Gold mine too close for comfort for Ghana town

Gold mine too close for comfort for Ghana town

By Orla Ryan, Reuters

6th December 2005

PRESTEA, Ghana

Ghana's Ashanti gold belt has a centuries-old mining tradition but a pit operated by a U.S.-based company may be too close for comfort for one town.

Where Prestea town ends, the Bogoso gold mine begins, a degree of proximity which is straining the relationship between the community and Bogoso Gold Limited (BGL), a subsidiary of Colorado-based Golden Star Resources.

The mine's presence has forced the relocation of the police station, the post office, the labour office and the town's only fuel station. The hospital overlooks the mine.

Residents say daily blasts from the pit have cracked buildings and wrecked electrical appliances. Some fear the dust could create health problems.

"It is injurious to our health ... it has left so many buildings cracked while personal belongings, TVs, fridges, they were all destroyed," says Kwesi Blay of the Concerned Citizens Association of Prestea, which says the town should be moved.

The dispute highlights the often tense relationships that exist in mineral-rich developing countries between mining companies and the poor communities in which they operate.

These strains are compounded in Prestea by high unemployment, disputed compensation claims from locals and some 5,000 illegal miners who want to work the concession themselves.

Ghana's Environmental Protection Agency (EPA) says the town does not need to be resettled.

But in September it ordered the mining company to temporarily stop work at its Plant-North pit until it had relocated the police station, built a bypass road and put a fence around the mining site.

The company completed these requirements and resumed mining at the pit in early November.

"LEARNING A LESSON"

"The complaints from the Prestea township were so serious, there was nothing we could do but stop them (temporarily)," EPA spokesman William Abaidoo said.

"When you move close to a settlement, you are bound to get problems; when you are blasting, the noise and vibration alone creates some panic. Among some people, it is like an earthquake," he added.

Abaidoo said BGL, which is 90 percent owned by Golden Star, was "learning a lesson". The Ghanaian government holds the remaining 10 percent of BGL.

Prestea is the site of Golden Star's largest mine in Ghana and it is forecast to produce 130,000 ounces of gold this year. That production would have topped 140,000 ounces had it not been for the brief closure, company officials say.

The company also has another mine in Ghana's Ashanti gold belt, Wassa, which will produce about 80,000 ounces this year. It is also preparing an environmental plan to start mining near another settlement, Bondaye.

Bruce Higson-Smith, BGL's acting general manager, admits there have been problems: "A few people dropped the ball, we got things done, (but) it had already incensed the EPA."

He said the complaints about the effects of the mine blasts were exaggerated and added the company had changed the pattern of blasting to reduce noise and vibration.

With mining in the town set to continue until June or July next year, he said he met regularly with community leaders.

The mining company's labour relations have also reflected the strained ties with the wider community.

In November, about 100 protesting workers surrounded the company's offices, trapping managers inside overnight in a dispute about bonuses which delayed work for a day.

The company says talks with unions are continuing.

But the question of compensation claims demanded by some Prestea residents for damage to their persons and property remains a thorny issue.

PIT INVASIONS

Two years ago, Daniel Bekoe says he fell 20 feet and hurt his head when his balcony collapsed beneath him while blasting at the Bogoso mine was taking place.

His claim for damages was still being assessed. "They asked me to write an application for medical assistance, then they asked me to write another application," he said.

The mine's management said it was analyzing numerous claims of damages to try to weed out genuine claims from false ones.

"We are absolutely going to take responsibility for damage we caused but at the same time, there are a number of people taking advantage," Higson-Smith said.

Local tensions have been aggravated by the job losses which followed Golden Star's 2002 joint venture with ailing Prestea Gold Resources, which held the license for the underground mine and owed its 2,000 staff five months in back pay.

BGL now employs 221 people and is assessing whether to restart the underground mine at the site. But it says this is unlikely to create more than a few hundred extra jobs.

Meanwhile, an estimated 5,000 illegal miners -- or "galamsey" as they are locally known -- eke out a living with their own small-scale mining, often on BGL's concession.

"We get pit invasions on a nightly basis ... stealing our ore," Higson-Smith said. "Under the laws of Ghana, any gold is BGLs. Getting action to get rid of them is proving to be a difficult thing," he added.

In huts sheltered by tarpaulins just outside of Prestea, illegal miners dig pits and haul out rock which may contain strains of gold.

While residents' associations have called for stronger mining laws, EPA's mining director Anthony Andoh says that if BGL had conformed to the terms of its permit, problems would not have arisen.

"Bogoso should be a good corporate citizen and learn how to respond to people's problems." he said.