Security at Obuasi mine worsening

Security at AngloGold Ashanti’s Obuasi mine in Ghana has continued to deteriorate despite efforts by Ghanaian authorities to enforce law and order.

A series of illegal miner takeovers caused the removal of military forces from the site, which had been stationed there as law enforcement since 2013, by the Ghanaian government. The Chamber of Mines also entered into a Memorandum of Understanding with Ghana’s Army to support mine security and police the deployment of military personnel at the mining operation in the country.

Order at the site is yet to be restored despite the company seeking assistance from Ghanaian cabinet ministers including the minister of defence and the minister of lands and national resources. It also comes despite the president of Ghana claiming the return of security personnel in March.

The presence of illegal miners has impacted the operation’s redevelopment plans, which could undermine investor confidence and threaten the mine’s long term viability.

The operation has been forced to invoke the dispute resolution provisions in its Mining Lease to protect its rights from trespassing, property damage, and threats to the safety of its employees, after the company’s Ghanaian head of corporate communications was killed in an accident during unrest at the site.

The miner filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes (ICSID), a US institution that solves disputes between international investors and their host states, on April 8 with the case registered on May 2.

It hopes the ICSID proceedings will push the reinstatement of law and order at the mine.

Following the takeover of illegal miners in February this year, the mine was forced to declare force majeure, withdrawing all employees from conducting non-essential functions to protect their safety. All remaining employees had to perform critical services related to underground water pumping, potable water treatment, providing medical services, and maintaining facilities that provide water and power to employees’ homes and surrounding communities.

If the presence of illegal miners continues, AngloGold could eventually withdraw all workers from the the site, suspending critical resources to the community.

It has not impacted AngloGold’s production and All in sustaining costs as the site was not set to be in production this year.

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