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INDABA 2025: How can Ghana combat illegal mining?18 February 2025

This article was authored jointly by WFW and leading Ghanaian law firm Kimathi and Partners.

Illegal Mining: The Global Context

Illegal mining refers to the unregulated or unauthorised extraction of valuable minerals, metals or resources from the earth. It is carried out without legal permits, outside the boundaries of regulatory frameworks, or in violation of state law as defined in UNDOC Response Framework on Illegal Mining. Drivers of illegal mining include poverty, organised crime, high global demand for minerals, lack of employment opportunities and weak enforcement of mining regulations.

Illegal mining manifests in various forms, ranging from artisanal activities to organised syndicates running large-scale operations. These activities may occur in protected areas, on private land without consent or in direct competition with legitimate mining enterprises. In many cases, illegal mining involves rudimentary and hazardous methods, endangering individuals, local communities and surrounding environments. Whilst illegal mining is often capable of providing a source of livelihood, it largely undermines sustainable development, deprives governments of vital revenue, destabilises formal mining operations and can lead to significant economic, social and environmental harm.

The Unique Context of Galamsey in Ghana

"In Ghana, unregulated mining, commonly referred to as “galamsey”, has become a critical issue."

In Ghana, unregulated mining, commonly referred to as “galamsey”, has become a critical issue, arising from a combination of historical, economic, environmental and regulatory factors. Ghana’s galamsey crisis is widely accepted to have escalated into a national emergency, with unregulated artisanal and small-scale mining causing severe environmental destruction and social instability. Whilst the section 83 of the Minerals and Mining Act, 2006 (Act 703) permits small-scale mining only by Ghanaian citizens aged 18 or older who are registered with the Minerals Commission, in practice, many miners operate outside these legal requirements.

Galamsey operations, often conducted in gold-rich areas such as the Ashanti, Eastern and Western regions, have led to the contamination of major water bodies, including the Pra, Ankobra and Birim rivers, due to the excessive use of mercury and cyanide (see Asian Journal of Toxicology, Environmental and Occupational Health). These illegal mining activities have also degraded the Offin Shelter Belt Forest Reserve, leading to deforestation as miners cut down trees to access gold deposits and fail to reclaim mined areas or replant trees, as required by law.¹

Illegal mining also leads to significant losses in Ghanaian government revenue as miners evade taxes, royalties and regulatory fees, depriving the government of crucial funds needed for development projects and essential services.² The informal nature of illegal mining makes it difficult for the government to track and collect revenue effectively. This loss creates a cycle where limited funds hinder law enforcement efforts, allowing illegal mining to persist.

In terms of social impact, the practice perpetuates child labour and creates unsafe working conditions and social unrest. Politically, it can erode trust in government institutions tasked with enforcement. With gold accounting for over 90% of Ghana’s mineral exports and the mining and quarrying sub-sector contributing 17.1% to Ghana’s year-on-year GDP growth in Q3 2024,³ the unchecked growth of galamsey threatens not only environmental sustainability but also the national economy, as it relies so heavily on the mining sector.⁴

From Campaigns to Policies: illegal mining and its influence on Ghana’s political landscape

Illegal mining became a pivotal issue in Ghana’s recent election, due to a perceived inability by the previous government to implement effective and lasting solutions. Despite initiatives such as the establishment of the Inter-Ministerial Committee on Illegal Mining (“IMCIM”), allegations of inconsistent enforcement and corruption undermined public confidence.⁵ Growing public frustration became clear through widespread protests, with communities demanding accountability for the pollution of water bodies, destruction of farmland and loss of livelihoods linked to illegal mining activities.

In response, the newly elected government pledged in its manifesto to adopt a more transparent, environment-driven approach to combating illegal mining. Their aim is to enact policies to prevent damage to water bodies and other natural resources whilst still creating jobs, especially for young people in rural areas. They plan to collaborate with local communities, traditional leaders, environmental groups and experts to promote stronger enforcement, responsible mining and alternative livelihoods. Although the effectiveness of these measures remains to be seen, the government has pledged to ensure law enforcement operates without political interference and to create long-term solutions that protect the environment and benefit future generations.⁶

Corporate Incentives

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"Failure to comply could lead to trade restrictions and reduced export access to European markets."

Mining companies operating in Ghana have strong incentives to prevent illegal mining, aligned with the economic incentives for the government and the increasing global emphasis on corporate accountability for environmental, social and governance (“ESG”) issues. Illegal mining directly impacts operations, reputation and long-term sustainability, with an ever-shrinking global market for minerals which do not comply with international standards.

Compliance with EU regulations, such as the EU Forced Labour Regulation and the Corporate Sustainability Due Diligence Directive, is crucial, as failure to comply could lead to trade restrictions and reduced export access to European markets. These regulations require in-scope companies to, among other things, ensure that their supply chains are free from human rights abuses, including forced labour, which is often linked to illegal mining activities.

