Gold in Ghana, A Mining Town

Gold really doesn’t have a of a lot of practical uses other than dental fillings (Now replaced with synthetics) and some electronics.  Mostly, it looks nice.  It is durable and soft, so easy to shape into jewelry, doesn’t corrode and continues to hold an allure for many.

Spain’s brutal conquest of the New World was driven in large part by the desire to haul as much gold back to Spain as possible.  The Spaniards raped, pillaged and burned, bringing with them diseases that decimated the local population,  In return they took back to Europe syphilis and the habit of smoking, which seem like just but not sufficient desserts.   Gold and silver, pillaged from the Mayans and Aztecs, worth about $4 BN and $7 BN in today’s dollars respectively, funded a high consumption lifestyle for wealthier Spaniards which the royal court enjoyed.  When the gold ran out, the country’s economy collapsed after a stretch of very high inflation (likely driven by the influx of gold).  Maybe that was just desserts.

The English got their hands on some of this loot through authorized pirating operations – Queen Elizabeth I was tight with Sir Francis Drake, giving him his title after he brought home enough booty to fund her court – but not enough to distort their economy before the gravy train dried up.  Maybe that was blind luck.

The California gold rush in the mid 1800s funded much of the Civil War, spurred the largest internal migration in U.S. history, and wreaked havoc on the State’s ecosystem.  Hydraulic mining (That would be hosing down a mountainside with high pressure water), washed billions of tons of silt into the San Francisco Bay, destroying 1,000s of acres of wetlands and irrevocably changing its shape.

Then there is the gold standard. This is the idea that every dollar in circulation should be backed by the equivalent amount of gold, stored in Fort Knox (which James Bond prevented Goldfinger from taking down in the 1964 film), in part because government cannot be trusted to manage something as essential as our money supply prudently.  Gold standard backers point out that our current arrangement is just one big confidence trick: a dollar is worth a dollar because someone says so.  We all believe this and continue to use the currency when it fact its intrinsic value is, well, not worth the paper it is printed on.

Wheelbarrow of money in Somalia

This setup is called a “Fiat Currency” and is the way most of the world’s economies work today.  When folks stop believing in the value of a currency, very bad things can happen (Economically speaking), including total financial collapse.  A wheelbarrow of notes to buy a loaf of bread.

So the idea that money should be backed by something of enduring value is appealing.  However, the difficulty with this argument is twofold:  a. there is no intrinsic worth to an ounce of gold, other than the fact that it looks beautiful, so it is a kind of Fiat Currency itself; and b. we now have way too many dollars in circulation now to find the gold to back them up with.  We are unlikely to return to the gold standard anytime soon.

Gold in Ghana

Here in West Africa, the Ashanti, running their eponymous empire, figured out that they were living near large deposits of gold and how to mine, refine and work gold into beautiful jewelry and religious items that were traded throughout West and North Africa.  Theirs was a powerful, highly organized kingdom with a hierarchical government, roads, communication networks, a police system and well developed agrarian economy.  Gold and gold products were a major export of the Ashanti kingdom, through to the 1700s when slaves became dominant.  Prior to Europeans’ arrival in the 1600s, trade was mostly North across the Sahara desert via a series of intermediaries (e.g. Hausa, Berbers) to Arabs on the North African coast.  You would recognize Kente cloth, a fabric created and traded by the Ashanti and still popular (and beautiful) today.

When the Portuguese showed up in the 1600s, they figured out that there was gold to be had here, and subsequently slaves, and named this section of the coast of Africa the Gold Coast.  Separately, the Ashanti were able traders and defeated local coastal tribes so that they would have direct access to the Europeans.  And proud – the British fought five wars with the Ashanti in the 1800s to a stalemate, due to the kingdom’s military prowess.  Britain gave the nation a fair degree of autonomy within the region that would become the country of Ghana in the late ’50s and when you meet someone here who is Ashanti they are justly proud of their roots.

Today, gold accounts for about 37% of Ghana’s exports and about 5% of its GDP and most of it comes from the Ashanti region of the country.  Ghana equals and sometimes overtakes South Africa’s production, although South Africa has much larger reserves.  The Tarkwa mine where I am writing this  is run by Gold Fields Ltd, itself majority owned by South Africans.

10% of the gold produced is generated by small scale miners who work in dangerous and difficult conditions, degrading local water supplies and generally destroying the environment.  Many of these small scale miners are Chinese: about 50,000 Chinese have immigrated to Ghana in the last 20 years, mostly to mine precious metals, using locals for labor.  5,000 were deported in 2013 and their “Gold Farm” operations shut down.

A Mining Town

The wet season has arrived in this part of the country and every afternoon at about 4 PM we are subjected to a massive downpour that thunders on the tin roofs of the hospital, floods down roadways and cools the humid air by 5 – 10 degrees (Celsius). And then, as quickly as it comes it is done: dark clouds move on, the sky lightens and life goes back to normal.

Moses and Cynthia, who I wrote about in a previous post, run a hospital for a mining effort near Tarkwa, a town in the Southwest of the country.  The Tarkwa mine has been been running continuously since 1961 and the initial mine was dug in the late 1800s; you can still see the headworks for a 1935 mine shaft not far from the hospital where I am writing this.

The hospital has a population of 25,000 under its purview with a mix of specialists and refers complicated cases to a hospital in Cape Coast or Accra.  Its team of midwives and Ob-gyns deliver 8 – 15 babies monthly, with a fair number of C-sections.  The medical staff see a lot of the “modern” diseases – hypertension, diabetes, obesity – nicely exported from the West and this is apparently true throughout Ghana.

The town has some size and has a busy, prosperous feel – the main street is active, lots of pedestrians, folks cooking items for sale on braziers, shops opening onto the street and vehicles coming and going. Employees tell me that the cost of living here is high, even higher than Accra – the wealth that the mining operation generates percolates into the local economy, driving up prices.

 

Comments

  1. Iain Morgan says

    Hugh, greetings from “frosty Canada”.
    Thank you for another well written, well researched and nicely laid out article on gold in Ghana, it’s history and of note the many photos emphasizing the points of the article. Well done and thank you for the extensive work that goes into each of these articles.
    They give me a clear sense of west Africa and some of the volunteer work you do. Thank you for these articles that are extra work but are very helpful to read and see the photos too see that corner of our world.
    God bless you, your time and projects you have volunteered to do.
    Iain

  2. Grace Morgan says

    Brings to mind the great photographs of Sebastian Salgado
    https://publicdelivery.org/sebastiao-salgado-serra-pelada-gold-mine-brazil/

    • Hugh Morgan says

      So true, had meant to reply about you Salgado-like observation, let it slip. Work that none of us think about that gets done (Sadly) all the time.

  3. Hugh, I really look forward to receiving these wonderful, informative and highly engaging accounts of the amazing work that you are doing.
    I’m learning so much.
    Thinking about you and sending good karma your way for the people you are collaborating with.
    All the Best,
    Wanda and Art
    Thanks Grace,for the link to the photos from Brazil

  4. Janie Allan says

    Thanks again Hugh for such interesting material. I’m learning so much! And Grace, thanks for the photos from the Brazilian photographer. I had never even heard of him! I must be living under a rock! Guess I need to get out more!

  5. carol woods says

    reading this as I socially isolate. what a great summary of the gold history here. and Salgado. wow. who knew?thank you hugh and grace.

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