Small-scale mining in Ghana: The government and the galamsey

This paper argues that the current formalization system for small-scale gold miners in Ghana has been undermined and the small-scale mining laws no longer capture the reality of the sector’s activities. The paper will examine the small-scale mining system and shows that registered and unregistered actors operate not only in parallel but are actually intertwined and highly dependent on one another. The paper shows that the perceived dichotomy of formal and informal actors in the sector does not actually exist. The sector has instead evolved into a highly intertwined group of semi-formal sectors operating with varying degrees of legal registrations. The paper concludes that political leniency and law enforcement corruption has resulted in a booming small-scale gold system under poor government control. The paper recommends that politicians move to enact reforms to regularize the small-scale mining sector and curtail ubiquitous environmental and occupational safety problems. Anti-corruption initiatives and law enforcement reforms are the most urgent. However, reforming the laws is also necessary to capture and regulate the technological innovations the sector is currently using.     

The investment climate for gold mining

This analysis compares the gold mining industry investment climate in the USA to the investment climate in Australia. These two major gold producing nation's industries share many similarities; in both the USA and Australia, there is evidence of a maturing gold mining industry. Each country has experienced a dramatic increase in gold production and, more recently, greater mining of refractory ore and development of more underground operations. In the 1980s both nations experienced a pronounced rationalization trend that consolidated some gold producing operations and eliminated others. Each country commands a disproportionately large share of exploration expenditures. Land access, a major concern in the USA, has also become a critical issue in Australia as well. For all their similarities, however, the two countries have differences that are significant enough to influence mining company investment decisions. This paper explores those differences and how they may affect the future course of these nations' gold mining industries. Both effective government policy making and corporate strategic planning will occupy a major role in the future course of the two nations' gold mining industries .     

Linkages in Ghana's gold mining industry: Challenging the enclave thesis

By 2009, Ghana was the second-ranked African producer after South Africa, and had become the world's ninth largest producer of gold, at some 3.8% of global production, up from 2.6% five years earlier. Gold production volumes and revenues rose significantly over the decade from 2000. Yet gold mining tends to be perceived negatively in Ghana, and is seen as providing far less than it should in terms of public revenue, employment, skills development and spillovers, and localised economic development. Gold mining is often depicted as having an enclave status, disconnected and isolated from the rest of the economy. In contrast, the research findings here demonstrate that after a period of strong investment and growth, gold mining can no longer be viewed as an enclave activity: it is in fact more deeply linked into the Ghanaian economy than hitherto understood, through a set of as yet under-researched but promising economic linkages, notably backward linkages, which can potentially be strengthened by policy and support measures.     

The regional impacts of small-scale gold mining in Amazonia

Gold mining is the major economic activity in the Upper Tapajós River Basin of the Brazilian Amazon. This article studies the structure, economy and impacts of gold mining operations in this region. Mining has significant environmental impacts in this region resulting in the removal of approximately 67 million m³ of sub-soil per year and accompanied by an annual release of some 12 tons of mercury to air, ground and rivers. In the early 1990s there were 245 mines in operation, employing some 30000 people and producing around 35t gold per year, valued at approximately $400 million yr^-1, the profits being about $110 million yr^-1. Miners spent most of their earnings on local goods and services, while mine owners and merchants in the gold towns invested in land (mainly for ranching), business ventures and money markets. Wealth gained from mining has served as an engine for development in other regions of the world and could, theoretically, achieve the same for Amazonia. However, before this could happen, the Government of Brazil would need to mark a strong presence in the area by providing technical assistance and developing and enforcing mining/environmental regulations. The likelihood of such a development materializing in the foreseeable future is small. In the meantime, gold mining acts, not as an 'engine for development', but as a destabilizing force — provoking environmental damage, social discord and public health hazards in the region.     

