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Informal Mining in Ghana

China’s gold rush: firms exploiting Ghanaian resources

Last Monday China Africa News gained its first TV exposure commenting on the informal mining sector in Ghana and Chinese involvement there. The report focuses on the poor working conditions provided by Chinese companies, and the lack of added value for local communities.You can find the link 

The issue that the report focuses on is of Chinese companies employing Africans. However only some of the operations include Chinese investment, and the relationship is not exactly as expected. Despite dangerous working conditions and poor support for the surrounding communities government and local authorities have turned a blind eye to the issue.

Informal mining has a long history in Ghana, and historically was a very amateur process. Gradually the demand for heavy machinery has brought Chinese players into the market who have financed these small but highly organised operations. It is important to note that these operations are Ghanaian in nature, but have cooperated with Chinese actors in order to organise and grow.

This type of mining offers very little return to the Ghanaian state, which gains no tax from these operations, and must deal with the poor environmental and employment practices of the firms. Large mining companies are desperate to stamp it out, but the government also has very little will to effect change as it is nervous of being branded as protecting international investors against local smallholders.

As the report demonstrated there are many who lose out locally in these arrangements. Some lose land, while others are mistreated. The local government is often paid off by the organisations. Property rights are inadequately enshrined in Ghanaian law meaning that without local government support, it is easy to lose one’s land.

It is interesting to view this story within the context of U.S. Secretary of State Hillary Clinton’s comments this week. While her comments were taken out of context somewhat, Clinton mentioned China within a context of neocolonialism which was immediately referenced in the press as a direct accusation. However I feel it is important to distinguish between the Chinese state and Chinese individuals.

While Beijing may have no intention of admitting it, the government can not control its 1.3bn people. The majority of criticism of China’s behaviour in Africa relates to these small privateers. What is interesting is that the zeitgeist of China in Africa makes a story out of informal mining in Ghana, when in fact informal mining is continent wide and often has much more negative wider effects.

Mining in the northern DRC is enormously profitable but is run by quasi-military operations for whom workers rights and environmental care are meaningless. While these operations in Ghana are worthy of our concern, we must also question why it is news. Impressive growth and resource wealth in Africa has created an increased intensity of interest in Africa.

China is just one of the countries looking to expand its reach in Africa. Until recently Chinese trade with Africa was still smaller than its trade with South Korea. China is often criticised for grabbing land in Africa for agricultural investment, but the gulf states have been much more active here.
The Chinese state is unlikely to try to limit this type of informal interaction while the local government does nothing itself. However if the Ghanaian state was to put pressure on Beijing to help stop the flow of Chinese businesses operating in informal mining, Beijing would likely act. China is engaged in Africa to secure its long term resource security. This involves building relationships with governments rather than neocolonial asset stripping. Beijing would gladly sacrifice the fortunes of a few Chinese individuals for the favour of the State and the long term oil contracts that might bring.

Beijing is amenable to pressure from African governments. However in order for African problems to be solved, the impetus must be African.

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