Ghana, where gold mines have long drawn foreigners with an eye on the quick buck is under pressure to be more careful with the profits from its precious metal.
Fifty years ago, after gaining independence from Britain the West African country known as the Gold Coast changed its name to Ghana in a bid to break with the colonial past. Today, the gold mines that first brought speculators to the country are still attracting foreign investment, but this time around there is mounting pressure from Ghanaians to ensure that locals and not just outsiders benefit from the profits.
"They come and complete all the extraction and leave your community worse off than when they came to see it," says Jeremiah Odoom, a young farmer in Obuasi, a southern Ghanaian town in Adansi district, where gold has been mined since the 17th century. Obuasi is home to the world's 10th largest gold mine – owned by AngloGold Ashanti, the world's second largest mining company.
This town of 115,000 people used to be known for growing oranges. "That is what I saw my grandfather cultivate but, unfortunately, we can't grow oranges in the town and its surrounding area anymore because chemicals released from the mines have rendered our farming areas desolate," says Odoom. "I was forced to become a miner soon after finishing school. But that is not what I would have wished for myself. Now we are at the mercy of the mines, what happens when they finally close the mines after the ores underground are finished?"
Odoom is among many Obuasi residents who want Ghana's government to stop granting licenses to mining companies. But the government has identified mining as a priority sector for cutting poverty. Statistics indicate that nearly 45 per cent of Ghana's population lives on less than one dollar a day and nearly 80 per cent on less than two dollars.
In 2005, mining contributed $113.8 million in revenue from 14 companies operating in the country and contributed five per cent to Ghana's GDP. Ghana also has vast untapped reserves of minerals such as bauxite, iron ore, limestone and kaolin.
Dominic Forbih is the minister of land, forestry and mines. "The mining industry is a very important one for the country," he says, "It is one of the largest foreign exchange earners for Ghana, as well as a provider of high-quality employment to Ghanaians. Poverty alleviation has become possible because on average about 48 per cent of export earnings by mining companies is retained in the country. When it is considered that the mining companies also pay corporate tax and government dividends, then the contribution of mining in the area of poverty alleviation is substantial."
But the government is also mindful of a growing list of complaints about mines – in common with many other mineral-rich countries, it has heard allegations of water pollution, deforestation and human rights violations caused by mining companies. Also common are complaints that new mines displace farmers but take no responsibility for their welfare after the compensation that they receive for giving up their land runs out.
Lin Tamufor, environment project officer of the Third World Network (TWN), a non-governmental organisation based in Accra, says many of the people who were displaced by mines in Obuasi have become paupers. "The compensation that is paid out does not take care of the future; neither does it give any form of stable employment to the people. When the money runs out there is nowhere for them to turn to. The corporate social responsibility programmes do not incorporate plans that would provide alternative employment. For example, there is no use in providing a few rabbits to a cocoa farmer who has never handled these animals in his life because this would not help him improve his life."
The search for a compromise between the government's desire to raise revenues from mining and its duty to enforce standards led it to revise the1986 Mineral Code last year. Mining companies are now expected to carry out environmental assessment, proper land acquisition and long-term social programmes for the displaced.
A visit to Adansi district shows that AngloGold Ashanti is helping to construct water banks – artificial lakes that can sustain year-round farming. In addition, it runs an aquaculture project in Ayanfuri, a mining community near Obuasi. "This way, the company is not only seen as just coming for gold but giving the people what they would do long after the gold has been depleted," says Elton Annan, community relations officer for AngloGold Ashanti.
In the past, mining companies would only provide a few social amenities such as schools and community centres. Thomas Oduru, an executive member of the Obuasi Youth Association believes the government legislation is working. "We can only say that the government has started something which different from what used to be the mining companies' social responsibility programmes – providing amenities here and there. Now, it is clear, they have joined the government's poverty alleviation programmes," he says.
However, enforcement has sometimes been lax. In a study conducted in Prestea, a mining town in western Ghana, the Third World Network alleges that some mining companies encroached on the premises of the local hospital. The Environmental Protection Agency says that it did not know about this until TWN brought it to its notice. Elsewhere companies have been known to pack up and leave the country without following the full process of mine decommissioning, leaving behind degraded land, unpaid miners and displaced and uncompensated farmers.
Even mining companies that offer apparently generous compensation packages are not immune to criticism from displaced communities. Three years ago, the US company Newmont Ghana was granted two concessions in the districts of Brong Ahafo and Eastern Region, which displaced 12,169 people over an area of 3,104 hectares. The mines have created 3,000 jobs and the company has put in place what it calls the Ahafo Agribusiness Growth Initiative (AAGI), under which people who have been displaced by mining activities will be provided with alternative work. Newmont Ghana has paid out millions of dollars in compensation, and is providing training in animal rearing and fish farming alongside access to small loans.
Members of the community in Brong Ahafo, known as the Mehame are not satisfied with the measures put in place. What upsets them is that mining is disrupting their decades-old tradition of growing cocoa – a strategic crop, second only to gold in the list of top Ghanaian foreign exchange earners.
Nana Bofa, a farmer, who lost 15 acres of land to Newmont, is aggrieved because he believes the government is helping foreign companies to take over farmlands. "Our President has for a long time stressed the need for people to go into farming, and it is therefore surprising that the same person should be taking over our farms for mining companies," he says. "It is the responsibility of the government to be on the side of its people – and not companies that have come from afar to dislocate the livelihood of the ordinary people here."