The upcoming end of a ban on small-scale mining in Ghana will increase the difficulties in countering illegal mining in the country, with the practice likely to remain widespread, says research firm BMI.

In turn, this will create potential risks to cocoa production and threaten social stability in some regions of Ghana.

The government of Ghana’s decision to lift a ban on small-scale mining, announced in May, which will be implemented before the end of the year, will bring added headwinds to the fight against illegal mining in the country.

This will hamper the efforts of security forces by making the identification of illegal miners much harder, thereby adding to the difficulty in “cracking down on the practice and notably [leave] inadequate resources for law enforcement”.

The ongoing prevalence of illegal mining in the country could threaten Ghana’s agricultural production, increase the risk of social unrest and heighten potential for ethnic tensions between the Chinese workers in Ghana and the local population.

BMI further noted that the risk will become especially prevalent if the impression grows that the government is unwilling to act against Chinese illegal miners, as it is reluctant to “crack down hard” on the citizens of its biggest trade partner and major foreign investor.

However, in light of the latest development, which BMI believes risks increasing the prevalence of illegal mining, BMI has downgraded its Short-Term Political Risk Index (STPRI) score for social stability slightly from 45 out of 100, to 42.5, thereby bringing the overall STPRI down to 71, from 71.7.

Further, BMI believes the crackdown on illegal mining will remain largely unsuccessful in the coming quarters, with efforts devoted to countering the practice set to be hampered by several key factors.

The first is the government’s decision to lift a ban on artisanal mining, after coming under extensive pressure from legitimate small-scale miners.

“We believe this will complicate the identification and prosecution of illegal miners, as the distinction between legal and illegal artisanal miners is often unclear,” BMI said.

The ban, the firm explains, was instituted in the first place to help the government insolate illegal miners and, with it gone, many illegal miners will be able to use the ambiguity to resist detection and prosecution.

The end of the ban, BMI added, will also make the process of identifying illegal miners much harder for security forces, as rather than investigating small-scale miners, the small task force will have to gather much more intelligence before launching any operations against miners, giving these more time to temporarily shut down operations or flee.

Secondly, BMI notes that the military task force assigned to counter illegal mining in Ghana is too small and poor and that relations between different branches of the security forces make the sharing of information and the coordination of efforts difficult.

The illegal mining task force comprises only about 400 members and, despite having arrested around 1 200 illegal miners in 2017 and early 2018, local media in Ghana estimates that there are as many as 200 000 illegal miners operating across the country.

The efforts of the task force against illegal miners will be further complicated by poor relations and overt hostility between the different branches of law enforcement and the security forces, BMI warned.

“Finally, we believe that the government may avoid the arrest or prosecution of the many Chinese illegal miners for fear of undermining Chinese support for government programmes and major economic projects,” BMI stated.

The Chinese government and Chinese banks are funding large parts of the government’s policy pledges, including much of the government’s flagship One District, One Factory policy, the research firm added.

The Ghanaian government has further helped to broker about $15-billion worth of Chinese investments, which is likely making it more difficult for Ghana to arrest and imprison Chinese citizens without causing difficulties with the Chinese government.

“Indeed, there are numerous reports in local media of Chinese miners being released soon after arrest. Although officially, the Ghanaian government has affirmed its commitment to stamp out the practice, in reality, there is a limit to how far they can pursue Chinese citizens without risking damaging relations with China, potentially undercutting growth prospects,” BMI added.

Meanwhile, BMI explained that mining presents risks to long-term agricultural production, as the use of mercury and other dangerous chemicals by illegal miners is causing the pollution of rivers, agricultural land and food supplies.

Ghana’s cocoa producing areas overlap extensively with gold deposits, meaning that illegal mining activity often takes place on or near cocoa-producing areas.

Consequently, when cocoa prices have been weak and gold prices high, farmers have often been willing to sell or lease land to miners, BMI noted.

With cocoa as one of Ghana's chief exports and a major driver of economic growth, it underscores the risks to the economy if cocoa production is seriously impacted.

“Indeed, Ghana’s official cocoa buyer, Cocobod, has said the pollution of agricultural land by illegal miners is the main threat to cocoa production and that if illegal mining persists on its current scale, it is anticipated that long-term agricultural production and economic growth could be negatively impacted,” BMI explained.

With the agricultural sector a major driver of employment, the research firm highlights that the likely failure of the government to crack down on illegal miners will increase the risk of social unrest enormously.

“The destruction of agricultural land and the actions of illegal miners have already resulted in outbreaks of violence,” BMI lamented.

In addition, the ethnic dimension to illegal mining could become an especially significant problem as there are already stories in Ghanaian local media about female Chinese illegal miners using young women to entrap and then blackmail officials, leaving them immune to law enforcement.

This results in protests against Chinese miners in some regions, BMI said.

Male Chinese illegal miners are, meanwhile, widely reported to be having children with locals before abandoning them, thereby further creating local resentment.

“These types of stories, whether true or not, intensify the distrust that already exists over the effects of illegal mining on agriculture and water supplies,” BMI noted.

“What’s more, if the government is perceived as unwilling or unable to crack down on Chinese illegal miners, then the risk of large-scale violent attacks on Chinese people cannot be ruled out,” the research firm concluded.