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Opinions of Monday, 30 September 2019

Columnist: Jeremy Luedi

Galamsey in Ghana and China's illegal gold rush

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Some 50,000 Chinese migrants have flocked to Ghana to stake their claim in the country’s illegal gold mining rush with dire environmental, economic, and social consequences.

Just the Basics

1. Ghana’s tradition of artisanal gold mining and the gold price boom which began in 2007 led tens of thousands of Chinese migrants to seek their fortunes in Ghana

2. Bringing heavy machinery, illegal Chinese gold miners precipitated economic and social instability as well as increases in gun violence, drug trafficking and corruption

3. Ghana is working hard to fight against illegal mining - or galamsey - but widespread corruption has hamstrung government efforts

Three, two, one, breach! Ghanaian soldiers smash down the door to a ramshackle, single-story building in a rural mining community. As security forces pour into the dimly lit room, a dozen illegal gold miners scramble for the exits as the soldiers close in. The room is soon a cacophony of voices, with the English of the soldiers mixing with the Cantonese of the miners. The group of miners is quickly rounded up and led out of the building to waiting military vehicles, just one of many groups of illegal miners being rounded up across Ghana.

Despite the efforts of the Ghanaian government, these raids barely dent the number - some 50,000 - of irregular Chinese migrants that have traveled to Ghana in recent years, spurred by sky high gold prices and lured by Ghana’s unprotected mineral wealth. The narrative of Chinese involvement in Africa is typically portrayed as a top-down one in which state owned firms monopolize the limelight. The phenomenon of illegal artisanal mining - known as galamsey, derived from the phrase “gather them and sell” - in Ghana demonstrates the collective impact of individual Chinese migrants.

Such are the concerns about Chinese miners in Ghana that Ghana’s leader, President Nana Akufo-Addo spoke to Nikkei Asian Review in January 2019, stating that “Ghana and China have a strong relationship; however, we have a big problem [with] Chinese involvement in illegal mining activity in Ghana […and] we have decided to do something about it.” This is not the first time that Akufo-Addo has spoken out about the threat posed by illegal Chinese gold miners, having made galamsey a key campaign issue during the 2016 election. Akufo-Addo has spent significant political capital on the galamsey issue, arguing that failing to tackle illegal mining would be “a betrayal of the trust imposed on me [by the electorate].”

Gold comprises a significant portion of Ghana’s exports: Ghana is Africa’s second largest (and the world’s tenth largest) gold exporter. Such is the scale of this problem that estimates of the amount of gold leaving the country for China outstrips government revenue from mining, with $2.3 billion worth of gold exiting the country in 2016. Concerns about Chinese miners illegally exporting gold to the UAE have also emerged, with Akufo-Addo noting that there was a $5 billion discrepancy between trade statistics and actual gold exports in 2017.

Chinese galamsey miners a new take on an old trend

Galamsey is not a new phenomenon in Ghana, as an estimated 200,000 Ghanaians (in turn supporting some three million people) are believed to make their living from artisanal small scale mining (ASM). Whereas Ghanaian law allows land owners to mine their own property, as well as sublet to artisanal miners, many small scale miners also operate outside the law, working on public lands or in remote regions. Successive Ghanaian governments have tried to find these miners jobs in the formal mining sector, yet galamsey has stubbornly remained an important element in Ghana’s economic makeup.

Historically, any environmental degradation or detriment on the formal economy from galamsey has been limited by the scale and techniques of artisanal miners. The small scale of these mining operations and the reliance on hand tools prevented ASM (both in its legal and illegal manifestations) from unduly undermining both the formal mining sector and wider economy. This all changed with the arrival of Chinese miners seeking their fortune.

Economic liberalization in China and the greater opportunities for international travel and work available to Chinese citizens contributed to a host of Chinese migrant workers flocking to Africa to make their fortunes in a range in industries. Of particular interest was - and is - the gold mining sector in Ghana, with its uneven legal enforcement and ample gold reserves. Overall, some 50,000 individuals from China have made the journey to Ghana over the past fifteen years.

Interestingly, almost all the Chinese involved in galamsey in Ghana stem from just once county in the Guangxi autonomous region (home to the Zhuang people), in southern China. Dubbed the ‘Shanglin Gang’ after the eponymous county with a long history of gold mining, these Chinese migrants brought their expertise and mining techniques to Ghana, radically disrupting the local mining scene.

