The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™

Ratings update: AngloGold Ashanti, Ghana

As AngloGold Ashanti takes Ghana’s government to international arbitration following artisanal mining incursions at its Obuasi mine, Critical Resource predicts a rocky future for the country’s gold sector.

Key Development

  • In April 2016, AngloGold Ashanti (AGA) filed a request for arbitration with the International Centre for Settlement of Investment Disputes against the Government of Ghana for its failure to maintain law and order at the Obuasi mine. In February, the withdrawal of military forces protecting the site prompted an incursion by hundreds of artisanal miners (known locally as galamsey). Days later, an AGA employee was killed by a retreating company vehicle which was being confronted by a crowd of galamsey.
  • Underground operations at Obuasi have been suspended since 2014 for economic reasons. In December 2015, Randgold backed out of a proposed joint venture with AGA to redevelop the mine. The company will now re-evaluate the feasibility of the mine and hopes at some stage to continue its search for a partner to bring Obuasi back into production.
  • Developments at Obuasi come ahead of presidential elections in November 2016. These look set to be a close race between the ruling National Democratic Congress (NDC) and the New Patriotic Party (NPP).



  • Events at Obuasi highlight the industry’s difficulty in effectively dealing with artisanal and small-scale mining – and the implications this can have for the viability of projects. The galamsey have entered AGA’s main underground mine and damaged infrastructure, forcing the evacuation of all non-critical staff. The situation will further complicate AGA’s attempts to attract investment to the troubled mine.
  • Illegal mining at Obuasi is being fuelled by economic challenges, which have been exacerbated by the suspension of AGA’s operations. Today an increasing number of local people, including some former AGA employees, are trying to eke out livelihoods as galamsey often in highly dangerous conditions. AGA has made efforts to address this by ceding nearly 60% of its concession to help stimulate local economic development (but also in part due to questions over the financial viability of those areas for large-scale operations). The government has suggested that land will be used to accommodate small-scale mining but it has yet to re-permit and formalisation of the artisanal sector has been slow. AGA is also working with a local NGO to engage communities on land use issues and economic benefits.
  • Political dynamics may also be driving events at Obuasi. After flourishing during the boom years, informal miners now represent a considerable voter base. With presidential elections on the horizon, a confrontation could hurt the government’s prospects at the polls. There are also allegations that some politicians have a direct financial stake in the informal mining sector. With politicians seemingly unwilling to take action, there is growing concern over a sense of lawlessness around many of the country’s gold mines.
  • November’s elections will have broader implications for Ghana’s mining sector. Relations between the industry and the NDC have been challenging. The government, whose budget has been hit hard by falling oil, gold and cocoa prices, has backed a number of policies in recent years that have been challenging for the mining sector. This has included an increase in corporate taxes and royalties and reviews of stability agreements. While such policies have been pursued less vigorously during the downturn, an NDC victory could see renewed interest in securing a bigger take from the sector. The rival NPP is generally seen to be more investor friendly.
  • Worsening challenges with informal mining and political uncertainty will make investors cautious about Ghana’s gold sector. While the country remains one of the more stable jurisdictions in West Africa, the short-term outlook for mining companies could be rocky.

This article uses Critical Resource’s LicenseSecure™ model to assess the likely level of political and stakeholder risk. Our updates provide a rapid overview of new or updated ratings in our database, with a focus on projects in the news. Please note that these ratings updates are provisional, based in part on open source analysis and are not from client projects. Full LicenseSecure analyses are in-depth, involve extensive intelligence gathering and are confidential.


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