Corporate social responsibility in the mining industry: Perspectives from stakeholder groups in Argentina

Since the liberalisation of its investment regime in the 1990s, Argentina has seen a rise in foreign direct investment into large-scale exploration and exploitation of mineral resources. However, many social groups (local communities, grassroots movement and the church) often strongly oppose new mining projects on the grounds of environmental, ethical and economic concerns. In a situation marked by widespread conflict, mining companies continue operating and develop Corporate Social Responsibility (CSR) initiatives which are often promoted as a means of contributing to the sustainability and development of the nation. The paper develops a framework to highlight how the principles of stakeholder theory could be used as conceptual and practical guidance for conflict-resolution oriented CSR policies. The framework is further used to analyse two case studies of conflictive mining projects in Argentina. The paper explores how key stakeholders perceive contribution of CSR to welfare and the socio-economic development of mining communities and sustainable development of the nation. It demonstrates that institutional and social stakeholder networks often strongly oppose the idea of voluntary self-regulation implied by CSR in situations characterised by weak governance. Even though the CSR of companies could be improved in areas of corporate communication, transparency, stakeholder engagement and dialogue, it is not seen as a panacea for the social conflicts in the sector.     

Multiple scales of diamond mining in Akwatia,Ghana: addressing environmental and human development impact

Ghana is the second largest producer of gold in sub-Saharan Africa, and has experienced a significant increase in national mining production over the last two decades. Between 1983 and 1998, the mining industry brought approximately US $4 billion in foreign direct investment to Ghana. While large-scale gold mining has seen a significant increase, artisanal gold and diamond mining product have grown exponentially. While much research has been conducted on gold mining in Ghana, there is relatively little research on the environmental and human development consequences of diamond mining in the country. Unlike other West African countries such as Sierra Leonne and Liberia, small-scale diamond mining in Ghana has not been linked to conflict but its role in development has also been relatively modest. This paper examines large and small-scale mining in Ghana's largest diamond mining town, Akwatia, and their relative impact on environmental degradation, health, and the livelihood of artisanal miners. We conclude that while an increase in artisanal diamond mining has been a means of employement and income-generation for small-scale miners, there are some human development challenges, related to environmental burden from land degradation and health. GCD is an ailing mining company in Ghana, in desperate need of an injection of capital to keep the mine alive, but botched bidding has slowed the process of de-regulating the company. We also conclude that the de-regulation of GCD may lead to a relatively reduced environmental burden in Akwatia and more revenue for the GCD to invest in the human development needs of communities in the town.     

Australian gold exploration 1976–2003

The Australian gold industry has grown enormously over the past 25 years. Australian mine production of gold in 2003 was 284 t, similar to that of the USA, and behind South Africa, the world's largest gold-producing nation. Gold is Australia's third largest commodity export, worth an estimated A$5.3 billion in 2003–2004.Underpinning the industry is a solid resource base that has grown by successful exploration over the past three decades. Australia ranks third in the world after South Africa and the USA in terms of its economic gold resources. The growth in Australia's gold resources has been underpinned by high levels of exploration and innovations in gold processing technologies, specifically the development of carbon-based gold extraction methods that allowed commercial treatment of low grade ores. It has been supported by advances in gold exploration methods, especially exploration geochemistry.New resources were added at existing deposits and new deposits were found, including several of world class (>100 t contained gold), in each decade over the 25-year-period but resource growth since the 1990s has been dominated by brownfields additions rather than new discoveries. Average costs of discovery have now plateauxed at around A$20–25/oz, after falling sharply during the early to mid-1990s when a number of new discoveries were made, notably in the Yandal belt in Western Australia and the Lachlan Fold Belt in New South Wales. Current gold reserve/production and gold EDR/production ratios are 12 and 19 years, respectively, and indicate that the long-term future of the Australian gold industry depends on continued high levels of exploration and the discovery of new deposits to replace mines that are currently being depleted.     

