All that glisters

Anwiam, Ghana
River of death: a young man from the village of Anwiam in Obuasi, Ghana, fetches water from a contaminated stream DAVID ROSE/PANOS PICTURES/ACTIONAID

John Madeley reports on the disastrous effects of mining, and the attempts to help the locals

Gold, a symbol of wealth and power, beauty and love, holds another side to its glittering story. In human terms, the cost of mining it can be high. Seventy per cent of gold is mined in developing countries, and its discovery has led to severe environmental damage, loss of homes, land, and water, and to greater poverty.

Recent reports by the agencies ActionAid and CAFOD have detailed aspects of the gold trade that are usually hidden from public view. The ActionAid report, Gold Rush, which was issued last month, tells of how poor people near a mine in Obuasi, Ghana, 100 miles from the capital, Accra, are suffering huge social and environmental costs as a result of gold-mining by a subsidiary of the British mining giant Anglo American.

Its investigations describe how rivers have been polluted with arsenic, iron, manganese, and heavy metals from past gold-mining activities by Anglo American’s subsidiary, AngloGold Ashanti, and its predecessor, Ashanti Goldfields Corporation. Rivers “previously used by thousands of villagers for drinking water, fishing and irrigation are now unusable”, it says. Residents claim that there are still cases of water-pollution and flooding.

The CAFOD report, Unearth Justice: Counting the cost of gold, released earlier this year as part of a wide campaign about extractive industries, says that the sheer volume of water used by open-cast mining in particular can deplete rivers and even underground reserves. Waste from such mines often escapes into rivers, polluting the water for drinking and agriculture. For every gold ring made, there are 18 tonnes of waste. The report also outlines how gold-mining is linked to conflict, corruption, and disease, including AIDS.

It looks at two countries where gold-mining is causing problems: Honduras and Democratic Republic of Congo (formerly Zaire). In Honduras, communities have been forced out of their villages to make way for two vast mines. Farming land and forests have been lost.

In DR Congo, AngloGold Ashanti is exploring the Mongbwalu area for a possible new mining operation. The country ranks among the world’s poorest: 72 per cent of its population are estimated to be undernourished. “AngloGold Ashanti’s behaviour will be critical in fostering peace and reducing poverty in the area,” says the report.

Sir Mark Moody-Stuart, the chairman of Anglo American, acknowledged at the annual meeting of the company this year that “our operations have significant environmental and social impacts that need to be carefully managed. . . since mining involves the extraction of a non-renewable natural resource, it presents distinct challenges in relation to sustainable development. We therefore seek to ensure that during the lifetime of a mine we balance the depletion of a natural resource through growing the stock of social, human and man-made capital.”

Yet the human problems caused by gold-mining are part of a wider problem. The mining of resources that should help people out of poverty seems instead to worsen it.

Oil and gas exploration has brought profits for some, but not led to improvements for the poor. The Niger Delta region of Nigeria, for example, has abundant oil. Yet the region is experiencing severe environmental damage, conflict, and poverty.

“Few oil-rich developing countries in Africa have seen lasting benefits as a result of oil and gas,” said Rashmi Mistry of CAFOD last week. “Looking at the top three oil- and gas-producing countries in sub-Saharan Africa — Nigeria, Angola, and Equatorial Guinea — life expectancy is a worryingly low: 43, 41, and 43 years respectively. Civil- society groups are often not able to speak out and criticise or challenge how revenues have been spent.”

ActionAid wants AngloGold Ashanti to take action on environmental damage; provide adequate compensation for those affected; and work more closely with communities in mining areas. It is also campaigning for tougher domestic company laws worldwide, and “for new international laws to regulate corporations and their subsidiaries to help ensure greater respect for peoples’ rights”.

The biggest companies can be strategically important “because they influence industry practices”, CAFOD says. It wants details of contracts and payments to governments to be published, so that the people of gold-rich countries can see who is profiting from their natural resources, and for the gold industry to set robust environmental and social standards.

“It is important for gold-mining companies and jewellery retailers to see that there is public concern, and pressure that may effect everything from demand for their products to their share price,” says Ms Mistry.

Africa is being systematically plundered of its wealth. Corruption has played a part, but so, too, have the activities of transnational corporations. And the two are often linked.

The new Companies Act, which passed into law last week, is a success for aid agencies and individuals who have been pressing for legal changes to make companies more accountable. The Act means that companies now have to report on the impact of their activities on workers, communities, and the environment — not just on the interests of their shareholders. Campaigners did not get all that they had pressed for, but the activities of transnational corporations should now be more transparent and accountable.