes, the man came out on to the road, where a red shotgun cartridge lay discarded, and shook the chief’s hand. Because he spoke no English, and Owusu no Chinese, it was left at that.
— Financial Times