Ranking countries for minerals exploration

This paper presents the results of a survey of multinational mining companies pertaining to the ranking of countries for non-fuel minerals exploration in the early 1990s. It ranks countries in order of greatest exploration interest in the early 1990s, as well as countries that have geologic potential but unacceptable investment climates. It provides a list of priority commodities for exploration, the criteria for exploration levels, critical and negotiable factors in selecting countries for exploration, and the investment climate ratings of countries where exploration is probable in the early 1990s. The results of the survey indicate that major minerals exploration activities are concentrated in a small number of countries. Political and economic reforms around the world should increase the number of countries receiving active private sector minerals exploration in the 1990s.     

Could a public ecology approach help resolve the mountaintop mining controversy?

In recent years, controversy has grown around decisions related to mountaintop removal mining of coal in Central Appalachia, USA. While this mining method can be particularly efficient, it necessitates removal and relocation of huge volumes of earth—permanently altering the natural landform and potentially impacting local environments and communities. Current decision-making systems and regulatory frameworks have been largely ineffective at incorporating the values and concerns of stakeholders. This is due, in part, to contradicting policies, a legacy of distrust, and problems related to scale. Further, the lack of good civic science related to mountaintop mining and meaningful routes for public involvement have also hampered effective decision-making. We propose that the fundamental concepts of public ecology may provide a progressive approach to resolving these complex issues, and examine the challenges that must be met along the way.     

How can public–private partnerships contribute to security and human rights policy and practice in the extractive industries? A case study of The Democratic Republic of Congo (DRC)

Across sub-Saharan Africa, the presence of foreign large-scale mining companies is increasing. This is in part a result of depleting resources in countries such as Canada, United States and Australia, and in part from a more favorable national mine investment climate in several mineral-rich African countries. Their increased presence raises important questions around the potential role and function of Corporate Social Responsibility (CSR) in the sector. In post-conflict and/or fragile states, CSR has further implications for conflict and risk mitigation strategies to ensure the protection of human rights. One CSR approach increasingly being considered is the public–private partnership, whereby companies, public donors, and development agencies leverage their relationships for mutual benefit. There is merit in exploring its function in post-conflict fragile states, where socio-economic needs are high and the capacity of the state to respond to a variety of mine governance challenges is limited. Two case studies from the Democratic Republic of Congo (DRC) are presented, and their policy implications, discussed.     

Dynamics of state mining enterprises during the 1980s and the outlook for the 1990s

This paper examines the evolution of the control by the state of mining and smelting from 1975 to 1989. In 1950, there was little state-owned mining capacity outside the centrally planned economies. A wave of nationalizations of mine assets swept over the developing countries in the late 1960s and early 1970s. State control continued to rise, in developing countries as well as in the developed market economy countries, until the mid-1980s, when the trend reversed. At present some 20% of Western world mineral production is state controlled. The level of control is highest for those minerals mined mainly in the developing countries, and lowest for those minerals mined mainly in the developed market economy countries. The current trend is toward privatization of state-owned mining enterprises in developed countries and it is expected that as the 1990s progress, privatization of such enterprises will also begin to take place in developing countries.     

Exploring the origins of ‘social license to operate’ in the mining sector: Perspectives from governance and sustainability theories

In the mining sector, local communities have emerged as particularly important governance actors. Conventional approaches to mineral development no longer suffice for these communities, which have demanded a greater share of benefits and increased involvement in decision making. These trends have been spurred by the growth of the sustainable development paradigm and governance shifts that have increasingly transferred governing authority towards non-state actors. Accordingly, there is now widespread recognition that mineral developers need to gain a ‘social license to operate’ (SLO) from local communities in order to avoid potentially costly conflict and exposure to social risks. A social license can be considered to exist when a mining project is seen as having the ongoing approval and broad acceptance of society to conduct its activities. Due to the concept's relatively recent emergence, however, only a limited body of scholarship has developed around SLO. Drawing on examples from northern Canada, this paper uses governance and sustainability theories to conceptualize the origins of SLO in the mining sector and describe some of the associated implications. Further research is needed to determine governance arrangements which help facilitate establishment of SLO in different mineral development contexts.     

