HomeGoldAngloGold Ashanti’s idled Obuasi gold mine threatened by illegal mining

AngloGold Ashanti’s idled Obuasi gold mine threatened by illegal mining

AngloGold Ashanti, the dual listed gold mining company, believes that illegal mining activity could threaten the long-term viability of its idled Obuasi gold mine in Ghana, West Africa.

It also affects AngloGold Ashanti Ghana’s ability to maintain critical services at the mine as well as negatively impacts its feasibility study into whether the mine could be redeveloped and returned to profitability.

AngloGold Ashanti Ghana withdrew employees performing non-essential functions from Obuasi last week following the incursion of illegal miners inside the fenced areas of the site. Remaining employees at Obuasi are performing critical tasks related to maintenance of the site, and also water treatment, provision of medical services and maintenance of electrical facilities that provide power and water to employees’ homes and surrounding communities.

During the riot by illegal miners, head of corporate affairs in Ghana, John Owusu, was killed in a riot involving illegal miners at the mine. He was fatally injured in a car accident as he and colleagues tried to flee after a large group of illegal miners hurled rocks and other projectiles at mine employees, police and security personnel, the company said.

These developments at the site followed the withdrawal of government military protection from the mine on Tuesday 2 February 2016, after initial incursions on 30 and 31 January 2016.

AngloGold Ashanti said in a statement on Tuesday that the situation at the mine is currently calm, though it remains deeply concerned about the prevailing conditions, with illegal miners continuing to enter the site.

“If allowed to continue unchecked, illegal mining taking place on parts of the concession, and vandalism of property, could threaten the long-term viability of the mine,” the company said.

AngloGold Ashanti Ghana has informed local authorities, through a declaration of Force Majeure, that under the current situation it may be constrained from fulfilling certain conditions of its Amended Programme of Mining Operations, the permit that covers current activities at Obuasi.

Following engagement on 12 February 2016 between AngloGold Ashanti and the Ghanaian Minister of Lands and Natural Resources and other government officials, the Minister has committed to sending a delegation of high-ranking government officials to examine the situation at the mine.

AngloGold Ashanti said that it awaits the outcome of the delegation’s visit, and will continue to urge authorities at a national and local level to assist in upholding the law and returning safety and security to the site before further injuries or further loss of life occur.

Meanwhile, Randgold Resources in December pulled out of a joint venture with AngloGold to redevelop Obuasi. After undertaking a due diligence exercise into the mine and the redevelopment opportunity Obuasi affords, Randgold determined that the development plan did not satisfy its internal investment requirements and subsequently terminated its investment agreement entered into with AngloGold Ashanti.

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Chantelle Kotze
Chantelle Kotze is a Johannesburg-based media professional. She is a contributor at Mining Review Africa (Clarion Events - Africa) and has created content for the media brand over the past 6 years.