Similar laws restricting the import of goods produced with forced labour are already in place in several other countries, although there is significant variation in how actively customs authorities investigate claims. Supply chain due diligence legislation is also likely to be introduced in some other countries within the next few years, including Canada and South Korea.

"Businesses can also face significant litigation risks if they fail to address illegal mining in their operations."

Businesses can also face significant litigation risks if they fail to address illegal mining in their operations. For example, the London Bullion Market Association (“LBMA”), which represents a significant portion of the global precious metals market, is currently facing legal proceedings over its involvement with gold that may have originated from illegal mining operations. It is alleged that the LBMA failed to enforce adequate responsible sourcing standards among its members.⁷ The claimants argue that, by failing to ensure traceability and transparency in the gold supply chain, the LBMA supported illegal mining and related adverse human impacts.

Conversely, by proactively addressing illegal mining, companies can differentiate themselves as industry leaders committed to sustainability and ethical practices, thereby attracting conscious investors and consumers who prioritise ESG factors.

International Strategies and Viability in Ghana

International strategies to combat illegal mining are increasingly focussed on a combination of regulatory and community-based initiatives. Illegal mining is a systemic issue with multiple drivers, and efforts to address it must take a holistic, ecosystem-based approach. This approach includes not only regulating and monitoring activities but also providing sustainable alternatives, fostering international collaboration and integrating technological innovations.

"Illegal mining is a systemic issue with multiple drivers, and efforts to address it must take a holistic, ecosystem-based approach."

These strategies offer valuable insights that could address illegal mining in Ghana. However, the practicality of these solutions is often challenged by local realities, including entrenched political interests, limited resources and the unique socio-economic dynamics of affected communities. These roadblocks may hinder the effective application of global approaches, requiring careful adaption to Ghana’s unique context.

We set out below some examples of strategies that have been developed to curb illegal mining and how they may be adapted to Ghanaian circumstances:

  1. Streamlining licensing procedures: The Rwandan government introduced a centralised system to make licensing more efficient and accessible, incentivising artisanal miners to transition into the formal economy. A potential approach for Ghana could be to decentralise the licensing regime and streamline the approval process for small-scale mining. This would involve shifting authority from the national head to district or regional managers, ensuring quicker approvals and better oversight of concessions.⁸ However, challenges may include potential resistance from bureaucratic institutions that benefit from centralisation, inconsistent application across regions, the risk of localised corruption without adequate oversight and the limited expertise and resources at certain district offices.
  2. Implementation of comprehensive mine closure plans: Preventing the improper abandonment or closure of mines could avoid attracting illegal mining activities. For instance, the closure of the Grootvlei gold mine near Johannesburg incorporated a structured mine closure plan aimed at reducing illegal activity.⁹
  3. Tackling smuggling: Preventing the smuggling of mining equipment into Ghana for illegal activity via a robust tracking, permit and enforcement system, could significantly reduce the prevalence of galamsey. However, Ghana currently lacks a comprehensive tracking system for such equipment and statutory amendments will be needed to improve monitoring mechanisms. Effective enforcement would require coordination among multiple agencies, including customs, the Ministry of Lands and Natural Resources and local governments, which could create logistical and bureaucratic challenges.
  4. Regional task forces and community policing: Establishing regional task forces to crack down on illegal mining could help protect licensed operators and enforce anti-mining laws, with traditional authorities leading the efforts to ensure local accountability. These task forces would be more familiar with local dynamics, presumably improving the detection and reporting of illegal mining activities. However, potential roadblocks could include the risk of corruption or abuse of power, a lack of proper training and resources, and potential resistance from local mines who may view the task forces as a threat to their livelihoods. To ensure effectiveness, such task forces must focus on preventing political interference or bribery and aligning with community interests to minimise resistance.
  5. Investment in technology to monitor illegal mining operations: Using satellite imagery, drones, AI-driven surveillance tools and blockchain tracking tools to ensure buyers are purchasing responsibly sourced materials, such as De Beers’ blockchain diamond tracking¹⁰ could effectively supplement the above. However, this would require extensive investment and technology transfer, likely requiring public-private partnerships to ensure successful implementation. Additionally, such investments may trigger registration with the Ghana Investment Promotion Centre (“GIPC”), aligning with the country’s framework to encourage and regulate foreign investments.
  6. Providing miners with the tools to operate legally and sustainably: Education programmes, such as the Fairmine Certification developed by the Alliance for Responsible Mining (“ARM”), can help artisanal miners understand and comply with legal requirements.¹¹ The Impact Facility, a social enterprise, incentivises continuous ESG improvements at mining sites by facilitating access to equipment and working capital.
  7. Alternative livelihoods: Providing alternative livelihood options, by investing in agriculture and small-scale industries in mining communities, could reduce dependence on illicit activities and promote sustainable economic growth. The Livelihoods Restoration Programme implemented in the Philippines under the Minahang Bayan initiative includes training in alternative livelihoods such as aquaculture and farming, as well as supporting the development of financial literacy and environmental practices.¹² A key challenge would be securing government approval for investments in training, infrastructure and market access necessary to implement such an initiative. However, in theory, an increase in legal mining activities could effectively self-fund these efforts through increased tax revenue and the potential to impose local development fund requirements on bigger investors. Coordination between different levels of government in Ghana also poses a regulatory challenge, as inconsistent policies and limited communication can hinder the effective enforcement of mining regulations. Socially, rural mining communities may resist shifting away from mining due to cultural ties and economic dependence on the industry. However, sufficient tangible benefits through reinvestment into local communities and effective consultation with local communities to understand their investment priorities could significantly increase support for a shift.
  8. Government incentives: To incentivise Ghanaian companies and communities to act against illegal mining, the government could implement tax breaks or reductions for businesses investing in sustainable methods like waste management and water conservation. In practice, this would reduce operational costs for companies that adopt environmentally friendly methods, making it financially attractive for them to move away from harmful practices linked to illegal mining. Grants or low-interest loans could also encourage the formalisation of small-scale mining through cooperatives, improving safety and operational standards. Reinvesting part of the tax take back into local communities which act against illegal mining is key to driving change.
  9. Encouraging investment from foreign businesses: Providing a transparent regulatory framework would facilitate compliance with international standards, thereby attracting market access. Tax incentives or subsidies could also encourage investment in local worker training and creating a sustainable workforce. Additionally, reduced import duties could also assist with investing in infrastructure that benefits both legal mining and local communities.
  10. Public-private partnerships: Fostering collaboration on sustainable mining allows companies to gain recognition and enhance their corporate social responsibility profile.

