CHINESE GALAMSEY AND THE ILLEGAL ALLURE OF GHANA’S GOLD RUSH (PART 1) Featured

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

 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 fortune in Ghana.

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

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

Military swoops

Three, two, one, breach! Ghanaian soldiers smash down the door to a ramshackle, single-storey 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, the English of the soldiers mixing with the Cantonese of the miners. The group is quickly rounded up and led out of the building to waiting military vehicles, just one of many groups of illegal miners being brought to book across Ghana.

Despite the efforts of the Ghanaian government, these raids barely dent the number ‒ roughly 50,000 ‒ of irregular Chinese migrants who have travelled 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 monopolise the limelight. The phenomenon of illegal artisanal mining in Ghana ‒ known as galamsey, derived from the phrase “gather them and sell” ‒ demonstrates the collective impact of individual Chinese migrants.

Big problem

Such are the concerns about Chinese miners in Ghana that the country’s leader, President Nana Akufo-Addo, speaking to Nikkei Asian Review in January 2019, said 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 President Akufo-Addo has spoken out about the threat posed by illegal Chinese gold miners. He made galamsey a key campaign issue during the 2016 election. He has spent significant political capital on the matter, arguing that failing to tackle illegal mining would be “a betrayal of the trust reposed in me [by the electorate]”.

Gold comprises a significant portion of Ghana’s income. Ghana is Africa’s second-largest (and the world’s tenth-largest) exporter of gold. Such is the scale of this problem that estimates of the amount of gold leaving the country for China outstrip government revenue from mining, with US$2.3 billion worth of gold leaking from Ghana in 2016.

Concerns about Chinese miners illegally exporting gold to the United Arab E have also emerged. President Akufo-Addo noted that there was a $5bn discrepancy between trade statistics and actual gold exports in 2017.

New take on old trend

Galamsey is not a new phenomenon in Ghana, as an estimated 200,000 Ghanaians (who in turn support some three million people) are believed to make a living from artisanal small-scale mining (ASM).

Whereas Ghanaian law allows landowners to mine their own property, as well as sublet to artisanal miners, many small-scale miners operate outside the laws, working on public land 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 of Ghana’s economic make-up.

Historically, any environmental degradation or detriment to the formal economy from galamsey has been limited by the scale and techniques of artisanal miners. The small scale of these operations and their reliance on hand tools prevented ASM (in both 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 liberalistion

Liberalisation in China and the greater opportunities for international travel and work now open to Chinese citizens contributed to a host of Chinese migrant workers flocking to Africa to make their fortune in a range in industries. Of particular interest was ‒ and is ‒ gold mining 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 15 years.

Interestingly, almost all the Chinese involved in galamsey in Ghana come from just once county in the Guangxi Autonomous Region (home to the Zhuang people) of southern China. Dubbed the “Shanglin Gang”, after the eponymous county, which has a long history of gold mining, these 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 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 Shanglin being home to three companies selling mining equipment internationally, primarily to overseas miners from Shanglin.

The Chinese influx

In 2004, Ghana registered some 6,000 Chinese arrivals; 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 catalysed the informal and black economies in Ghana as newly affluent miners flaunted their wealth. In many communities, food shortages emerged, in part because of 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 that 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 increase their yields greatly, to such a 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 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-to-24-year-olds hovering around 50 per cent, there is no shortage of workers willing to risk their lives.

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Ghanaian artisanal miners on Chinese-run sites might earn higher wages but they rarely meet their expectations

The arrival in small towns 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 trafficking as African workers at Shanglin operations increasingly rely on cocaine and methamphetamines to give them the energy required to endure the harsh working conditions.

Guns and robbers

The riches being extracted by Chinese operators have also experienced a surge in armed robbery, as thieves target mining operations and gold shipments, a trend which has created in turn a proliferation of small arms in mining areas as Chinese operators seek to protect themselves.

That many of these weapons are purchased from corrupt police officers (complete with forged documentation) only makes the trend worse.

Mutual suspicion, poor working conditions (albeit in return for higher-than-average pay) and abuses by mine operators have invariably led to unrest and violence. In 2012, a 16-year-old Chinese miner was killed during a crackdown by security agents targeting illegal miners, and in 2013 anti-Chinese violence coincided with a national swoop targeting Chinese miners initiated by the then President, John Mahama.

Attention: Beijing

Unsurprisingly, the arrest of 150 ‒ and the eventual deportation of some 4,500 ‒ Chinese citizens caught Beijing’s attention, 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 miners’ release, the reaction from Chinese citizens was mixed, with some unsurprised by the violence, given how poorly many Chinese miners in Ghana treat local people. It was during this time that a post attributed to the angel investor Hu Jinghua (@胡靖铧) ‒ also attributed to the Weibo user “Washed, not Brainwashed” (只洗头不洗脑: 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,” Hu wrote. “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.”

Cultural differences

Besides 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”, a post on Weibo read as follows:
“The vulnerability of both Chinese employers and Ghanaian 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 marginalised 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 characterised 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 emerge as the consequence of complete mutual misunderstanding.”

World prices

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 before 2013 many miners sought to establish long-term operations in Ghana, after 2013 they began 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 as a result, “in four to five years, a lot of Chinese millionaires, even billionaires, were created”. 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 roughly $1,663 in January 2013 to $1,234 by June that year. Though still high, the drop in gold prices took some of the wind out of the gold fever that had taken hold of Chinese migrants, with latecomers facing lower prices, increased government scrutiny and, more importantly, finding the prime sites already occupied by other Chinese operations.

Short lived

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, further perpetuating the growth of artisanal small-scale mining (ASM) as a percentage of Ghanaian mining.

ASM accounted for just 7 per cent of mining in Ghana in 1995, only to grow (with the exception of a contraction in 2015) to 38 per cent, according to the latest figures from 2016.

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