Fortune Hunters Endanger Africa’s Abandoned Mines
Artisanal miners outside a gold-mine tunnel in the Democratic Republic of Congo, in a 2104 photo. Photo: Kenny Katombe/Reuters
Nicholas Bariyo in Kampala and
Alexandra Wexler in Johannesburg
April 11, 2016 7:45 p.m. ET
Fortune seekers across Africa are clambering down gold shafts closed by some of the world’s biggest miners, fueling dystopian conflicts between companies waiting out a commodity rout and poor villagers with little to lose.
The result is a chaotic and often deadly tableau playing out deep underground across the mineral-rich continent. Dozens of miners have been killed in subterranean gunfights over turf ceded by mining companies, many of whom fear the collateral damage to shaft walls and winches could make it impossible to open them again.
In Ghana, AngloGold Ashanti Ltd., the world’s No. 3 gold producer, closed shafts at its Obuasi mine in late 2014, as the mine hemorrhaged cash amid sinking metals prices. Early this year, hundreds of men broke through the 13-mile fence around Obuasi and started hunting for gold there on their own.
One artisanal miner, Borin Rufus, said he needs the work even though he knows it is illegal. In a good month, he earns about $1,000 to support his family of seven, more than twice what he was making by legally mining deposits just beyond Obuasi’s perimeter.
“There are no jobs and no other means of survival, ”said Mr. Rufus, who leads a group representing illegal miners picking over Obuasi’s ore. Some of the group’s members are licensed to prospect near the mine, but he acknowledges that a majority aren’t, due largely to costs associated with acquiring a license.
The incursions of illegal miners into mothballed sites are another costly headache for an industry struggling to right itself as a global commodities rout decimates their profits. Some of the world’s largest miners, including Glencore PLC and Anglo American PLC, are shedding jobs and operations across the globe.
Now, prospectors are invading the sites many of these companies are leaving behind, especially gold mines, creating an environment of desperate scavengers where it isn’t uncommon for gunfights to erupt thousands of feet underground. South African police in September found the bodies of 15 illegal miners who had been shot during a three-day turf war at a mine east of Johannesburg.
To be sure, violence at mines on the continent isn’t new or restricted to abandoned shafts. In August 2012, a wildcat strike that started at the world’s No. 3 platinum producer Lonmin PLC’s Marikana mine in South Africa left dozens of people dead. Illegal miners in the country, who are called zama zamas, which is Zulu for “those who try their luck,” sometimes slip into shafts that are in operation at the country’s biggest gold producer Sibanye Gold Ltd., as well as others.
Authorities in Tanzania are battling to control an influx of illegal miners, the numbers of whom has more than doubled over the past five years. Over the past two years, 103 miners have died in accidents at artisanal mines in Tanzania, compared with just two at large-scale operations, the country’s minerals ministry says. Tanzania’s largest miner, Acacia Mining PLC, has cut more than a quarter of its workforce to counter rising costs.
In the Democratic Republic of the Congo, illegal mining has spread from the embattled Kivu region to the mining stronghold of Katanga, where as many as 150,000 illegal miners now work alongside larger industrial operations.
Still, “we believe we can coexist with AngloGold Ashanti,” said Mr. Rufus, whose group broke into AngloGold’s Obuasi mine in Ghana earlier this year. In March, the company relinquished about two-thirds of its Obuasi license area that it deemed not worth mining to the government, which can then hand out licenses to artisanal operators as it sees fit.
But coexistence sometimes devolves into violent clashes: In February, AngloGold’s head of corporate affairs in Ghana, John Owusu, was killed during a confrontation at the mine.
While Mr. Owusu and others were inspecting holes in Obuasi’s fence, some illegal miners gathered on a nearby hilltop and hurled rocks at him and his companions. Others brandished machetes.
Mr. Owusu was runover as he tried to flee in the ensuing mayhem. AngloGold subsequently withdrew 175 nonessential employees from the site.
“We’re working with the government to return law and order to the mine,” said Srinivasan Venkatakrishnan, AngloGold’s chief executive.
The company’s security guards remain on the site, mainly to report on the illegal miners’ movements and protect shaft-winding gear and other equipment in the southern portion of the mine; intruders dominate the mine’s northern stretches.
Meanwhile, the company is trying to determine whether Obuasi could ever be profitable again. In 2015, the mine cost AngloGold about $100 million to maintain, and this year, the maintenance, security and feasibility study to restart production could cost $75 million. AngloGold wants to mine gold at Obuasi for between $750 and $850 an ounce. In 2013, the year before operations began to wind down, Obuasi’s gold cost $1,820 an ounce to mine.
Gold on the New York Mercantile Exchange was recently trading around $1,242 an ounce, up this year after falling below $1,050 an ounce at the end of 2015. AngloGold has laid off about 5,000 workers from Obuasi since 2013.
The company is searching for a joint-venture partner to help it redevelop the mine, but is concerned that illegal mining could threaten the mine’s long-term viability. AngloGold says at least 16 acts of arson have charred electrical equipment and other infrastructure.
Indeed, Mr. Rufus and his brethren have no plans to lay down their picks and shovels soon, despite the daily danger of forceful eviction or an underground accident.
“The risks are worth taking,” he said. ”I am prepared to pay the price.”