The Golden Crisis: Ghanaian miners face job losses

The Golden Crisis: Ghanaian miners face job losses

A mining site in Ghana

Editor’s Note: Golden Crisis is a two-part documentary about how local mining communities are bearing the brunt of falling gold prices on the world market. Joy FM’s Kwaku Owusu Peprah has been touring these mining communities to speak to mine workers and locals on job cuts and declines in their local economies

It’s a rainy Sunday morning and Berchie blinks his tears away as he speaks of a future, bleak and dark as the clouds which hang over his head. He’s lived in the Ghanaian mining town of Obuasi working with a multinational mining company there. He and dozens others have lost their jobs. Their hopes and those of dependents shattered.

“I have been working with this company for three months. I was entering the premises of the company one fateful day when my access code was rejected. I was given a letter by the security man which said my contract has been terminated. When I opened the letter, I discovered that my contract was no more.

“I never thought I was going to be fired and thought the security man would give me a new code so I could enter the premises to work. So I was shocked when I read the letter. In fact, one of my colleagues collapsed when he read his letter of dismissal because he did not expect it.

The Gold mining industry across the globe is in crisis, a dreadful situation which will lead to nearly 4000 permanent job cuts.

In the latest edition of Joy FM’s Hotline documentary, Kwaku Owusu Peprah explores how the fall in the price of gold is affecting the mine worker, mine host communities and Ghana’s economy.

Berchie is just one of the thousands of people who have already lost their jobs because with gold prices falling and the high cost of mining operations, mining companies have started cutting cost in order to stay in business.

Gold peaked at 1,791 US dollars per ounce in October 2012 but has seen a decline since January this year.

“Initially we tried to see whether this was just a sudden reduction or it’s something that’s going to have a long-term future. In our situation now most of the analysts are very bearish about the next two years, they’re not very confident about people going to buy more gold in the next two years,” that’s according to Dr Tony Aubyn is the Chief Executive officer of the Ghana Chamber of Mines.

Gold mining companies are recording huge losses; elsewhere some big companies have canceled, delayed, or closed mines and put assets up for sale. In Ghana for example, Newmont alone, plans to lay off 30 – 40% of exploration staff. Several supplier contracts have been canceled.

Gold in itself is just a heavy metal but the difference between gold and other metals is that people cherish it so much and prefer to store their wealth in Gold rather than in cash or stocks.

Mine host communities are also suffering under the unbearable weight of the international gold price fall. Under the current circumstance mining communities like Obuase, Dunkwa, Bibiani,Tarkwa, Bogoso Prestia will be worst affected.

Nsuta Mbease, a small mine town in the Prestia Huni Valley district of the Western Region, is a good example of how exactly remote settlements in mining communities benefit from the operations of the mines at their doorstep.

At Nsuta Mbease, Golden Star Resources limited is the large scale mining company which operates here – the company has a corporate social responsibility program of paying one dollar per ounce of gold mined to the communities within the concession area. The company’s Prestia south project has suffered a major setback because the EPA has delayed in conducting a public hearing in the community for the mine operation to commence, a delay which hurts the mines and a community which relies heavily on the mine.

Interestingly, galamsey or illegal small miners also bear the ruthless cost of the fall in the price of gold. After days of risking their lives in the dangerous pits around, they sell their gold which is amalgamated with mercury found to be hazardous to their health and the environment to pedestrian Gold dealers.

Critics of the mining sector have said that mining has destroyed our environment and made host communities poorer as the livelihoods of many farmers have been affected.

According to the Gold Fields Mineral Survey, Ghana was the 8th leading producer of gold in the world as its output increased to 96.8 tonnes.

The sector voluntarily contributes an amount of about GH¢ 26 million to its host communities and the general public. It is the number one tax payer and highest contributor to collections by the Ghana Revenue Authority. It’s also the leading source of Foreign Director Investment in the Ghana.

However, these facts are changing quickly as mining firms earn less for every ounce of gold produced at a very high cost.

Click to listen to the full documentary. The second part airs on Thursday August 15.