How have reforms fuelled the expansion of artisanal mining? Evidence from sub-Saharan Africa

This paper investigates whether and how World Bank mining sector reforms have fuelled the expansion of illegal artisanal mining activity in Sub-Saharan Africa. In doing so, the analysis examines three issues. First, the emerging correlation between reforms and poverty, mainly a result of increased unemployment caused by Structural Adjustment Programmes and concurrent privatisation of state-owned enterprises, is explored. Second, the possibility that reform of large-scale mining has decreased available land for peasant farming as well as legalised small-scale mining activity is discussed. Finally, the notion that the regularisation of informal mining activities has been an exceedingly bureaucratic procedure in Africa, therefore providing individuals with little incentive to operate within the legal domain, is examined. Faced with few employment prospects, a growing number of Africans are pursuing employment in the artisanal mining sector, a worrying prospect given its intimate association with environmental degradation and HIV/AIDS.     

Beyond the resource curse? Diamond mining,development and post-conflict reconstruction in Sierra Leone

In recent years, the so-called ‘resource curse’ syndrome has gained increasing currency. Growing evidence suggests that many African countries with significant natural wealth have actually reaped limited rewards, instead experiencing underdevelopment, corruption, political instability, and in some cases, violent conflict. In the small West African state of Sierra Leone, it has been suggested that diamonds played a key role in fuelling a brutal civil war during the 1990s, an issue that has given rise to a burgeoning literature on ‘blood diamonds’. However, as Sierra Leone emerges from a decade of destruction, other research suggests that diamonds could actually provide the impetus for post-war reconstruction. This paper explores the role of alluvial diamond mining in post-conflict Sierra Leone, focusing on two communities in the Eastern Province that were badly affected by the war. Drawing on field-based research conducted between 2002 and 2007, the paper considers the diamond mining situation in the context of broader development strategies in post-conflict reconstruction. It is argued that sustainable development can only be achieved if future policies are based on a detailed understanding of relationships between diamond mining and rural development at local, regional and national levels.     

Chinese resource security policies and the restructuring of the Asia-Pacific iron ore market

This paper reviews the restructuring of the Asia-Pacific iron ore market in the wake of the rise of the Chinese steel industry. Prior to the 2000s, this market was characterised by two key features—high firm-level concentration on both the producer and consumer sides, and price determination through annually negotiated benchmark pricing between Australian mining and Japanese steel firms. However, owing to rapid growth in the Chinese steel industry and its emergence as the region's principal iron ore consumer, the Asia-Pacific iron ore market has been dramatically restructured during the last decade. This process has been accelerated since 2005 by Chinese governmental resource security policies, which have sought to address current record high iron ore prices through the use of foreign investment to sponsor new market entrants and the formation of an import cartel amongst the Chinese steel firms. This paper evaluates how these policies have driven restructuring in the Asia-Pacific iron ore market, through an analysis of the growth of China's steel industry, Chinese resource security policies aimed at lowering iron ore import costs, and their effects upon the regional market's ownership structure and price determination mechanisms. It argues that while Chinese investment and cartelisation policies have catalysed significant changes to the ownership and pricing structures of the Asia-Pacific iron ore market, they have carried only mixed benefits for the Chinese steel industry's resource security.     

Is there a Dutch disease in Botswana?

The Dutch disease is regularly evoked in the resource curse literature and remains a frequent explanation for the poor economic performance found in many resource-rich countries. Given Botswana's high rate of per capita GDP growth, it might seem superfluous at first glance to ask whether or not there is a Dutch disease in Botswana. Yet, Botswana merits study here both as a significant potential exception to any posited inevitability of the Dutch disease and also because the debate on whether or not Botswana has avoided the Dutch disease is far less settled than is indicated by its economic growth record. Botswana currently suffers from many of the symptoms of the Dutch disease but not for the causal reasons posited in the Dutch disease model. Indeed, many of the explanations for the lack of diversification found in Botswana's mineral-dependent economy have nothing to do with either diamond revenues or the Dutch disease. Botswana has done about as well managing its resource wealth as could realistically be expected but it is unlikely to succeed in diversifying its economy away from diamonds anytime soon.     

