MAC/20: Mines and Communities

Ghana: two sides to a critical coin

Published by MAC on 2008-02-28

Ghana: two sides to a critical coin

28th February 2008

Paul Mitchell, president of the pro-industry International Council on Mining and Metals (ICMM), recently addressed a meeting in Ghana where he defended mining's contribution to improving lives at a community level, but blamed the government for its failure to announce the fact.

Earlier this week, too, AngloGoldAshanti - Africa's biggest gold miner, bemoaned the fate allegedly experienced at the hands of "illegal" smallscale miners - posing the possibiity it might have to close down and quit. [see: "Swamped by illegal miners, AngloGold Ghana gold mine under threat", Mineweb, 26 February 2008].

Now, a major community oganisation from Ghana's Western Region has sought to set the record straight.

Ghana: Payment of Compensation to Affected Mining Communities

Ghanaian Chronicle (Accra)

28th February 2008

Alhaji Kofi Mensah, Accra

A NUMBER of Journalists and media personnel who recently attended a national workshop on Mining and Human Rights Abuses organized by Wassa Association of Communities Affected by Mining (WACAM) at Tarkwa in the Western Region could not believe their eyes at some of the hardships, including environmental and health problems the operations of mining companies are exerting on the mining communities.

What is fundamentally clear and sad is that it appears the affected communities had over the years struggled to get these companies listen to some of their problems, but to no avail. Communities like Prestea, Chuja, Dumasi, Teberebe and others have documented some of their problems arising out of the effects of mining operations, some since 1999 but the problems continue to exist. They include taken over of active and other farmlands, blasting resulting in cracked buildings, air and water pollution, uncovered pits facilitating the bleeding of mosquitoes, noise pollution and what have you.


Residents of Dumasi, for example in their document presented to the Journalists blamed Golden Star Bogoso/Prestea "for operating in the community with impunity for the past years, extracting gold with little regard to the environment, health and the well-being of the local people."

The residents maintained that for the second time in two years, cyanide from the Bogoso Gold Limited's new tailings dam washed into the Ajoo stream, the only stream left in the community. "The deadly chemical killed fish, crabs and lobsters and polluted the stream, which is the source of drinking water for the Dumasi community and its environs".

Mining, particularly gold mining has been with this country since 1890's in the areas of Tarkwa, Obuasi, Konongo and Prestea but the associated problems still persist and even worsened in our time where the availability of an enhanced mining regulatory framework coupled with favourable conditions have attracted many multi-national companies to the country and are either prospecting for or mining for gold in most parts of the country.

Arguably, the mining sector can best be seen as making substantial contributions to the country's economy, including the payment of royalties, taxes and the offer of employment to the people. But it must be added that the gains the sector is making is not reflective of the state of the economy of the country.

Michael Ross, looking at the 'extractive sector and the poor' in 2001 indicated that "most of the world's mineral-dependent States are concentrated on Sub-Saharan Africa and an initial assessment suggests that the economies of these countries are not performing well". He continued "Twelve of the world's most mineral -dependent States including Ghana and six of the world's 25 most oil-dependent States are classified by the World Bank as highly Indebted Poor Countries".

Ross's statement is factually perfect as apart from the economies of the country, the people in mining communities, day in day out, are being impoverished by the operations of mining companies through the destruction of their food and cash crops and the pollution of their water bodies and their forests.


Dr. Richard Cellarius, an international Vice President of the Sierra Club, the United States ' oldest and largest grassroots environmental organization says "mining companies have a long way to go to become responsible corporate citizens". He puts it clearer "I continue to receive almost daily, reports of mining disasters, ecosystem damage, drinking water and fisheries poisoned by pollution and tailing, and indigenous communities evicted by hired gunmen or government authorities. There is also the problem of abandoned sites and waterways polluted by past mining activities".

Dr. Cellarius continued that while mining companies could do things to improve their operations, many if not most of the companies carry on with their "business as usual, with some governments also tolerating or even supporting bad mining practices because they wanted the revenue".

And so most mining communities in the country through fear have exchanged their rights and freedom to good health, education, free speech for bad treatment, all in the name of gold mining. Apart from the visible environmental degradation resulting in extensive pollutions and destruction of farms and farmlands, what is more serious and constitute huge human rights abuse is the way community members whose farm crops including cocoa and other cash crops are destroyed are paid compensation.


It is disheartening to hear that a cocoa farmer who could have lived for long, ensure the proper education of his children and other family members through revenue accrued from the farm wakes up one day to see his cocoa farm destroyed and compensated only to become poorer after few years and die. All because most mining companies play on the ignorance of the mining communities in the payment of compensations, and thereby pay any amount without coming into agreement with the farmer concerned.

Article 73 (3) of the Minerals and Mining Act of 2006, Act 703 states " The amount of compensation payable under sub-section (1) shall be determined by agreement between the parties but if the parties are unable to reach an agreement as to the amount of compensation, the matter shall be referred by either party to the Minster who shall, in consultation with the Government agency responsible for land valuation and subject to this Act, determine the compensation payable by the holder of the mineral rights".

Section 74 (1) which deals with the compensation principles, clearly explains that the compensation to which an owner or lawful occupier may be entitled may include compensation for:

(a) Deprivation of the use or a particular use of the natural surface of the land or part of the land, (b) Lose of or damage to immovable properties, (c) In the case of land under cultivation, loss of earnings or sustenance suffered by the owner or lawful occupier, having due regard to the nature of their interest in the land. (d) Lose of expected income, depending on the nature of crops on the land and their LIFE expectancy.

Unfortunately, our cherished farmers in the mining communities get their cocoa and other crops destroyed and had to struggle for inadequate compensation because of their ignorance as far as these compensation principles are concerned, coupled with the desire of the mining companies to cheat them. A case in point about compensation difficulties confronting mining communities is what is happening at Teberebe where poor farmers are demanding their fair share in compensation at the law courts.

