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High Gold Prices Bring Chinese into Ghana's Mines

  • Joana Mantey

Artisanal miners dig for gold in an open-pit concession near Dunkwa, western Ghana, February 15, 2011.

Artisanal miners dig for gold in an open-pit concession near Dunkwa, western Ghana, February 15, 2011.

ACCRA — A recent influx of Chinese nationals into Ghana’s gold mining sector is raising concerns among policy makers and the country's citizens. This is because the Chinese are engaged in small-scale mining, an area that in theory, is solely preserved for Ghanaians. Most of them are also apparently working without a permit and on occasion extend their operations into some restricted areas, devastating the land in the process.

Investments

Ghana was known as the Gold Coast before gaining independence in 1957. Since then the mineral has been one of the backbones of the nation’s economy. So why this sudden interest in Ghana by Chinese small-scale miners? Ahmed Nantogma is director of public affairs at Ghana’s Chamber of Mines. He said the main reason is the rise in the price of gold on the world market.

From $200 an ounce about 10 years ago, gold is now trading at more than $1,500 an ounce. Therefore, the Chinese are assured of good returns on their investments.

“You go where your product is," said Nantogma. "So that is why they are not going to say, Congo or Liberia, they come to Ghana. And they know they can take advantage of the situation and hide somewhere in a bush and mine illegally without paying taxes.”

Land, community disruptions

On occasion, conflict situations erupt between residents in mining communities and the Chinese miners.

“The [Chinese] leave the land devastated, sometimes they do not even consult the people before they go there. The people also feel that they own the resource. They own the land and [Chinese] have come to take the gold away,” Nantogma explains.

There are social factors at work too.

Richard is a Ghanaian businessman. He said the coming of the Chinese has raised rent prices for guest houses and hostels in some mining towns, such as Dunkwa-On-Offin in Ghana's Central region. He said access to such accomodations is becoming difficult for Ghanians because most Chinese miners pay up front for months on end.

Added to this is the devastating effect of illegal mining on the land. Isaac Abraham is a Ghanaian worker. He said farmlands are destroyed and water bodies are polluted as a result of illegal mining. “Sometimes they dig the place and when they find no mineral they just move to another place just like that. But with the regulated mining companies this does not happen,” he said.

Kofi Tetteh is an assistant manager of small-scale mining at the Minerals Commission of Ghana. He said licenses have been granted to about 1,000 small scale miners in Ghana. He says many of these Ghanaians sublet their licenses to Chinese miners. “Behind every illegal Chinese operator, we are looking at an opinion leader, a chief, a farmer, a land owner or somebody who then sublets it to the Chinese for these illegal activities,” he said.

Illegal mining

The Ghana Immigration Service says there are about 3,000 Chinese in Ghana with resident permits. However, the number of Chinese engaged in illegal gold mining activities is unclear, since none of them have been registered. Under the Minerals and Mining Law of Ghana, people wishing to engage in any form of mining are required to obtain the needed license.

Tetteh said enforcing the law on illegal mining is a problem in Ghana. “At times we apprehend these Chinese. We send them to the law courts and the same law is used to set them free,” Tetteh added.

Tetteh said the Minerals Commission is working to reform the law in order for stiffer punishments to apply not only to the Chinese but all other categories of people who may flout the law.

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