The Problem with Gold Mining in Ghana
China continues to seek out rare mineral resources in Africa to supply the country’s ever-growing consumption needs. By 2011, China’s investment in Africa’s mining industry had grown twenty-five times from 2011, reaching figures of $15.6 billion.
As the world’s largest user of natural resources, the country lacks “sufficient domestic natural resources”, according to a paper published by the School of Oriental and African Studies at The University of London. This lack of sufficient domestic natural resources – caused by China depleting its own mineral resources – “has driven China to invest overseas in low and middle income countries in Asia, Africa and Latin America,” the paper says.
Their goal is “to access natural resources such as energy and minerals, to access new markets and to create employment overseas for Chinese workers,” writes Dr Frauke Urban.
China’s Economy and Gold
In 2013, the Ghanaian government raided many small-scale gold mining farms all over the country. Mining farms and equipment were burned, and 5,000 Chinese workers were deported. The Ghanaian government claimed that these workers were illegal, under the Small-Scale Gold Mining Act of 1989. One Chinese investor, however, claimed that the Chinese workers filled in the correct immigration paperwork.
Today, Ghana still operates many gold mines run by Chinese investors. According to Mining.com, “the Government of China empowered and encouraged a number of domestic state-owned and private companies to actively pursue mining deals throughout the world.”
In 2012, for example, China’s biggest gold producer – state-owned China National Gold – reportedly planned to buy a stake in African Barrick Gold (ABG), Tanzania’s largest gold producer.
A stake in ABG would have enabled China National Gold to meet record-breaking demand for gold in China at the time.
“China continues to drain global gold inventory,” Bullionstar reported in 2015. In total, 2102 metric tonnes of gold were withdrawn from the Shanghai Gold Exchange (SGE) in 2014, the SGE being the best indicator for Chinese wholesale demand.
By 2017, China remains the largest producer of gold in the world, mining 440 metric tonnes in 2017. However, China’s gold production has decreased, because of what is suspected to be increased environmental regulations.
In global resource and energy politics, underdeveloped nations often bear the environmental costs of mining.
“The emergence of China as a global player challenges the pre-existing dominance of the OECD (The Organisation for Economic Co-operation and Development) countries and will continue to be a crucial force for global change in coming decades,” Dr Urban writes. “The implications of China’s rise will be most significant for low- and middle-income countries (LMICs), but the outcomes will also affect the understanding of the process of development.”
Gold mines built by Chinese investors have destroyed water bodies in the heart of Ghana, Africa’s second-largest gold producer. River pollution caused by digging up the surrounding land areas have led to deforestation, dying fish and undrinkable water. Some rivers have dried out completely, and deforestation has impoverished many local farmers.
Despite the massive environmental consequences, “many youth from remote villages have found work in the gold mines.” Many of these “youths” are children and teenagers.
“The Chinese mines are quite often a community’s biggest employer, but there is an environmental cost,” Aljazeera reported in 2016.
Ghana’s Unsustainable Mining Practices
Local farmers have claimed that the Ghanaian government allows the miners to do as they please.
When Ghana signed the 2013 Minamata Convention on Mercury at the UN General Assembly, the country aimed to minimize exposure of mercury to its population. Despite this, many small-scale mining operations continue to use mercury when mining gold.
Children and teenagers who work at these small-scale mining sites “handle the liquid metal with their bare hands.”
The metal also affects people who live near the sites “through drinking water and fish consumption.”
Likewise, “neurological disorders are associated with mercury poisoning, and it is particularly harmful to pregnant women.”
In the month of April, 2019, Ghana earned $1,391,020,000 in exports, led by gold, which represents 48.7% of Ghana’s total exports. Ghana’s top import origins are China, the United States, India, Belgium, Luxembourg and the United Kingdom.
There is no official data on how much (if any) revenue the Ghanaian government receives from Chinese mining companies.