Mining in Ghana

Posted: 29 March 2006

Ghana has a long history of gold mining, and the 21st century is bringing new challenges.

Ghana is a prime example of the natural resource paradox in Africa: A country rich in timber, cocoa, coffee, bananas, and especially gold, is still a poor country. About 40 percent of Ghana’s 21 million citizens live in poverty, despite the fact that it is the second largest producer of gold on the continent behind South Africa.

The recent climb in gold prices is generating a lot of mining activity in Ghana, but this is nothing new. Ghana has been known for its gold for centuries. When Portuguese traders established a port on the coast in 1482, they named it simply “Elmina” (the mine). British colonizers called the country “Gold Coast.”

Ghana is not just a mining country. Sixty percent of the labor force is in agriculture, which makes up 40 percent of the economy, according to World Bank figures. In the old days mining did not have as much of an impact on farming—it was mostly underground in shafts, or done by small-scale gold miners.

Modern mining is different. It is done mostly from the surface, digging huge open pits. Gold is extracted by dripping cyanide through massive piles of ore. This displaces farms, and can endanger water sources for villagers. And what mining takes away in farmlands it does not make up in jobs. Mining in the 21st century is capital intensive, but not labor intensive, and requires highly trained workers.

Financial Crisis

For 30 years, Ghana has endured a financial crisis, and is now struggling to pay off loans to the World Bank. Some of its debt is being forgiven, but the country is still under pressure to promote foreign investment. In one district, the government is making 70 percent of the land available for mining concessions, despite the fact that local communities have serious concerns about the social and environmental effects.

The latest mining contraversy in Ghana is over whether to allow mining in the country’s forest reserves. The government has allowed five companies to explore in national parks, some with funding from the World Bank, and they are pushing for the licenses to begin mining. The country has weak regulations that do not adequately protect people and the environment.

Oxfam America is supporting the work of the Wassa Asocation of Communities Affected by Mining (WACAM), a non-governmental organization that investigates human rights violations and environmental pollution connected to mining operations. WACAM is also promoting new ideas for regulations that will strengthen the role of communities in deciding whether and how mining can be carried out on their lands, and to create new legislation that will redress the country’s vulnerability to the negative effects of mining. The goal is to ensure that if mining takes place, it contributes to reducing poverty, not increasing it.