Africa is a hotspot for gold mining, but it can be a challenging and risky business. To make the most of it, you need a sound team and a well-thought out plan.
African governments are trying to work out how best to manage a sector that provides income, jobs and resources but can also be a source of conflict and criminality. Reuters found evidence of gold being smuggled out of Africa in huge quantities.
It is a form of mining
Africa is a huge region, and it holds one of the world’s biggest gold reserves. Its mining industry is thriving, but it is a competitive market with many operating challenges. To overcome them, companies need sound ‘know-how’ complimented by hard work.
A growing number of companies are entering or expanding into the continent’s mining sector to tap into this potential. Smaller, more agile resource companies are also forming to take advantage of this opportunity.
West Africa is a key driver of gold production in the continent, with Ghana, Mali and Burkina Faso currently producing nearly twice as much gold as South Africa. The majority of West African mines have targeted shallow easily mineable oxide material, but the deeper sulphide ore still remains untapped.
The encroachment of mining on natural habitats in the region is also a major concern. For example, a recent image captures mining activity near the Upper Wassaw Forest Reserve in southwestern Ghana, which hosts a variety of conservation concerns including the green-tailed bristlebill and Tai forest treefrog.
Across sub-Saharan Africa, artisanal mining has become an important source of income for tens of thousands of people. It employs rudimentary tools and technologies, often with minimal or no government regulation. It is illegal in many countries, although some, such as Burkina Faso, recognise artisanal mining as a formal category.
It has become a major source of conflict, with small-scale miners being threatened by insurgent groups that take over mines. In Burkina Faso, insurgents have taken over 24 mines that were producing more than 700kg of gold a year, worth about $35m.
Another big concern is that industrial mining companies are causing pollution. These include spills of cyanide and other chemicals. In addition, industrial mining companies are generating significant amounts of dust that can lead to respiratory problems and a range of other health concerns.
This has resulted in a high rate of deaths and disease in the region. Children are particularly at risk from exposure to these materials.
A Reuters analysis found that large quantities of gold were leaving Africa without taxes being paid to the countries that produce it. This has affected a wide range of industries, from small-scale miners to gold refineries. It also threatens artisanal mining, which provides a lifeline for tens of thousands of people in the region.
It is a source of income
Gold mining in Africa is an economic phenomenon that has been a significant source of wealth and income for people in the region since the 1920s. In some African countries, it has become a source of livelihood for tens of thousands of families.
In Burkina Faso, gold is the country’s largest export and provides a vital lifeline for many rural areas. But the insurgency that has hit this gold-producing country over the past two years has left many of its mines under the control of armed groups, who are taking advantage of their lack of government regulations to smuggle out vast quantities of gold from remote mines on land they have controlled.
These illicit mining operations have become a major source of revenue for insurgents. They also threaten the livelihoods of tens of thousands of families who depend on small-scale, informally mined gold for their income.
This smuggling of gold is a problem for many African states. It means that the tax revenues they receive from their mining industries are not enough to support their governments. This is a problem that has been growing in recent years as gold prices have increased dramatically.
There are a number of factors that lead to this situation. One of them is that gold production on a large scale requires a significant investment in infrastructure. The construction of roads, railways and ports can cost billions of dollars.
Another factor is that mining companies have to pay for security to prevent smuggling. This is a significant cost that can affect the bottom line of a company.
Some of the big industrial mining companies in Africa, such as AngloGold Ashanti, Sibanye-Stillwater and Gold Fields, do not send their gold to Dubai for refining. They say this is because the UAE does not have accredited refineries.
The United Arab Emirates (UAE) is one of the biggest buyers of gold in Africa. It buys around 9.5 tonnes of it each year, according to the Burkina Faso ministry of mines. But of this 9.5 tonnes, only 200 to 400 kg are declared to the authorities.
It is a source of pollution
Mining companies in Africa often dump their waste into rivers and lakes, destroying water supplies for millions of people. The Lihir gold mine in Papua New Guinea, for example, dumps more than 5 million tons of toxic waste into the Pacific each year. This pollution is a major contributor to ocean acidification, which can damage coral reefs and other marine life.
Some gold miners use toxic chemicals to increase their yield. This contaminates the water they drain back into the river, making it unfit for drinking or bathing. The toxic waste also pollutes the air and eats into soil, killing plants and animals.
Despite these risks, artisanal and small-scale mining remains a key source of income for millions of people in Sub-Saharan Africa. Moreover, it can help people build better lives for themselves. However, it is often at the cost of the environment and human health.
The mining industry is becoming more and more vulnerable to environmental degradation. The mining process leaks toxic chemicals into rocks, soil and rivers.
According to the United Nations, at least 180 million tons of toxic waste is dumped into rivers and lakes every year by gold mining companies around the world. This is more than the total amount of waste sent to landfills in the United States each year.
These chemicals, like cyanide, are highly toxic and can cause serious health problems. They can cause birth defects and lead to liver and kidney failure.
Many countries have banned cyanide-based gold mining, but the industry has grown so much that governments are reluctant to stop it completely. One reason is that it provides a valuable source of revenue for rural communities, and is an attractive investment for foreign investors.
The mining industry is also increasingly a major source of conflict. It can fuel resentment among local residents and contribute to violence. Some NGOs help manage mineral-related conflicts by supporting social cohesion in the communities.
A recent study in South Africa examined how gold mining affects groundwater quality. A systems dynamics model was developed to understand the dynamic relationship between mining activities and the surrounding environment in a strategic water area, such as the Blyde River Catchment in Olifants Water Management Area (OWMA). The study found that there were significant impacts on water quality within the study area, especially in terms of groundwater contamination risk.
It is a source of conflict
Across Africa, natural resources such as diamonds and gold are often sources of conflict. This is because resource extraction occurs without the development of domestic, political, or economic governance. These conflicts can range from large-scale civil wars to small-scale armed groups, and they may involve individuals or groups of individuals. This situation is known as the “resource curse” and is a major cause of international armed conflict in Africa.
Since the 1990s, global attention has been focused on a concept called “conflict resources” (resources that contribute to or benefit from a conflict). These include diamonds and gold, which have been traded by rebel groups in exchange for weapons and other supplies, facilitating several African conflicts.
While the majority of artisanal and small-scale mining in Africa is carried out by rural communities, some large-scale operations are operated by investors who pay local miners a wage and a share of production and then sell their mineral products to consumers in developed markets. These operations are particularly problematic because they represent a significant source of revenue loss to governments when production is sold outside the legal flow chain.
These mining operations are also a key driver of environmental health crises in Africa. In Zamfara State, for example, the demand for gold led to a massive increase in lead poisoning cases among the local population, which has negatively impacted the health of thousands of children and adults. In response, the Nigerian government enacted a ban on artisanal mining in the region, but this has not alleviated the problem.
Despite these challenges, the resource sector in Africa remains highly prospective for investors. As the world’s demand for minerals increases, the need for artisanal and small-scale mining will only increase.
This is especially true in countries where large-scale mining has been banned due to environmental and human rights concerns. These restrictions are a good example of the importance of responsible artisanal and small-scale mining, which can be achieved with the right team, expertise and hard work.
Artisanal and small-scale mining has an important role to play in Africa, as it creates employment opportunities and supports economic development. It can also contribute to regional stability by providing a safe and healthy workplace for miners and their families. However, it is important to remember that these communities will continue to be impacted by global market demand for metals such as gold, tin and cobalt. This will be a challenge for African nations and will require sustainable mining strategies that support the livelihoods of local communities.