Anything that keeps working for more than a century is worthy of note. That includes the Obuasi gold mine in Ghana. Dating back to 1897, it was well past the 100-year mark before owner AngloGold Ashanti put it on care-and-maintenance last year due to high production costs.
Now there is talk of reopening it as a joint venture between AngloGold and Randgold. If the deal moves forward, each of the two partners will share equally in redevelopment costs and future output. The capex is likely to be US$600 million plus another US$400 million for sustaining capital. Already, Randgold says the potential resource may run to 6 million oz of gold in ore grading 8 g/t to 12 g/t, or four times what it was when the mine closed.
Reopening the Obuasi mine is not without its challenges. Speaking at a luncheon in Johannesburg, South Africa, this week, Randgold CEO Mark Bristow told his audience that the mine lacked a social licence to operate and was “in conflict with everyone.”
The lack of social licence might be expected given how the mining industry operated in the latter part of the Nineteenth Century. It used to be that mining moved in, the local communities were forced out, and the profits went directly to the owners’ pockets.
Shaping a social licence after a century of conflict will not be easy. To get the task accomplished will mean adopting compromise in all of its meanings. There will have to be compromise on the operators’ side to remediate the environmental legacy and safeguard it going forward, to share the economic benefits of a reopened mine, and to ensure the future of the local communities.
For their part, the people near the mine site must be able to forgive past transgressions and move toward mutually satisfactory goals. There is no turning back the clock nor is there any reason not to move forward. Let’s hope those who are not part of the local community allow those who are to deal directly and openly with the project operators.
The attitude toward corporate social responsibility among large mining companies is so much changed over the last century – and even the most recent decade – that there is every reason to hope that a new life for the Obuasi mine will bring prosperity to the community as well as the joint venture partners.
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