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AngloGold’s woes killing Obuasi economy – Group

  • SOURCE: | qwesa2big
  • anglogoldA group at Obuasi, known as ‘Obuasi Must Live Coalition’ has outlined some “critical issues affecting the development of the Obuasi Municipality,” with a call on government to make some interventions to save livelihoods in the area.

    The group said, among conditions contributing to declining economic conditions in the area, was the decision of AngloGold Ashanti to retrench more than 80% of its staff.

    The group added that the company’s decision to suspend the redevelopment of the Obuasi mine, following an encroachment by illegal miners on its concession that led to disturbances, causing the death of Communication Manager John Owusu, had led to a dire economic situation in the municipality for which reason urgent action was required.

    The group made some demands, saying: “Government should come clear on measures it has taken to make this 60 per cent available to small scale miners operating on AngloGold Ashanti’s concession. The Obuasi Municipal Assembly, working with the small scale miners should take advantage of AGA’s (AngloGold Ashanti’s) offer of free technical support to develop the relinquished concession.”

    The statement is published below:


    Dear Ladies and Gentlemen of the press: good morning. I am glad you could join us today for this important press conference. I am particularly grateful to those of you who travelled from Kumasi and other places to be with us.

    Ladies and Gentlemen, for some time now Obuasi has been in the news, sadly for the wrong reasons. First it was the decision of AngloGold Ashanti, a multinational mining company that has operated the Obuasi concession since 1897, to put the mine under what they described as “care and maintenance”. Under this programme, the company significantly downsized its operations, including the laying off of more than 80 percent of its staff. The significant economic and social impacts of this decision are still being felt today. Obuasi has virtually become a ghost town as a result of this action of the company.

    Then just when we were getting over this tragedy another unfortunate news hit us in the face. A group of small scale miners had invaded some sensitive areas of the mine. When some management personnel of the company and a group of journalists went to that site, they were pelted with stones and other objects and in their haste to run away the Communications Manager of the company, Mr. John Owusu tragically lost his life. This rather avoidable tragedy led to a heightened state of insecurity in the city. The result is that the company evacuated its staff and suspended production. This suspension also means that the company’s planned programme to redevelop the Obuasi mine has suffered a setback. The longer this suspension stays, the direr the situation in the Municipality gets.

    Ladies and Gentlemen: it is unfortunate that the current problem of the mine has been portrayed as a conflict between AGA and small scale miners. Permit me to stress that it is possible to have a thriving AngloGold Ashanti mine, and a booming legally registered and regulated small scale mining industry. There is no reason for conflict between the two. It is in light of this that we find the invasion of sensitive areas of AGA’s concession by small scale miners unacceptable. For more than five years civil society campaigned vigorously for AGA to relinquish part of their huge concession to the government which will then be required to give them out to small scale miners. Just a couple of months ago, this wish was granted, with government approving AGA’s plan to relinquish 60 percent of its concession. We are reliably informed that the company has magnanimously offered to provide technical and equipment support to small scale miners who form cooperatives to take advantage of the 60 percent of the concession that has been relinquished.

    It is disappointing that in spite of the obvious invasion of the company’s concession by small scale miners, both the Municipal and Regional Security Councils have not thought it expedient to swiftly order security personnel to move in and secure this concession. Our checks indicate that the company has met the Ashanti Regional Security Council on several occasions to impress upon them the need to order the military to move in and save the situation. Sadly these appeals have fallen on deaf ears. It has become apparent that in their desire to satisfy a group of small scale miners, the RCC is unconsciously killing the very hen that lay the golden egg. We cannot as a country support small scale mining at the expense of the survival of AngloGold Ashanti. Both AGA and small scale miners should be allowed to coexist peacefully. We the people of Obuasi will not forgive anybody who does not take the necessary steps to restore this Obuasi mine. Let me repeat for the sake of emphasis: we will NEVER forgive anybody whose actions and inactions will lead to the collapse of the Obuasi mine. There is so much at stake. This is not about settling political scores. It is about the survival of Obuasi. The Obuasi some of us call home.

