Quest for gold in African mud

Tens of thousands of Chinese are making millions from mining in Ghana, but success comes at a high price - death, robbery and angry accusations

PUBLISHED : Thursday, 06 June, 2013, 12:00am
UPDATED : Thursday, 06 June, 2013, 3:50am

A gold rush in the resource-rich west African country of Ghana, led by an estimated 50,000 Chinese prospectors, is threatening to turn nasty amid allegations of illegal mining and escalating ethnic tensions.

The Ghanaian government launched a campaign to fight illegal mining last year, blaming Chinese miners for environmental degradation and millions of dollars in lost revenue.

Many of the prospectors have left Ghana in the past few months as tensions have risen, saying they feel helpless and angry, and accusing Beijing of failing to protect their interests.

Su Zhenyu , secretary general of the Chinese Mining Association in Ghana, said last month: "Our representatives had a meeting with a team made up of officials from the Chinese embassy in Ghana and high-ranking officials from our hometown.

"We just felt depressed. When we needed help and backup from our country, what our officials tried to do was to sacrifice us for diplomatic face. If we were illegal and mining in the wrong way in Ghana, we want our government to help us be legal and act right, not simply abandon us in trouble. We have invested huge amounts here and it's impossible for us to quit."

More than 50,000 Chinese gold miners, two thirds of them from villages in the impoverished county of Shanglin in Guangxi , says Su, have poured into Ghana since 2005.

Su said Chinese miners had invested many billions of yuan, with each of the 2,000 gold mines they were operating costing 3 million yuan (HK$3.8 million).

Ghana's Minerals Commission said gold production rose 17 per cent last year to 4.2 million ounces, with prices averaging more than US$1,600 an ounce.

"We contribute a great deal to Ghana's gold exports," Su said. "If each of the 2,000 gold mines operated by the Chinese produces 50 grams [1.76 ounces] of gold a day and works 20 days a month, that would be 24 million grams [24 tonnes] a year. And we sell almost all of it to the official Precious Minerals Marketing Company."

When the Shanglin villagers arrived in Ghana, the larger sites suitable for hard-rock gold mining had already been snapped up by international corporations, so they focused instead on setting up small mines, many on farmland near rivers.

Wen Daijin, from Shuitaizhuang village in Mingliang township who has just returned home after a year in Ghana, said most of the young men from Mingliang and the neighbouring towns of Xiangxian and Dafeng had been lured to Ghana after hearing tales of the sudden wealth that could be made.

"There are about 180 households in our village and more than 100 young men are in Ghana," the 24-year-old said. "Many borrow money from local banks and relatives to go there. In my township, only men with physical problems don't have plans to go to Ghana.

"Ghana is full of gold and opportunities. The investment threshold to join the gold club is about 3 million yuan and you'd recruit about five or six fellow villagers from Shanglin you could trust and who could take care of each other in a foreign land.

"You need at least one excavator to dig sand and rocks, some trucks and two high-powered sand pumping machines to dredge for alluvial gold. The pumps are a special design, produced in our hometown."

Wen said he had decided to return home because of a recent crackdown by the Ghanaian authorities and a surge in robberies of Chinese miners. Two other miners from Shuitaizhuang village were shot dead in Ghana in April.

Another Shanglin resident, Wen Yonghua, said his elder brother, younger brother and a cousin had been given loans by rural credit co-operatives and set off for Ghana last year.

"My brother borrowed 400,000 yuan and my cousin 100,000 yuan," he said. "It's so easy to find a guarantor if you just say you're going to Ghana."

After arriving with equipment and Chinese workers, experienced gold miners from Shanglin would look for farmland near rivers that had potential.

Du Chengbao, 38, from Xiangxian township, who has also returned home from Ghana, said the specially designed pumps and their experience were "the secret weapons of Shanglin men". "We could see through the crops and shrubs and detect gold underground by observing the landscape, riverbeds and the colour and stickiness of the earth," he said.

