Who Owns The Gold? Illegal Miners Take Over Abandoned, Idle Mines

Who Owns The Gold? Illegal Miners Take Over Abandoned, Idle Mines

Tens of thousands of people do small-scale gold mining in Ghana, some of it, illegally, in Africa’s second-largest gold producing country. Gold is the No. 1 source of government revenue in the country, ahead of oil and cocoa, BusinessDayLive reported.

Illegal miners in Ghana have taken over the Owere Mines, Ashanti-Obuasi Mine and Perseus Mines, and the authorities are allowing it to happen, said Sulemanu Koney, CEO of Ghana Chamber of Mines, NewsGhana reported.

Africa’s biggest gold producer, AngloGold Ashanti, said on Wednesday it had “grave and mounting concerns” about illegal mining at its Obuasi mine in Ghana, which has been idle since 2014 when the company laid off thousands of workers, Reuters and Bloomberg reported.

Illegal miners took control of areas with the richest deposits of gold, hampering efforts to redevelop the facility, according to the Johannesburg-based company.

If the illegal activities continue, AngloGold Ghana General Manager Eric Asubonteng said the company will consider its options as an investor.

The site is one of the richest gold deposits in Africa, AustralianMining reported. If the takeover continues, the company fears “serious and lasting consequences,” Asubonteng said.

“Illegal miners have been looting large quantities of high-grade gold-bearing material for more than two months. In the process they are causing significant damage to critical infrastructure,” Asubonteng said.

At a press conference, Koney implored the Ghanaian government to flush out the illegal miners and restore investor confidence to attract needed investment in mining, NewsGhana reported.

Illegal mining isn’t limited to Ghana. South Africa has about 6,000 mines that companies have abandoned as profits nosedived, Mail&Guardian reported in November.

The mines attract up to 30,000 illegal miners – known as zama zamas — (Zulu for “those who try their luck”) — who descend the ageing shafts and wells, sometimes living for months underground digging for gold.

Illegal mining is dangerous and it’s getting worse, with armed gangs that kidnap rival miners and force them to work in slave-like conditions underground, according to the South African Human Rights Commission, a national institution designed to protect human rights.

“Police are too afraid to come here,” said a security guard, speaking anonymously at the Grootvlei mine in Springs, 30 kilometers east of Johannesburg.

Five illegal miners were killed there in September by gangs fighting to control the mines, Mail&Guardian reported. “Bullets were flying. I called the police but they only came in the morning to pick up the bodies,” the security guard said.

Who owns the gold?

AngloGold says it’s at an advanced stage of a feasibility study to determine the long-term prospects for Ghana’s Obuasi mine, and whether it can restart production.

Illegal miners have caused significant damage there to critical infrastructure as they looted large quantities of high-grade, gold-bearing material over the course of the last two months, Asubonteng said.

AngloGold partnered with Randgold Resources to revive Obuasi, but Randgold pulled out of the project in December. The century-old mine has not turned a profit for more than a decade and needs heavy investment during a commodity price slump.

“Even though we have a lot of confidence in the potential of Obuasi, what is happening now (with illegal mining) certainly goes to fundamentally undermine that confidence in our ability to turn a world class resource into a world class mine,” Asubonteng said, according to BusinessDayLive.

The recent increase in illegal mining and violence against licensed mining companies had caused insecurity and fear among investors in the mining sector, NewsGhana reported.

“It is regrettable that the beacon of mining in Africa will suffer this fate at a time of a downturn in the industry,” Koney said. “Countries globally are encouraging investment in exploration and development of mines in anticipation of an upturn.”