The country has been thrown into a state of shock following the death of at least 8 illegal miners who clashed with military personnel protecting the concession of AngloGold Ashanti in Obuasi.
This adds to the tall list of clashes between the Obuasi Mines and resident illegal miners leading to numerous deaths, destruction of properties worth millions of dollars, and severing the relations between AGA and the community.
The long-standing feud stems from the inability of the resident small-scale miners to obtain a concession to carry out their operations after AGA was given the exclusive right to the vast concession.
Residents believe the mine that was supposed to be a means of their prosperity has become the source of their misery and poverty. Without lands for farming and small-mining, some aggressive youth intermittently invade the concession of the mines to carry out their activities. This leads to clashes as has happened recently.
Potential of the Obuasi Mine
The AngloGold Ashanti Obuasi mine is one of the world’s largest gold mining companies. It has long been a cornerstone and backbone of Ghana’s gold production. The mine has a mineral reserve of 7.11 million ounces (Moz) of gold indicating a very significant gold available for extraction. The underground mine operates to a depth of 1,500m.
On an annual basis, it produces an average of about 224,000 ounces (koz). The company says the cost of sustaining operations of the mine including any other expenses is $1,777 per ounce of gold produced. An ounce of gold now sells at over $2500 indicating the mine’s profitability. Its capital expenditure is estimated at $214 million with a total workforce of 5376 consisting of both permanent and contract staff.

The Struggles
Ironically, the wealth-producing mine has been facing a number of challenges in its operations. Its history is marred by recurring tensions, operational disruptions, and legal disputes that have far-reaching implications for Ghana’s mining sector and broader business environment.
For stronger financial power, the then-Ashanti Goldfields merged with AngloGold to become AngloGold Ashanti in 2004. After a number of challenges including losses and lack of development, the mine was partially closed down in 2014 as over 5000 employees were laid off. The mine was placed under care and maintenance which was later reopened in 2019.
Impact of the Long-Standing Clashes on Ghana’s Mining Industry and Business Environment
It is worthy of note that the constant clashes between illegal miners and AGA are not an isolated situation at Obuasi. Numerous reports confirm that other large-scale mining companies across the country are facing similar challenges of invasion by illegal miners, and clashes among others. Despite governmental efforts including military interventions, the situation persists. This reflects the deeper systemic issues such as poverty, unemployment, and lack of proper enforcement of regulations.
As the situation continues to flourish, there are some potential impacts it could have on Ghana’s mining industry and business environment in general. Let’s take a look at some of them;
Investor Confidence
The country’s inability to deal with the problem of illegal mining could be a cause of concern for investors. A situation where armed illegal miners forcefully enter concessions of large-scale mining companies to engage in nefarious activities is a major put-off for investors. It raises concerns about the stability and control of the government. For instance, the decision of AngloGold to sue the Government of Ghana at the International Centre for Settlement of Investment Disputes (ICSID) in 2016 over activities of illegal mining on their concessions shows the erosion of trust between the investor and the government. The deaths and destruction of assets worth millions of dollars also amplify fears among investors about the risks of doing business in Ghana.
Operation and Financial Cost
The long-standing threat of illegal miners who are mostly armed means companies in the large-scale mining sector must heavily increase their security budget. Since it is the duty of the employer to protect employees and assets of the company, extra cost for security is incurred to ward off the threat by these illegal miners. This generally increases the operational costs of the mining company hence affecting profitability. In addition, funds that could have been channeled into development, innovation, and expansion are expended on security.

Reputational Damage
Both the government and the mining companies risk international reputational damage as these clashes persist. The continued deaths as a result of the constant clashes do not paint a good picture of the company involved although they may not be entirely liable. For instance, AngloGold in 2011 was recognized worldwide by the Public Eye Global Awards for environmental pollution and human rights violations. This Public Eye Aeards is mostly given to multinationals the public considers as “most irresponsible.”
Legal Ramifications
The precedent set by AngloGold’s 2016 arbitration filing may encourage other companies to seek legal redress to this issue of invasion by illegal miners. This potentially strains the government’s resources in undergoing the arbitration process and also undermines its reputation as a reliable partner.
The Expert View
Sharing his views on the development, Liam Morrissey who is the Chief Executive Officer (CEO) of a British risk consultancy firm, MS Risk Limited and has worked on several mining projects in Ghana and West Africa since the 1990s says although the impact such as investor flight may not be seen yet, the persistence and escalation of the situation could impact investors in future.
In an interaction with The High Street Journal, he said “Investors who are committed will be very well read-in on local dynamics and they won’t be overly alarmed. There might be casual investors from afar who misunderstand it, but the institutional investors who are investing in AngloGold and Newmont will understand the environment of Ghana.”
“So I don’t think it’s an immediate issue. I think that if we continue to see a trend of industrial mining companies experiencing violence and it seems to be uncontrolled and expanding, that can’t be good for the industry,” he added.
He also confirms that there is a potential for increased costs for security for mining companies if the situation is not drastically addressed.
“The operational expenditure will probably go up a little bit. But again, right now, these two incidents are not severe enough to have been a major operating cost to both companies. But if it becomes the normal business that you have to have lots of soldiers at your mine or adjust certain activities for security controls, and all of the mining companies follow suit then that will have a cost, but it’s not an immediate issue,” he maintained.
Liam Morrissey foresees the recent happenings as an opportunity for the government to calm tensions and resolve the issues. Therefore, he calls for a strong plan that will tackle the issues at all levels to address the situation amicably. “Responsible companies seek the social license to operate and want to have harmony with their neighbors and all stakeholders. It is good for business.”