Having acquired loans from family and community members, thousands of Chinese miners purchased mining equipment and shipped it to Ghana, following suit with enough cash to cover living expenses, bribes and other expenditures. This was facilitated by cheap international shipping rates, and the fact that Shanglin is home to three companies selling mining equipment internationally, primarily to overseas Shanglin miners. In 2004, Ghana registered some 6,000 Chinese arrivals, yet this number quickly jumped to 18,300 in 2012 and 20,300 in 2013. The actual numbers are probably higher, as the aforementioned tallies do not account for illegal entrants, notably from Togo where Chinese citizens enjoy visas-on-arrival. Such was the influx of Chinese miners that it is estimated that over 2,000 illegal mining operations had been established by 2013.

This influx of Chinese miners catalyzed the informal and black economies in Ghana, as newly affluent miners flaunted their wealth. In many communities food shortages emerged, in part due to the loss of farmland from increased mining activity but also from Chinese miners buying up local supplies for use by the multitude of new mining compounds which mushroomed across Ghana. Fuel shortages were also experienced as miners bought up local fuel supplies to satiate the thirst of their mining machines. These machines in turn allowed Chinese operators to greatly increase their yields to such as degree that labelling their activities as small-scale mining (as opposed to more traditional large scale operations) became increasingly inaccurate.

The arrival of the Chinese also saw them effectively out compete existing artisanal miners, leading to the loss of livelihoods and forcing many Ghanaian miners to seek more precarious employment at Chinese mines. With unemployment rates for 15-24 year olds hovering around fifty percent, there is no shortage of workers willing to risk their lives.

Galamsey’s heavy social cost

The arrival of many newly affluent single men has led to a marked increase in prostitution in and around mining compounds, as well as a surge in drug traffic as African workers at Shanglin operations increasingly rely on cocaine and methamphetamine to give them the energy required to endure the harsh working conditions. The riches being extracted by Chinese operators has also seen a surge in armed robberies as thieves target mining operations and gold shipments, a trend which has in turn created a proliferation of small arms in mining areas as Chinese operators seek to protect themselves. The fact that many of these weapons are purchased from corrupt police officers (complete with forged documentation) only worsens this trend.

Mutual suspicion, poor working conditions (albeit with higher than average pay) and abuse by mine operators has invariably led to unrest and violence. In 2012, a sixteen year old Chinese miner was killed during a crackdown by security forces targeting illegal miners, and in 2013 anti-Chinese violence coincided with a national sweep targeting Chinese miners initiated by then-president John Mahama.

Unsurprisingly, the arrest of 150 - and eventual deportation of some 4,500 - Chinese citizens caught the attention of Beijing. As “disturbing pictures of the situation in Ghana started to spread across Weibo - they depicted wounded Chinese civilians and their houses amidst blazing fires.” While the Chinese government sought the release of the miners, the reaction from Chinese netizens was mixed, with some unsurprised by the violence given how poorly many Chinese miners in Ghana treat locals. It was during this time that a post attributed to angel investor Hu Jinghua (@??? - also attributed to Weibo user ‘Washed not Brainwashed (??????) - whether the two posters are the same person is unclear) began making the rounds online. Hu claimed he lived and worked in Ghana and gave a first-hand account of the abuse and decadence of many of his fellow countrymen.

“When the day comes that large-scale anti-Chinese incidents erupt in Ghana, it surely cannot be taken as an unlucky accident,” writes Hu. “Thousands of Shanglin people in Ghana display abusive and discriminatory behaviour towards black people on a daily basis [...For instance,] there are about ten dogs at the construction site and they get fed better than the black people who only get half a fish per person every day whilst the dogs can eat unlimited numbers of fish.”

Alongside familiar concerns about employee exploitation and abuse, the cultural differences between Ghanaians and Chinese miners helped create a recipe for disaster. Quoting Karsten Giese and Alena Thiel’s 2012 article “The Vulnerable Other: Distorted Equity in Chinese-Ghanaian Employment relations,” What’s on Weibo writes as follows:

“The vulnerability of both Chinese employers and Ghanian employees is central to the problem. The Chinese are vulnerable because they are in a foreign and possibly hostile environment with a different language and culture, while there is a lot at stake for them in terms of financial investment. They expect honesty, proactivity and dedication from their workers in order for their mutual relation to be successful. In exchange, they pay Ghanaians wages that often exceed the local average. The Ghanaians that work for the Chinese, on the other hand, are vulnerable because they are overall economically marginalized and uneducated young men.”

“They come from a cultural background where one’s employer is also supposed to be one’s guardian and protector. Employment relationships are characterized by the employer taking care of his workers in terms of fees or gifts in order to build on long-term loyalty; the employment relation, in this way, somewhat resembles a family relationship.

The Chinese employers do not get what they want from their Ghanaian workers (hard work and loyalty) because they do not give them what they want (symbolic gifts or extra fees). This results in structural dissatisfaction; a derailed relationship where discrimination and violence eventually emerges as the consequence of complete mutual misunderstanding.”

