Newmont prepares mining operations in Ghana forest reserve

21 June 2008

As Newmont, the world's largest mining company prepares for gold mining operations in Ghana, civil society groups challenge the purported benefits for local communities. Meanwhile, the International Finance Corporation (IFC) has come under fire for the environmental and social legacies of its gold mining investments in Ghana and its plans proceed to begin the next phase of Newmont's controversial Ahafo gold project.

Ghana’s Minister for Mines, Lands, & Forestry, Esther Obeng Dappah, announced in early June that Newmont/Ghana Gold, the local branch of one of the biggest mining corporations in the world, was expected to get a permit to start gold mining operations in the Akyem forest by the end of 2008.

Civil society reacted negatively to the announcement, saying that it pre-empts a scheduled public forum on July 4, which is to bring together Newmont/Ghana Gold and other stakeholders.

“With such a decision already taken it is worthless for the people to even continue with the public forum since the outcome will not have any effect on the decision by government to give the concession to Newmont,” said Daniel Owusu-Koranteng, Executive Director of Wassa Association of Communities Affected by Mining (WACAM).

According to Ghana’s Public Agenda, Owusu-Koranteng also noted that the announcement follows closely on Dapaah’s public acknowledgement at the May meeting of UNCTAD in Accra that Ghana had benefited only minimally from decades of mining.

Dapaah promised that mining in Akyem would provide jobs and economic development to the local community. She also took credit for getting the company to agree to compensate farmers for lost crops and pay annual rent to local landowners. Owusu-Koranteng, however, said that the affected communities should negotiate arrangements directly with the company, as provided for under Ghanaian law.

WACAM has also raised concerns that mining in Akyem would have negative impacts on a significant regional watershed and could lead to the loss of cultural and historic sites. The mine would include substantial portions of land falling in the Ajenua Bepo forest reserve.

Two hundred fifteen local farmers petitioned the government earlier this year to deny Newmont/Ghana Gold a license to operate in Akyem.

Newmont has said it expects to invest more than $700 million in Akyem, and projects that it could produce 7 million ounces of gold annually for the next 15 years.

Newmont/Ghana Gold is the company behind the Ahafo gold mining project, also in Ghana, a project with substantial financing from the World Bank’s private sector arm, the International Finance Corporation (IFC). Ahafo has been controversial for dislocating some 10,000 farmers so far, and possibly another 10,000 in the near future as Newmont prepares the second phase of the project. It is not clear if Newmont will seek IFC participation in the Akyem project, but the company anticipates using common processing facilities for both projects.

Questions around the environmental and social legacies in Ghana’s gold mining communities, particularly in IFC-backed projects, have also arisen of late. Last year, the IFC sold its shares in the Iduapriem gold project to AngloGold, the mine operator, at an unknown but likely substantial profit after 17 years of involvement. As Ghanaian and international observers note in a recent publication, the project has led to the destruction of large tracts of agricultural land as well as serious declines in access to and the quality of drinking water for local communities. The IFC maintains that once it has sold its shares, it has no further responsibility for the impacts of a project - a position many civil society activists and even some within the World Bank Group believe requires re-thinking. The IFC’s decision to divest from the project despite serious ongoing concerns suggests the need for greater accountability and openness from the institution in proving the development benefits of its investments.

WACAM has also received attention in the Ghanaian press recently for its arguments that the country’s expanding mining sector is causing serious damage to its agricultural potential, a serious problem in light of the current food crisis affecting Ghana and much of Africa. They note that 30% of the country’s surface area has been assigned to companies as mining concessions. WACAM was speaking out, in part, in response to the Ghana Chamber of Mines’ commemoration of its 80th anniversary with the heavy-handed – and dubious – slogan, “Life without mining is impossible.”

Resources

• Newmont to invest more than 700 million dollars in Akyem Project, Ghana News Agency, April 22, 2008 (Kessben FM website) 
• Mining is Killing Agricultural Sector Says Wacam, by Selorm Amevor, Public Agenda, June 6, 2008 (AllAfrica website)
• Newmont Gets Green Light to Mine in Forest, Public Agenda, June 13, 2008 (AllAfrica website)
• Newmont to get permit for Akyem Concession, Ghana News Agency, June 11, 2008 (Modern Ghana website)
• Anglogold accused of discharging raw sewage into water bodies at Teberebie, Ghana News Agency, April 15, 2008 (Ghanaweb)
• Ghana: Iduapriem gold mine, financed by the World Bank, pollutes water and cuts off farmers from their lands, FoodFirst Information and Action Network, April 15, 2008 (FIAN website)