Conclusion

"If relevant stakeholders can work together, leveraging policy, practical solutions and financial tools, there is potential to curb the incidence of illegal mining."

Illegal mining is a systemic issue with many causes and negative outcomes. However, if relevant stakeholders can work together, leveraging policy, practical solutions and financial tools, there is potential to curb the incidence of illegal mining. This would enable Ghana to make the most of opportunities to attract foreign investment, increase revenues and create lasting value through shared infrastructure, particularly bringing significant value to local communities who support the shift.

London Trainee Solicitor Lorraine Mintah contributed to this article.

[1] Boadi, Samuel, Collins Ayine Nsor, Osei Owusu Antobre, and Emmanuel Acquah. “An Analysis of Illegal Mining on the Offin Shelterbelt Forest Reserve, Ghana: Implications on Community Livelihood.” Journal of Sustainable Mining 15, no. 3 67 (2016): 115-19. https://doi.org/10.1016/j.jsm.2016. 12.001 accessed 22 October 2019. cited in Daniel Atobrah Bondah, Natural Resource Exploitation and National Security: A Case Study of Illegal Mining in Ghana, (Master’s Thesis, US Army Command and General Staff College 2020) https://apps.dtic.mil/sti/pdfs/AD1124575.pdf accessed 20 January 2024
[2] Hilson, G., & Potter, C. Structural adjustment and subsistence industry: Artisanal gold mining in Ghana. Development and Change, 36(1), 103-131 (2005) cited in Daniel Atobrah Bondah, Natural Resource Exploitation and National Security: A Case Study of Illegal Mining in Ghana, (Master’s Thesis, US Army Command and General Staff College 2020) https://apps.dtic.mil/sti/pdfs/AD1124575.pdf accessed 20 January 2024
[3] https://statsghana.gov.gh/gssmain/fileUpload/National%20Accounts/Newsletter_Quarterly_GDP_2024_Q3_December%202024%20Edition_GSS.pdf
[4] https://www.trade.gov/country-commercial-guides/ghana-mining-industry-equipment#:~:text=Ghana%27s%20mining%20sector%20pre%2Ddates,ilmenite%2C%20magnetite%2C%20and%20rutile
[5] https://www.transparency.org/en/projects/climate-governance-integrity-programme/climate-corruption-atlas/media-campaign-against-officials-complicit-in-ghanas-fight-against-illegal-mining
[6] https://resourcegovernance.org/articles/mining-and-energy-reforms-strategic-priorities-ghana-under-president-mahamas-government#:~:text=The%20Minister%20of%20Energy%20terminated,sector%20has%20shown%20promising%20growth
[7] https://www.leighday.co.uk/media/vqzhao1s/lbma-legal-briefing-final-13-dec.pdf
[8] https://www.rmb.gov.rw/updates/news-detail/why-rwanda-mining-registered-record-growth-despite-covid-19-1
[9] https://www.scielo.org.za/scielo.php?script=sci_arttext&pid=S2225-62532018000400017
[10] https://www.debeersgroup.com/sustainability-and-ethics/leading-ethical-practices-across-the-industry/tracr
[11] https://www.scsglobalservices.com/services/fairmined-gold-certification
[12] https://www.planetgold.org/sites/default/files/planetGOLD%20-%20PH%20Technical%20Report%2-%20FINAL.pdf

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