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Tuesday, 4 February, 2003, 13:07 GMT
Ghana's gold dilemma
Ashanti gold being made into ingots
Gold mining would be manna for Ghana's economy

The Ghanaian Government is agonising over whether to grant licenses to six mining companies which are ready to invest over $2bn or preserve the forest and help save the earth.

Over the past five years, only a handful of new mines have opened as against dozens in the early to mid 1990s.

Gold field in Ghana
To mine or not to mine?

Five of the prospective mining companies are interested in mining for gold, but the ore is located inside forest reserves.

US mining giant Newmont, would, alone, pump close to $500m into the ailing Ghanaian economy, even before mining starts, and create about 1,000 jobs directly.

Newmont has found gold in two locations; but one of them falls inside a forest reserve. The company says it wants both concessions or nothing.

Bauxite too

A sixth company, called Bhp Billiton, an Anglo-Australian firm, wants to explore for bauxite, the mineral from which aluminium is derived.

Billiton would invest about $1bn to establish an integrated mining and alumina processing industry.

Since independence, Ghana has been looking desperately for exactly such an investor to mine and process the prodigious volumes of bauxite which, minerals experts say, exist at Kyebi in the Eastern Region and Nyinahin in Ashanti.

But, again, the precious mineral lies buried inside forest reserves.

Currently, there are two companies involved in the bauxite and alumina processing business: one exports the raw bauxite, the other imports it semi-processed from Jamaica.


Last week, three ministers in charge of mines, forestry, and environment toured some of the reserves and met the local communities to help government to take a decision.

The Minerals Commission which regulates mining activities in the country favours licensing the companies to mine.

One official said small-scale artisans would invade the forest and mine, anyway, if the big companies, which are easier to identify, regulate, monitor and tax, are kept out.

A villager in Ghana
Many are poor in Ghana

Many ordinary people in the prospective mining towns, which are desperate for amenities and secure jobs, also want the mines.

But environmentalists say the forest reserves are too important for the survival of the earth and should not be tampered with.

Dr Solomon Quartey, a consultant, recommends eco-tourism - where visitors pay to visit the forest - as a means of creating jobs in the communities.

A billion dollars will not pour in in a hurry, he concedes, but the forest will not disappear in the near future either.

See also:

22 Feb 02 | Country profiles
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