    Ladies and Gentlemen: AGA by default has become the lifeblood of the five main districts where its concessions reach. Like a giant octopus, its tentacles reach everywhere. Every business in these areas is connected one way or the other to the mine. Private schools rely on the fortunes of the mine for enrolment. Hospitals rely on the mine. Traders at the various markets look forward to the end of each month so that they can boost their sales. The Obuasi Municipal Assembly also generates more than 500,000 cedis annually in property taxes alone from AngloGold Ashanti, making up more than 70 percent of all property taxes collected within the municipality. Additionally, between 2007 and 2013 AGA’s property tax constituted 11 percent of the Municipal Assembly’s total revenues collected. Mineral royalty paid by the company have over the years become one of the most significant and assured sources of revenue to the Municipal Assembly. For instance in 2012, the share of AGA’s mineral royalty that came to the Municipal Assembly was 570,787 cedis. Overall, mineral revenue, mostly contributed by AGA constituted more than 19 percent of total revenues of the Municipal Assembly between 2007 and 2013. This shows a certain level of dependence of the Municipal Assembly on mineral revenues (royalty and property tax). AGA further expended about 24 million dollars to execute various corporate social responsibility interventions in its catchment area. One of these interventions is the award winning Malaria Control Programme (MCP) that led to a 70 percent reduction in malaria cases at the Municipality’s major health facilities. At the national level, the income tax paid by the thousands of workers who used to work in the mines as well as their social security contributions supported national development.

    Ladies and Gentlemen: a company as old as AngloGold Ashanti will certainly have its own challenges. These challenges are mostly a carryover from an era where there was weak regulation of the mining industry in Ghana. This resulted in some of the notable environmental and social problems that Obuasi is noted for. These legacy problems are however being addressed, though not as quickly as we want.

    Do we in the face of the development challenges that are evident in the Obuasi Municipality therefore conclude that AGA is irrelevant? It will
    be the height of hypocrisy, ignorance and sheer wickedness for anybody to assume that suffocating AGA to death will necessarily lead to a change in the fortunes of the Municipality.

    Ladies and Gentlemen: the current state of insecurity on the mine does not benefit any of the sides. AngloGold Ashanti has lost valuable production times, leading to loss of millions of dollars of potential revenue. The small scale miners have also become subjects of scorn and contempt within the municipality. The Obuasi Municipal Assembly and the other four district assemblies have also lost substantial revenue. The nation has substantially lost potential revenue. But more seriously the situation is dimming our credibility as an investor friendly country. The recent decision by Randgold to walk out of a deal with AngloGold Ashanti to develop Obuasi speaks volumes.

    Ladies and Gentlemen, we proceed to make the following demands:

    1. The Minerals Commission has disclosed that it has approved AGA’s decision to relinquish 60 percent of its concession. Government should come clear on measures it has taken to make this 60 percent available to small scale miners operating on AngloGold Ashanti’s concession. The Obuasi Municipal Assembly, working with the small scale miners should take advantage of AGA’s offer of free technical support to develop this relinquished concession.

    2. Furthermore we call on government, through the Regional Security Council to order the military to provide security for AngloGold Ashanti so that they can resume their operations without let or hindrance. The current situation where the military is only guarding shafts is not the best.

    3. We further call on AngloGold Ashanti to immediately publish their revised concession of 40 percent which they have kept. This will enable members of the general public to help them police this concession.

    4. We also call on both AngloGold Ashanti and the small scale miners to resort to dialogue as the only sustainable means of ensuring a peaceful co-existence among them. Overall, we expect Obuasi to be the winner.

    Distinguished ladies and gentlemen: we expect that Obuasi’s fortunes will be turned around. We call on all residents of this beautiful city to join us in our campaign to save this city. Obuasi must not die. #obuasimustlive.

    Thank you and God bless you!


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