Towards Sustainable Economic Development in the Gold Mining Areas of South Africa and Ghana Adwoa Pokuaa Boaduo A research report submitted to the Faculty of Engineering and the Built Environment, University of the Witwatersrand, Johannesburg, in partial fulfilment of the requirements for the degree of Master of Science in Engineering Johannesbrug, 2017 DECLARATION: I declare that this research report is my own unaided work. It is being submitted to the Degree of Master of Science in Engineering to the University of the Witwatersrand, Johannesburg. It has not been submitted before for any degree or examination to any other University. _________________________ (Signature of candidate) _________ day of ___________, ____________ (day) (month) (year) i ABSTRACT In many mineral resource rich African countries, mining activity makes a significant contribution towards the Gross Domestic Product (GDP) and economic growth. This stimulus gives the mining industry the potential to fuel growth and development. Although some mining areas have been able to experience positive economic growth, many have struggled to achieve and sustain economic development due to the inability to manage mineral wealth challenges. African mining regulatory bodies generally lack proper local planning, resulting in inadequate policy instruments to enable the sector to make a sustainable contribution towards economic welfare. This research investigates how mineral wealth can be used as a catalyst for sustainable economic development. The research presents the case studies of three mining areas with the aim of determining why the economic development of Johannesburg differs substantially from that of Tarkwa and Obuasi. The research gives a comparative analysis of the political economy and socio-economic trends that have transpired in the three areas over the years. It ends by making recommendations on how Tarkwa and Obuasi can better manage the challenges of mineral wealth, and work towards achieving sustainable economic development that is like or even better than that of Johannesburg. ii DEDICATION To the almighty God for the mind and endurance he has given me. I dedicate this dissertation to all my loved ones, especially my family. To my sister Abenaa Boaduo, my brother Dr Nana-Kyei Boaduo and his wonderful wife Millicent, thank you for all your motivation, guidance and support. To my spiritual parents Mr Alex Nsiah, and his lovely wife Vivian, I thank you for the endless prayers. I give special thanks to my good friend Siyamazi Ndlovu and my husband Jamal Issaka for their support. A special dedication and thank you to my late parents Dr Nana-Adu and Mrs. Mary Boaduo who sacrificed endlessly for my education. Thank you, mom and dad, may your wonderful souls rest in peace. iii ACKNOWLEDGEMENTS: I wish to thank my great supervisor Professor Frederick Cawood for his wisdom and guidance. A special thank you to Dr Tony Aubynn, the CEO of the Ghana Minerals Commission for encouraging the topic. I also would like to acknowledge the University of the Witwatersrand School of Mining Engineering for allowing me to conduct this research and providing all necessary resources. iv CONTENTS Declaration .......................................................................................................................... i Abstract .............................................................................................................................. ii Acknowledgements ......................................................................................................... iv List of Figures ................................................................................................................ viii List of Tables .................................................................................................................... ix 1 Background and Outline of the Problem ................................................................ 1 1.1 Introduction .......................................................................................................... 1 1.2 Research Aim and Objectives ............................................................................. 2 1.3 Evaluation of Related Studies ............................................................................. 2 1.4 Benefits of the Research ..................................................................................... 5 1.5 Rationale and Problem Statement ...................................................................... 5 1.5.1 Sustainable Economic Growth and Development ....................................... 9 1.5.2 Gold Mining Areas ..................................................................................... 14 1.6 Research Questions .......................................................................................... 19 1.7 Hypothesis ......................................................................................................... 19 1.8 Research Methodology ..................................................................................... 20 1.9 Report Structure Outline ................................................................................... 21 1.10 Conclusion ......................................................................................................... 23 2 Analysis of Existing Literature .............................................................................. 24 2.1 The Development of Mining Settlements .......................................................... 24 2.1.1 Specialized mining towns .......................................................................... 25 2.1.2 Trade mining towns ................................................................................... 25 2.2 Historic Timeline –The Mining Settlement of Johannesburg ............................ 26 v 2.3 Historic Timeline –The Mining Settlements of Tarkwa and Obuasi .................. 32 2.4 The Challenges of Mineral Wealth .................................................................... 39 2.4.1 Unfavourable External Market Forces....................................................... 40 2.4.2 Dutch Disease ........................................................................................... 41 2.4.3 Political Concerns...................................................................................... 42 2.5 Local Economic Development........................................................................... 42 2.5.1 Local Economic Development in Mining Settlements ............................... 44 2.6 Conclusion ......................................................................................................... 45 3 A Case Study of the South African Mining Area of Johannesburg ................... 46 3.1 South Africa ....................................................................................................... 46 3.1.1 The Witwatersrand Gold Basin ................................................................. 47 3.1.2 Mineral Law and Mineral Tenure in South Africa ...................................... 47 3.2 Johannesburg.................................................................................................... 49 3.2.1 The Johannesburg Mining Industry ........................................................... 51 3.2.2 Mineral-based Local Economic Development in Johannesburg ............... 56 3.2.3 Mining Induced Environmental and Re-settlement Challenges ................ 60 3.3 Conclusion ......................................................................................................... 64 4 A Case Study of the Ghana Mining Areas ............................................................ 66 4.1 Ghana ................................................................................................................ 66 4.1.1 The Ashanti Gold Belt ............................................................................... 67 4.1.2 Mineral Law and Mineral Tenure in Ghana ............................................... 67 4.2 Obuasi ............................................................................................................... 72 4.2.1 The Mining Industry ................................................................................... 73 4.2.2 Mineral-based Economic Development in Obuasi .................................... 76 vi 4.2.3 Environmental Challenges and Mining Induced Re-Settlement. .............. 79 4.3 Tarkwa ............................................................................................................... 81 4.3.1 The Mining Industry ................................................................................... 82 4.3.2 Mineral Based Economic Development in Tarkwa ................................... 86 4.3.3 Environmental challenges and Mining Induced Re-settlement. ................ 89 4.4 Conclusion ......................................................................................................... 91 5 Factors that Influence the ability of Mineral Wealth to catalyse Economic Development. ................................................................................................................... 93 5.1 Comparative Analysis of the Johannesburg, Obuasi and Tarkwa Case Studies 93 5.1.1 Factors of Nature....................................................................................... 93 5.1.2 Investment ................................................................................................. 98 5.1.3 Political Economy