ANGLOGOLD Ashanti has sought international arbitration in order to save operations at Obuasi following a deterioration in security at the mine, situated in Ghana.
In a statement to the Johannesburg Stock Exchange, AngloGold said a request filed with the Washington-based International Centre for Settlement of Investment Disputes (ICSID) on April 8 had been filed on Monday (May 2).
The gold producer said the future of Obuasi was at stake after it had failed to persuade a number of Ghanaian cabinet members to restore army protection at the operation.
Illegal mining has been an ongoing problem at Obuasi since at least 2013 when the Ghanaian army was first installed there, but security has been heavily compromised since February, the month army protection was withdrawn.
In that month, the company’s head of corporate affairs in its Ghana office, John Owusu, was killed during a riot involving artisanal miners who were attempting to invade further areas of the mine. AngloGold was forced to withdraw most of its key personnel for a while.
Said AngloGold: “If allowed to continue unchecked, this occupation of the lease area by illegal miners significantly undermines investor confidence and gravely threatens the long-term viability of the mine”.
It added that it “… may be forced to withdraw all essential personnel currently on site, including personnel operating the mine’s underground water pumps, and suspend critical services to the mine and community.
AngloGold placed Obuasi in mothballs last year followed an extended period of restructuring. It then resolved to find a joint venture partner with the purpose of recapitalising the 30 million oz operation into a smaller, profitable mine.
Randgold Resources kicked the tyres but decided not to invest as a joint venture partner with the company commenting during the process that the mine had “no social licence”.
Quite how this will affect the chances of AngloGold attracting a partner to help it mine Obuasi in the long-term is now a moot issue given the scale of the social problems.
The role of the Ghanaian government in the matter must be perplexing to AngloGold which commented today that it had engaged “on numerous occasions” since February with cabinet ministers including ministers responsible for Lands and Natural Resources, and Defence.
“Despite these engagements, and the fact that His Excellency the President of Ghana directed the return of security agencies in March, law and order is yet to be restored,” said AngloGold.
The ICSID is an international arbitration institution which facilitates dispute resolution between international investors and host states, said AngloGold. “The relevant authorities in Ghana, including the Attorney General, have been duly notified of the commencement of proceedings,” it added.
