HomeCampus NewsIs illegal gold mining affecting Ghana’s overall production of Gold?

Is illegal gold mining affecting Ghana’s overall production of Gold?

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Ernest Gyeduhttps://hypercitigh.com
Ernest Gyedu also known as Fantasma is a Socio economic data analyst who also has knowledge in Geospatial analysis. He is a hardworking goal driven and determind young lad who holds the portfolio of co-founder and managing director of hypercitigh media group.
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Ghana’s place on the 2020 World Gold Chart has been deemed unsatisfactory by a cross-section of the populace, especially with China retaining its place as one of the world’s top producers of the mineral.

Source: Ghana Chamber of Mines (Facebook)

Even though the West African country climbed to sixth, ahead of South Africa, its people do not consider it as an achievement worth celebrating.

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They have raised questions as to why the country, formerly called the Gold Coast, whilst a British Colony is not producing enough of the mineral to be the world’s leader.

Ghanaians believe that illegal gold mining, popularly referred to as ‘galamsey’ in local palance, is to blame for the country’s mishap.

Some of these assertions were made online after the Ghana Chamber of Mines released the 10 leading gold-producing countries for 2020.

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Reports from several online news publications sought to draw a link between illegal gold mining in Ghana and the country’s performance on the world’s list of major gold producers.

Indeed, the impact of illegal gold mining on the country cannot be overemphasized.

“While illegal mining supports livelihoods, it has caused severe damage to the environment. It is blamed for destruction of farmlands and pollution of water bodies. It also denies the state revenue: an estimated $2.3 billion in 2016,” parts of an article co-authored with Senyo Dotsey and Sebastian Paalo, PhD researcher, School of Political Science and International Studies, University of Queensland (Australia), and published on www.theconversation.com reads

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But really, does the effects of galamsey extend to Ghana’s gold production?

If illegal mining is to be stopped, will the country’s volumes of the material increase?

How is galamsey affecting Ghana’s gold production?

The Director of Communications for Small-Scale Miners, Abdul Razak Alhassan, says that the effect of illegal gold may not influence the quantity of gold the country produces.

He has told Dubawa that illegal mining in the country cannot be the reason for Ghana’s inability to be the world’s leading producer of Ghana.

“Illegal mining is something we can discuss but not the cause of Ghana not being number one on the chart when it comes to leading producers of gold,” he said.

He added that Chinese were involved in gold mining activities across Africa, hence, it is quite wrong for Ghana to be the only country to be singled out by persons who hold the assertion that the presence of the Chinese was affecting the country’s gold production.

Abdul Alhassan says China’s rank on the 2020 leading gold producers chart is a reflection of their investment in the mining industry globally.

“If China is the leading gold producer, it means they have invested in the mining industry and they have invested in both their countries and other countries when it comes to gold. It is a fact that since colonial times, Ghanaian indigenes do not invest in its mining industries and most of the gold mining companies in Ghana are owned by foreigners. They invest in the mining companies and give the country just a token of the gross. It was 3% but now 5% of the gross. If we, Ghanaians, were investing in that sector and taking about 60% – 90%, it would have been a different ball game altogether, but if we do not channel our investment into that sector we will always have a minute percentage from the foreign companies,” he told Dubawa in an interview.

What should be done if the country wants to increase its gold production?

The government, at several times, announced policies geared at promoting growth of the mining sector.

In 2018, the then Deputy Minister for Lands and Natural Resources, Barbara Oteng Gyasi, said that the government was in the process of instituting policies aimed at restructuring the mining sector.

Concerning illegal mining, she only reiterated the government’s commitment to fighting the menace.

In the 2019 Mining in Africa Africa Country Investment Guide (MACIG), it was said that even though Ghana has led the way in gold mining and still holds first place in West Africa for gold production, “the country’s high tax burden has stalled many exploration projects and deterred new investors, leading to a lack of greenfield exploration.”

It added that “the country’s skew towards large companies with underground mines and brownfield exploration focus goes hand-in-hand with a mining code that favors companies with larger investment power.”

In the Magazine, President of the Ghana Chamber of Mines, Sulemanu Koney, was quizzed on how the country’s mining industry was taking shape in terms of investment and potential diversification and growth.

He is quoted to have said that “we see a lot of brownfield expansion and rebuilding of mines, but it would be beneficial to see an increase in greenfield investment in Ghana.”

He also said that there was a need for the country to attract more investment.

“Because of the high levels of resource exploitation and challenges in the fiscal regime, Ghana’s attractiveness is waning in comparison to neighboring countries and it is important for the country to reposition itself,”  Sulemanu Koney is quoted to have said.

Abdul Razak Alhassan of the Small Scale Miners in Ghana believes that the country’s fortunes in gold production can change if there is more investment in the sector.

An article published on oxfordbusinessgroup.com seems to agree with Mr. Alhassan, stating that recent investments had boosted production of the resource in the country.

“Ghana is one of the world’s top-10 gold producers and the second-largest in Africa. As such, the mining industry is a major economic driving force: it is the biggest single contributor to government revenues and a leading source of export earnings. A wave of investments in recent years has boosted production and improved cost efficiency in gold and manganese mining,”

But how did China become the World’s leading producer of Gold?

The Asian country has since 2007 led the world chart in the production of gold when it overtook South Africa.

The World Gold Council, in a 2018 report, explained that China’s “exploration and production is spread across 3,389 gold mining areas, managed by around 400 gold mining companies.

Within this group, the top 13 account for the lion’s share of production, taking 59.77% and 41.04% of finished gold and total mined gold output, respectively. And the top four – China National Gold Group (‘China Gold’), Shandong Gold, Zijin Mining Group and Shandong Zhaojin Group – are dominant.”

The report added that “there is an increased focus across the industry on identifying quality assets, not just domestically but internationally too. Leveraging its position as “the largest gold smelter in the world,” the industry is actively seeking international partnerships and joint ventures.

This outward focus stems partly from an increased recognition of the benefits to be gained from cooperation with overseas peers, but it also reflects the role of gold within China’s “Belt and Road” (B&R) initiative.

For the Asian country to maximise its potential, it was suggested that “mining companies should drive exploration, increase investment in mining assets and cultivate existing resources to improve reserves and ensure the sustainable development of the industry more broadly.

Conclusion

Ghana’s production is hinged on investment. Should there be more local investments in the industry, such additional investment, according to experts, is sure to boost the country’s gold production. Illegal mining is definitely having a toll on the country but with discussions on how to increase Ghana’s gold production, the focus must be on more local investments.

This report was produced under the Dubawa Student Fact-checking Project aimed at offering students in tertiary schools aspiring to take up roles in the profession the opportunity to acquire real-world experience through verification and fact-checking. 



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