The impact of gold prices outweighs results from Ghana’s anti-galamsey efforts

The 2013 crackdown by the Ghanaian government did reduce the number of Chinese miners in the country, but in the long-term it merely changed Chinese migration patterns. Whereas prior to 2013 many miners sought to establish long term operations in Ghana, after 2013 they began instead to follow a three year cycle. During the first year they invest their capital and build mines, in the second year they recoup their costs, and in the third year they make a profit and then return home. Moreover, it can be argued that rather than government intervention, the prime reason behind the decline in the number of Chinese miners circa 2013 is the impact of international gold prices.

In April 2001, gold stood at $349 per ounce, yet by August 2011 gold had reached an all time high of $1,911 per ounce as the global financial crisis created vast uncertainty. One Chinese miner speaking to researchers in 2014 noted that “in four to five years, a lot of Chinese millionaires, even billionaires were created” as a result. The Chinese business daily, 21st Century Business Herald has quoted earnings of up to $500 million for some miners, with the purchase of Ferraris and use of gold bars as gifts taking off in Shanglin. To give an example of the kind of return miners could expect, at the height of the gold rush a team of eight could make a gross daily profit of some $15,000.

Chinese migration to Ghana nicely mirrors skyrocketing gold prices, and by 2013 the gold bubble had already burst, with prices dropping from around $1,663 in January 2013 to $1,234 by June of that year. While still high, the drop in gold prices took some of the wind out of gold fever that had taken hold of Chinese migrants, with late-comers facing lower prices, increased government scrutiny, and more importantly, the prime sites already occupied by other Chinese operations.

Gold mining in Ghana by type (as percentage of total)

Source: Botchwey, Crawford, Loubere and Lu. "South-South Irregular Migration: The Impact of China's Informal Gold Rush in Ghana." International Organization for Migration (IOM) (Dec 2018): 1-18.

The post-crackdown decrease in Chinese mining operations was not a lasting one, as many operators already in the country weathered the storm. Chinese equipment and techniques have also been adopted by Ghanaian galamsey workers, thus further perpetuating the growth of ASM as a percentage of the Ghanaian mining sector. ASM accounted for just seven percent of the mining sector in Ghana in 1995, only to grow (with the exception of a contraction in 2015) to thirty-eight percent, according to the latest figures from 2016.

Ghana targets Chinese miners and Beijing responds

Despite previous crackdowns and a drop in global gold prices, the problem of Chinese involvement in galamsey continues to plague Ghana, so much so that in 2017 President Akufo-Addo launched Operation Vanguard, a 400 person task force operating in southern Ghana. Part of the ruling New Patriotic Party’s five year galamsey eradication project, Operation Vanguard is targeting Chinese miners with renewed vigour, as previous sweeps had only managed to capture low level (and easily replaceable) workers with no knowledge of wider galamsey networks. Consequently, the high profile arrest of Asia (Aisha) Huang, the so-called “Galamsey Queen” and four of her compatriots in 2017 made national headlines, with Huang implicated in facilitating illegal Chinese mining and allegedly enjoying connections to high profile politicians.

Alongside Huang, over 1,000 Chinese were swept up in Operation Vanguard, prompting a terse response from Beijing, a prominent provider of loans to Ghana. Calling for the prompt release of those in custody and for Ghanaian media to provide '‘more balanced’ reporting on the issue, Beijing warned about the potential damage to bilateral ties going forward. China’s response was met with indignation from both the public and within the Ghanaian government, with Ghana’s information minister stating that “the Chinese threat or whatever does not bother me in the slightest.”

Ghanaian satirical artist Bright Tetteh Ackwerh also took on China with his piece “We Dey Beg” - or “We are begging” - a cartoon showing Chinese leader Xi Jinping pouring dirty water from a Ming vase into cups held by President Akufo-Addo and the country’s minister of natural resources, while the Chinese ambassador gleefully waves a gold bar. Ackwerh’s cartoon even caught the eye of Chinese embassy which complained about it (among other things) in a letter to the minister of natural resources. Ackwerh, who cites Ai Weiwei as an influence, remained unfazed, producing a follow up cartoon (depicting a host of Chinese figures brandishing fists at President Akufo-Addo holding a ‘Stop Galamsey’ sign behind his back) called “Them Threaten” after China had voiced its displeasure and Ghana’s information minister responded in defiance.

