Illegal gold mining in the firing line  ⛏️🧈 💎

Illegal gold mining in the firing line ⛏️🧈 💎

#energy and natural resources
The sentencing of a Chinese illegal gold miner in Ghana highlights a variety of efforts by African governments to curb activities linked to tax avoidance, environmental degradation and worse.

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Countries across the continent are moving to quash illegal gold mining, using a variety of methods including formalising the sector, applying more stringent legal processes and even resorting to military intervention, with a Ghanaian court recently sentencing a Chinese national to prison for illegal gold mining,

“The court in the capital, Accra, sentenced Aisha Huang to four and a half years imprisonment and a fine of 48,000 Ghanaian cedis ($4,000) for running an illegal mining operation,” Reuters reported of the sentencing on December 4, which brought an end to a trial that started in 2017.

Ghana is the 10th largest gold producer in the world, according to a 2023 report by Metal Focus and the country expanded production by 32% in 2022, according to the Ghana Chamber of Commerce.

German research firm Statista said gold contributed nearly 7.8 billion Ghanaian cedis (US$1.3 billion) to the economy in 2020. However, illegal mining remains a challenge, depriving the country of substantial economic revenues, with spillover effects being felt in other vital sectors such as cocoa farming, forests, and freshwater systems.

Collins Acheamong, a Ghanaian water resources analyst, explained that illegal small-scale miners often use mercury and other toxic chemicals to extract gold, a process which contaminates freshwater systems.

"Another concern is its impact on food security. Miners often destroy crops and forests in search of gold. This can reduce the amount of land available for agriculture," he explained.

Industry leaders including Ghanaian entrepreneurs believe the recent ruling, while long overdue, is a step in the right direction in dealing with illegal gold mining in the country.

Felix Brako, a minerals sector entrepreneur at the Phoaks Minerals Consult, an Accra-based precious metals trading company, said the ruling was welcome.

 “The devastation caused by the Chinese in Ghana is massive,” he said.

"Per the current laws, punishment should be at least 20 years. The charges brought up against her were until 2017, before the revision of the law, and as such, the law can't have retrospective effect. Hence, it warranted the four years given," he explained, highlighting calls for an even longer penalty for the suspect.

Beyond the economic benefits of curbing illegal gold mining, there are also safety concerns. Unregulated mining activity has in the past led to the collapse of mines, with informal miners losing their lives or being left with crippling injuries.

Ghana has convicted multiple illegal miners in recent months.

According to GhanaWeb, a Tarkwa Circuit Court in October jailed 25 illegal miners to a combined 340 years in prison and an additional US US$210,000 in cash penalties for illegal mining.

An earlier news item by GhanaWeb published in September details how a different group of six illegal miners from Ankobra in the Prestea Huni-Valley Municipality were sentenced to 120 years in prison by the same Tarkwa Circuit Court.

In March 2023 state broadcaster, Ghana News Agency, reported that around 12 Chinese nationals were being tried in the Asante Bekwai Circuit Court for their involvement in illegal gold mining.

These recent arrests and convictions confirm renewed momentum in Ghana to curb illegal gold mining and related activities. Other top gold mining countries are also implementing strategies to contain illegal mining activities.

In South Africa, some 3,000 military personnel have been deployed in a crackdown on illegal miners, the government announced in late November. More than 30 illegal miners died from a methane explosion in South Africa's Free State province in May.

The army-led crackdown has resulted in the arrest and detention of hundreds of illegal miners in recent weeks.

A 2023 World Bank advisory report on potential ways to improve the Rainbow Nation's economic prospects suggests crime syndicates associated with illegal mining cost the country up to 10% of its GDP.

In Mali, recent developments suggest a keen intention from the administration to increase revenues from resource extraction. In August, the junta-led West African country passed a new mining code that, according to Agence France Press (AFP), allows the state to take up to 30 per cent stakes in new mineral projects. Part of the plan is to engage cooperatives in artisanal and small-scale gold mining - a proactive way of stamping out illicit activities by informal miners. 

Initiatives like these appear to have worked elsewhere. According to Zimbabwe's Minister of Mines and Mining Development, Soda Zhemu, artisanal and small-scale miners now generate over 50% of the nation's gold, after the country took steps to formalise illicit miners by offering ownership schemes and validating claims.

A 2020 Tax Justice Network Africa report showed that the continent lost approximately US$40 billion linked to illicit financial flows in the extractive sectors, of which 77% emanated from gold, 12% from diamonds, 6% from platinum, and 5% from other extractive commodities.

“We're hoping her incarceration will have an effect, no matter how small,” Brako explained.

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