17 January 2014

Ghana: Obuasi Mine Faces Closure

FEAR AND PANIC have gripped the people of Obuasi following reports that the management of Anglo Gold Ashanti (AGA) is considering shutting down its Obuasi mine if production fails to rise within the next two months.

The recent threat by the mine follows an earlier decision, which saw about 430 workers of the mine losing their jobs.

Obuasi's production has seen continuous decline since 1995 in terms of total ounces of gold from its open pit operation. That of the underground, The Chronicle gathered, had also seen consistent decline since 1998.

The mine's performance has, therefore, not met merger expectations since 2004. The 25 percent fall in gold prices last year has also exacerbated the situation in the forward march of the company.

The Chairman of the Ghana Mine Workers Union, Mr. Kwarko Mensah Gyakari, who confirmed the story to this paper said though the management of AGA had verbally informed the Union about its intention to close down the mine, it (Union) was yet to receive an official correspondence from the mining giant.

"Yes, they've hinted us but what I can assure you is that we will scrutinize the proposal very well and ensure that workers get the best offer should an official correspondence get to us."

He added that the management had scheduled a meeting with the workforce where, they (workers) are expected to be informed of the latest development.

A management member who spoke to the paper on condition of anonymity said there was little the company could do under the current situation. It would be recalled that, the Senior Vice President of Anglo Gold Ashanti, Ghana, Mr. Mark Morcombe, during a presentation in Obuasi last year, under the theme: "Renewing the Obuasi Mine; Managing Challenges through Innovation and Best Practices", announced that an exercise had been completed to understand the labour structure required for the mine.

"In the short-term, we intend to right-size the operation; and in the medium-term, to transition the operation to a modern, productive mine," he said.

"The transition to mechanization will, regrettably, also result in a phased process of retrenchments over the next two years due to a combination of decline in gold price, increased overall labour cost, and the increase in other input costs such as power and materials.

"AngloGold Ashanti is mindful of the impact this process will have, though it remains necessary to create a sustainable operation that is able to sustain high-quality jobs and support the economy for decades to come."

Meanwhile, a number of traders have threatened to relocate to other cities as they fear if the threat by the mining company is carried through, it would affect their businesses. They are, therefore, appealing to the President to intervene in ensuring that the mine was not shut down.

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