Despite concerns from China, Ghana has continued to forge ahead with its anti-galamsey efforts, with the government implementing a moratorium on the issuing of new mining licences and the country’s chief justice designating fourteen courts to hear illegal mining cases in an effort to expedite case processing. In April 2017, the government also issued a three week ultimatum, warning illegal miners to stop their operations or face prosecution: satellite imagery showed that over 500 excavators and some 1,000 dredging machines were voluntarily removed from galamsey sites.

Ghanaian civil society has also jumped on the anti-galamsey bandwagon, with media outlet CitiFM launching the #StopGalamseyNow campaign and key national media houses banding together to establish the Media Coalition Against Galamsey. The local film industry has even made a movie, Ghana Galamsey, where illegal mining is key to the plot. Akufo-Addo has also found support from Ghana’s religious leaders who have expressed willingness to preach the evils of galamsey to their congregations, with the 2017 Catholic bishops conference in Ghana issuing a statement condemning illegal gold mining.

More recently, a video of a sermon by Bishop Joseph Francis Kweku Essien of Wiawso went viral in which he speaks out against Chinese influence in the country. “We are in captivity in the sense that, a country like ours, a country which mines gold [...] There are assemblymen and MPs [...] there are chiefs and they see it. It is like nobody can talk about it. For what gain we are getting only God knows. So we are slaves in our own land [sic].”

Legal loopholes and corruption hamper galamsey fight
Despite initiatives such as Operation Vanguard, Ghana’s efforts at tackling Chinese involvement in galamsey are being undermined by inconsistent laws and the corrosive influence of corruption. For instance, whereas Ghanaian law prohibits foreigners from mining plots smaller than twenty-five acres, many Chinese galamsey miners reach informal deals with local landowners with the former mining the plot and sharing the proceeds with the latter. Ghanaian law also forbids the dredging of rivers, yet many Chinese operations (especially in rural / remote areas) are actively engaged in river dredging, bribing local officials to look the other way. Water pollution from illegal dredging is rising at an alarming rate, with the Ghana Water Company warning in March 2017 that the country would soon have to being importing water for consumption if illegal mining activities were not curtailed.

Similarly, despite being designated a protected area, the Atewa Range Forest Reserve, which boasts some of the highest biodiversity on the planet, is being threatened by illegal gold and bauxite mining, as galamsey operations expand into the park’s interior; a trend facilitated by support from impoverished local communities seeking jobs. Deforestation and water pollution from mining are polluting the rivers that run through the park, including those serving as water sources to downstream communities, including the five million people of Greater Accra.

The inconsistent enforcement of this law, coupled with the type of corruption endemic in the police force mentioned above severely undermines the central government’s ability to curb galamsey activity. For instance, only twelve of the approximately 1,000 Chinese apprehended during Operation Vanguard have actually been charged, and the quick release of many of these detained individuals raises suspicions of police corruption. One Chinese miner arrested in 2017 not only allegedly ‘escaped’ from jail but even had his impounded car returned to him shortly thereafter.

Another legal loophole is the fact that Ghanaian legislation does not require gold dealers to guarantee that their stock is legally sourced. This rather glaring loophole exists due to Ghana’s long history with local galamsey miners, many of whom are poor and resort to illegal mining to survive. By not putting the burden of proof on dealers, this arrangement has allowed local artisanal miners to make a living as well as for Ghanaian traders to increase national gold exports. Where a problem arises is that the mechanized nature of Chinese mining results in far greater quantities of gold being exported, often by Chinese middlemen from Zhejiang and Fujian provinces, who in turn ship the gold to China or India.

The Bottom Line

Known as the Gold Coast during British rule, Ghana is no stranger to rapacious foreigners making off with the nation’s natural resources - the Chinese are only the latest incarnation of this trend. Enticed by Ghana’s rich gold reserves, encouraged by booming gold prices and weak law enforcement, tens of thousand of Chinese migrants - almost all from Shanglin county in Guangxi - traveled to Ghana to seek their fortunes.

Bringing a legacy of alluvial gold mining and an army of heavy machinery, early arrivals soon reaped eye-watering sums, with billions of dollars leaving the country for China. The arrival of Chinese migrants disrupted traditional small scale miners - both legal and illegal - soon out-competing them, only to later recruit many of their former competitors as Chinese mining operations became the only game in town in many communities throughout Ghana.

Aided by the cooperation of local landowners and corrupt security services, Chinese galamsey miners easily circumvent Ghanaian law, massively increasing the amount of gold ferreted out of the country. While the government has stepped up its efforts to counter illegal mining, much still needs to be done to prevent Accra’s efforts from being subverted from within by politicians and police in the pocket of galamsey miners. The social unrest and environmental degradation birthed by Chinese galamsey operations ought be enough of a wake-up call, and while many Ghanaian civil actors are taking this issue seriously, they are being let down by the pernicious corruption in the country.