A review of the PGM industry,deposit models and exploration practices: Implications for Australia's PGM potential

Australia is prospective for platinum group metal (PGM) mineralisation (in particular primary magmatic reef, primary magmatic by-product, late magmatic and hydrothermal, and alluvial placer type) but its known PGM endowment is negligible compared to that of South Africa, Russia, the USA and Canada. Most Australian PGM projects are operated by mid-cap or junior companies and form part of larger, more diverse project portfolios held by these explorers. Most projects were ‘hot’ while market conditions were favourable. However, as other metals became ‘fashionable’ and market conditions for PGM changed, so did the focus of these companies. Pure PGM companies are rare in Australia. The search for and development of PGM-only deposits in Australia are high risk business activities. No new primary PGM deposits have been discovered since the mid to late 1980s and none of the significant deposits that were discovered or evaluated in the 1980s have been mined. This review suggests that at least several A$10 million but more likely several A$100 million were sunk into PGM exploration and development projects but none advanced to the mining stage. The viability of Australian PGM projects is very sensitive to (1) metal prices, (2) the US$/A$ exchange rate, and (3) large capital expenditure requirements relative to the small size of Australian PGM-only deposits. Most PGM-only projects were initiated at times of high PGM prices. However, advanced exploration, feasibility studies and project development always lagged behind the price booms. South Africa, Russia and Canada contain approximately 98% of the known global PGM reserves. This situation has a very negative effect on the Australian PGM industry as the well-endowed nations continue to receive the lion's share of exploration spend and new projects.     

Green accounting and sustainability of the Peruvian metal mining sector

This paper estimates the true economic income of Peru’s metal mining sector for the period 1992–2006, using a model of green economic income based on Hamilton (2000). The total depletion of natural capital caused by metal mining is calculated by estimating, on the one hand, the depreciation of mining resources (using the Hotelling rent approach) and, on the other, the environmental degradation provoked by metal mining activities. The results show that the total loss of natural capital represents between 31% and 51% of the metal mining GDP and between 2% and 4.9% of Peru’s GDP. On the other hand, correcting the usual GDP measure produced by the traditional National Account System (NAS) for the total loss of natural capital caused by mining activities shows that the GDP traditional measure overestimated by 51–64% the true economic income generated by Peruvian's metal mining sector during the period 1992–2006. The importance of the generation, taxation, and disposition of mining economic rents for Peru’s sustainable development in the future is also discussed.     

Regional development benefits of mineral projects

This paper discusses the development impact of mining and mineral processing on the regions in which they are located. The discussion is organized so as to be of relevance for policy formulation in resource-rich developing countries which consider the exploitation of their mineral wealth. The hypothesis is that mining technology, interpreted in a broad sense, has undergone a profound change since 1900. In consequence, experiences of mineralbased regional development in the industrialized countries around the turn of the century are of little relevance to the Third World in the 1980s. Contemporary mineral ventures have very weak regional development repercussions in the absence of forceful policies specifically directed towards the regional development goal.     

Public preferences for timeliness and quality of mine site rehabilitation. The case of bauxite mining in Western Australia

Government departments that regulate environmental management for mining have a range of choices about the timing and quality of rehabilitation. Economic theory suggests that the cost incurred by firms should relate to the social cost of the environmental damage, however, there has been little work done on non-market values for mine rehabilitation. This study uses choice modelling to assess these issues for bauxite mining in state owned native forest in south-west Australia. The results show that the public place a relatively high value on the re-creation of vertebrate habitat and would prefer in situ mine rehabilitation over environmental offsets. Alcoa's current rehabilitation practices appear to be supported by the preferences revealed in this study.