The mining companies, knowing very well the monetary value of what a cocoa tree can produce in a season and its economic lifespan of 40 to 50 years, shamefully develop their own calculations and pay peanut to the cocoa farmer as compensation with no regard to the life expectancy of the crop, as well as the Minerals and Mining Act.

Professor Kasim Kasanga in his paper on 'Land Resource Management For Agricultural Development In Ghana' at the 38th anniversary Public Lecture and Symposia of the Ghana Academy of Arts and Sciences in 1997 summed it all when he stated " cocoa is as important as gold, if not more important. Cocoa is a long yielding investment, lasting between 40 and 50 years. Cocoa farms are inter-planted with food crops to feed farmers. Even though there is some slash and burning, the environmental damage is negligible in comparison with surface mining. Some cocoa farmers who are victims of surface mining operations in the Dunkwa-on-Offin area are being offered nine thousand cedis per three. A mature cocoa tree is capable of yielding half a bag of cocoa beans and farmers are currently being paid 112,500 cedis per bag of cocoa (ie 62 kg). In effect a farmer, who is offered 9,000 cedis for a lost tree, could obtain 55,250 cedis from that tree for just one season and the returns to this cocoa tree could last for between 40 and 50 years. The gross injustice to these helpless village farmers is clear. If a free society cannot help the majority who are poor, it cannot save the few who are rich".


Currently, cocoa farmers are paid little for a cocoa tree destroyed and yet mining companies make a lot of newspaper publication for compensations paid to farmers with the view to enhancing their corporate image whilst the companies know they are rather impoverishing poor farmers. A GNA story carried by Times in its 15th October 2007 issue and headlined "Newmont Akyem Compensates 27 farmers" sends a positive picture that the company had been humane to the affected farmers. Newmont was said to have presented a cheque for GH 25, 000 cedis (250,000,000 cedis) to the 27 farmers whose farmlands were affected by its operations, and that the highest beneficiary had GH 7, 000 cedis (70, 000, 000 cedis) against the background of a mining company that pays around 70,000 cedis for a destroyed cocoa tree which has the potential of yielding at least 120, 000 cedis each year for over 40 years.

Indeed, the issue of compensation payment to farmers in mining communities must be seen as a national issue since it is one source where mining companies are abusing the communities' right to survival.

Indeed, WACAM has started the struggle of making mining companies operate in a more responsible manner that will reduce the abuses on the environment and low compensation payments by gradually empowering the mining communities through workshops, advocacy programmes and education to enable them to press home for their rights and freedoms as citizens of the country.

WACAM, with support from other human rights organizations are actually working to liberate mining communities from the bondage of mining companies and they needed to be encouraged and supported by all.

Ghana: Mining Companies Turn the Heat on Govt

by Selorm Amevor, Agenda (Accra)

22nd February 2008 Agenda (Accra)

The President of the International Council on Mining and Metals (ICMM), Mr. Paul Mitchell has pointed out that the underdevelopment in many mining communities in the country could partly be laid at the door steps of present and past governments.

According to him the cumbersome nature of the country's decentralizing system, regarding the disbursement of royalties and taxes paid by mining companies to government is a major factor for the underdevelopment of these communities.

"Currently in Ghana it takes long periods for central government to release funds to the district assemblies to embark on their developmental programs and the unfortunate part is by the time it gets to the Assembly level part of the money gets lost in transit amount," he added.

He was of the view that even though government over the years has done well by providing stable conditions to attract direct foreign investments, the lack of transparency and the cumbersome system of transferring money to the communities is making it difficult for people to appreciate the role of mining in the socio-economic development of the nation.

He therefore called on the government to rationalize the present system to ensure that district assemblies and traditional rulers also have a significant proportion of funds from royalties to develop their communities.

The President of ICMM said it is significant for people to appreciate that mining companies are not direct agents of development in their countries of operations, but a major way of contributing to the economies is through the timely payment of taxes and royalties to government.

The President of ICMM made the point in an interview at a workshop organized by the Ghana Chamber of Mines which brought all stakeholders in the mining industry together in Accra.

Mr. Mitchell said "it is significant for people to appreciate the fact that the mining industry has contributed significantly to the country's economy."

He said some practices such as the Corporate Social Responsibility programmes which sees companies building up schools, providing water and scholarships to mining communities, apart from paying royalties is the norm in global business.

According to him, the ICMM as part of its efforts to ensure transparency makes it mandatory for its members to abide by the Extractive Industry Review Initiative (EIRI) which makes it a necessity for companies to publish the royalties and taxes they pay to government.

He urged government to as matter of transparency make efforts in publishing for public knowledge the funds accruing from taxes and royalties from the activities of mining in the country.

According to him the government's inability to publish the funds received from the mining companies and the amount disbursed to the local level is making it difficult for many people to appreciate the developmental projects embarked on with funds from the companies.

"Many of the communities are of the view that any developmental project that comes into the community is from funds from the central government even when it might be from mining companies."

He was also of the view that the cumbersome decentralized system in the country makes it even more prudent for government to publish the amount they receive from the companies so that the local authorities will also have a fair idea of what to expect from them.

Dr. Nii Moi Thompson, an Economist, agreed with the ICMM President, expressing disappointment that the government finds it difficult to release funds for development in mining communities.

According to him, the government instead of releasing funds to develop the communities uses the money to engage in fruitless activities that do not benefit the entire populace.

"The issue is not about mining not contributing to the socio-economic development of the nation, it is about central government not utilizing the funds effectively; after all why can't we make Obuasi like Johannesburg in South Africa," he enquired.


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