HomeGoldGold Fields suspends resumption of mining at Damang

Gold Fields suspends resumption of mining at Damang

At work in an open
pit in Damang
Accra, Ghana — MININGREVIEW.COM — 24 June 2008 – The Ghana subsidiary of South Africa’s Gold Fields Limited has suspended a planned resumption of underground mining at its Damang operation in Ghana, after what company officials have described as “an invasion” of the site by illegal artisanal miners.
Reuters reports from the Ghanaian capital that the Gold Fields Ghana subsidiary Abosso Goldfields Limited (AGL) , which already operates open pit mines at the site, had been due to reopen shaft mining operations by the end of 2008. The shaft – abandoned from a previous mining operation 50 years ago – is estimated to hold at least 1.1 million ounces of gold with a lifespan of 12 years.

“It’s a worrying problem,” said Gold Fields Ghana’s head of corporate affairs and social development Tony Aubynn. “Nearly 3 000 illegal miners have invaded the concession. They are using Chinese-made crushers and other sophisticated tools to mine the ore,” he told Reuters.

“The situation now is that you’re no longer dealing with just artisanal mining, but rather we’re talking about organised groups with improved technology who are competing with the company to mine the ore,” Aubynn added.

Ghana is Africa’s second biggest gold miner after South Africa.

Aubynn said “aggressive and well-armed” illegal miners were in control of some of the rich ore bodies in parts of the Damang concession. Although the company regarded the underground operation as viable, there was no point going ahead with development under current circumstances.

He revealed that the disruption caused by illegal miners had cost the Ghanaian state nearly US$100 million (R800 million) in lost royalties and taxes, as well as obstructing the creation of more than 200 jobs in the area.

Abosso Goldfields Limited is 71.1% owned by Gold Fields Ghana, with Canadian-listed Iamgold holding 18.9% and the Ghanaian state the remaining 10%.