"We would pay the owner of the farmland between 20,000 and 30,000 new cedi [HK$77,000 to HK$116,000] for land-use rights to about 25 acres [10 hectares] of farmland. We also need to pay compensation for land planted with crops and trees, about 3,000 new cedi an acre for shrubs and 9,000 new cedi for cocoa.

"Besides that, we also have to turn in 15 per cent of our gains to local chiefs, who usually hold the permit required for mining in their community. We also would hire local people to work and pay them a salary three or four times higher than the local level.

"And then we would depend on luck and see how much gold the site could produce."

Du went to Ghana in October 2011 and started working at a site in Dunkwa, a gold-producing centre in Ghana's central region.

"The land could produce about 300 grams of gold each day," Du said. "And, 300 grams per day is just an average level. Some get lucky and produce up to 1kg a day, some only 30 to 50 grams, while others produce nothing."

After theirs costs, including diesel fuel and labour, were deducted, Du and his partners were left with more than 200 grams of gold a day. "The work and life is difficult in Ghana. I got yellow fever, but I did make money."

Like most Shanglin gold miners, Du sent his profits back to his family in China. A young man could only earn about 1,000 yuan a month in Shanglin, but he could easily make 10 times more in Ghana.

The 21st Century Business Herald said that in a two-week period in May and June 2011, a billion yuan was sent to Shanglin by villagers working abroad. It said the county government's total revenue last year was just over 300 million yuan.

Villagers in Shanglin love to repeat tales of the fortunes made in Ghana: one miner returned home with a gold bar as a gift for a relative; another ordered a Ferrari over the phone from Hong Kong airport while transferring to a flight home.

China is one of Ghana's most important trading partners, with exports of electronics, telecommunications and power equipment and textiles. In turn, China imports from Ghana crude oil, cocoa, cotton, gold, timber and industrial diamonds.

But the Chinese government has mainly focused on helping big state-owned enterprises in Ghana, with few guidelines or much effort to help or regulate the tens of thousands of Chinese who have travelled there to seek their fortunes. Those fortunes took a sharp turn for the worse late last year when Ghanaian police and immigration officials launched a joint crackdown on foreigners, mostly Chinese, working in small mines.

The Africa Review news website reported on May 16 that the Ghanaian president, John Mahama, had set up a team to combat illegal gold and diamond mining.

Section 83 of Ghana's Mining and Minerals Act says that only Ghanaian citizens can hold small-scale mining licences.

A Ghanaian university student said in an online chat room: "The illegal mining operators often use a Chinese-made machine, which they use to suck up the mud from river beds. This stirs up the waters and destroys aquatic life. Dead shellfish lining the riverbanks are clear evidence of its effects."

Chinese miners have also been accused of worsening corruption, with several high-profile cases of police and immigration officials being involved in extortion and bribe-taking linked to illegal Chinese mining having been exposed recently. Resentment towards Chinese is widespread, with frequent attacks by Ghanaians on increasingly heavily armed Chinese miners.

"We had to buy shotguns to defend ourselves from rampant robbery by the locals," Du said.

On April 16, two Chinese men were shot dead by robbers at their mine in the Subin region, and Su said another was killed on May 27 in Obuasi.

In the wake of the increasing violence, the Chinese embassy in Accra urged citizens to obey Ghanaian laws and be vigilant about security risks.

Su said: "We are eager for help and backup from the Chinese government to negotiate with Ghana, but the Chinese embassy in Ghana told us they don't have enough staff. And we have no channel to reach the authorities in Beijing."

Wen Yonghua said the Chinese miners in Ghana had been left to their own devices.

"We can only rescue ourselves," he said. "Those who are well-educated businessmen have built up a team to lobby Ghana's Ministry of Lands and Natural Resources, while the rest, knowing little English, hide in the forest with shotguns."

The foreign ministry in Beijing said yesterday that it sent diplomats to visit those detained in Ghana and requested Accra's officials to ensure the legal rights of the arrested Chinese. But it also reminded Chinese citizens not to engage illegal activities in Ghana.