KWAME NKRUMAH UNIVERSITY OF SCIENCE AND TECHNOLOGY COLLEGE OF AGRICULTURE AND NATURAL RESOURCE FACULTY OF RENEWABLE NATURAL RESOURCES DEPARTMENT OF SILVICULTURE AND FOREST MANAGEMENT THE PERCETIONS OF LIKELY SOCIO-ECONOMIC IMPACT OF ANGLOGOLD ASHANTI LTD’S (AGA) MINE CLOSURE ON THE OBUASI MUNICIPALITY Angyobore, Samuel November, 2016 i THE PERCETIONS OF LIKELY SOCIO-ECONOMIC IMPACT OF ANGLOGOLD ASHANTI LTD’S (AGA) MINE CLOSURE ON THE OBUASI MUNICIPALITY Thesis submitted to Kwame Nkrumah University of Science and Technology in partial fulfilment for the degree of Master of Philosophy in Natural Resources and Environmental Governance. Angyobore, Samuel. BA. Geography and Rural Development November, 2016 ii DECLARATION I declare that this project was personally written by me under supervision. It has not been copied from any one. I undertook the entire study herein submitted and therefore assume responsibility for any error found in it. Angyobore, Samuel (PG9077813) .................................. …........................ (Student name and Index Number) Signature Date Aminu Dramani ............................... ............................ Supervisor Signature Date Dr. Emmanuel Acheampong ………………… …………………… Head of Department Signature Date iii ABSTRACT Mining has a long and important history in Ghana, and gold in particular has played a key role in the country’s development. Mining and minerals has been a major source of economic growth and especially in towns and communities directly affected by mining operations. The Obuasi Municipality is rich with gold resources which have been mined commercially since 1897. In 2014, AGA Ltd restructured and downsized the Obuasi Mines to 39% of the original concession area of 475km2 and it resulted in more than 3500 workers being laid off. In this study, Case Study and Triangulation approach were adopted to investigate community perceptions of the likely socio-economic impacts in the eventual closure of the AGA Ltd mining operations in the Obuasi Municipality. Using questionnaires, data was elicited from 105 respondents in 11 communities while qualitative data was obtained through In- depth Interviews, Focus Group Discussions and Key Informants from 6 purposively selected communities in the Obuasi Municipality. The study results revealed that 90% of the respondents perceived adverse impacts of mine closure on the Municipality and in particularly, 88% agreed that the closure of the mine would worsen the poverty situation in mining communities. The findings of the study revealed lack of diversification of the local economy of the Obuasi Municipality due to over dependency on mining. The study therefore concluded that there has not been deliberate policy interventions in providing alternative economic opportunities that could sustain the Municipality in the event of mine closure. This study recommended that timely measures are designed to provide sustainable and alternative economic opportunities through diversification of the local economy of Obuasi. Additionally, Integrated Mine Closure Planning should be adopted and implemented through stakeholder engagement as a mitigation strategy towards solving problems associated with mine closures in Ghana. iv DEDICATION I dedicate this work to my parents- My mother and late father (Mr. and Mrs. Angyobore) and all supportive family members especially my wife and my three children and all friends who gave me their support throughout the period that this project was being undertaken. v TABLE OF CONTENTS DECLARATION ............................................................................................................. iii ABSTRACT ...................................................................................................................... iv DEDICATION .................................................................................................................. v TABLE OF CONTENTS ................................................................................................... vi List of Tables ...................................................................................................................... x Table 4.1: Purposively Selected Communities ………………………….50 ............... x List of Figures .................................................................................................................... xi List of Maps ...................................................................................................................... xii ACKNOWLEDGEMENTS ...........................................................................................xiii CHAPTER ONE ............................................................................................................... 1 INTRODUCTION ............................................................................................................ 1 1.1 BACKGROUND TO THE STUDY .......................................................................... 1 1.2 PROBLEM STATEMENT ........................................................................................ 4 1.3 JUSTIFICATION OF THE STUDY ......................................................................... 6 1.4 RESEARCH QUESTIONS ........................................................................................ 7 1.5 THE OBJECTIVES OF THE STUDY ..................................................................... 8 2.0 CHAPTER TWO ........................................................................................................ 9 LITERATURE REVIEW ................................................................................................ 9 2.1 THEORETICAL FRAMEWORK ............................................................................ 9 2.2 MINE CLOSURES ................................................................................................... 14 2.3 MINE LIFE CYCLE ................................................................................................ 19 2.4 MINING AND SUSTAINABLE DEVELOPMENT OF COMMUNITIES ........ 21 2.5 AGA LTD SUSTAINABILITY APPROACH ........................................................ 24 2.6 CORPORATE SOCIAL RESPONSIBILITY (CSR) AND SOCIAL LICENSE TO OPERATE (SLO) ..................................................................................................... 25 2.7 INTEGRATED MINE CLOSURE PLANNING ................................................... 27 2.8 MINE CLOSURES EXPERIENCE IN SOME REGIONS .................................. 29 2.8.1 MINE CLOSURE IN CORNWELL - UNITED KINGDOM ............................ 29 2.8.2 MINE CLOSURE IN PAPUA NEW GUINEA-ASIA ........................................ 30 vi 2.8.3 MINE CLOSURE IN SPAIN ................................................................................ 31 2.8.4 MINE CLOSURE IN CANADA ........................................................................... 32 2.9 TEMPORARAY CLOSURES ................................................................................. 32 2.10 AGA’s MINE CLOSURE APPROACH ............................................................... 33 2.11 STAKEHOLDER ENGAGEMENT ..................................................................... 34 2.12 AGA LTD STAKEHOLDER ENGAGEMENTS ................................................ 36 2.13 IMPACT OF MINING ON THE ECONOMY OF GHANA .............................. 38 2.14 THE MERGER OF ANGLOGOLD AND ASHANTI GOLDFIELD COMPANY (AGC) ......................................................................................................... 41 3.0 CHAPTER THREE .................................................................................................. 42 METHODOLOGY ......................................................................................................... 42 3.1THE STUDY’S SCOPE ............................................................................................. 42 3.2 PROFILE OF STUDY AREA: OBUASI MUNICIPAL ....................................... 42 3.3 THE LOCATION AND SIZE OF THE OBUASI MUNICIPAL ......................... 43 3.4 POPULATION .......................................................................................................... 47 3.5 AGRICULTURE ...................................................................................................... 47 3.6 MINING SECTOR ................................................................................................... 48 3.7 SERVICE AND COMMERCE ............................................................................... 49 3.8 THE RESEARCH DESIGN..................................................................................... 49 3.9 SOURCES OF DATA ............................................................................................... 51 3.10 SAMPLING DESIGN ............................................................................................. 53 3.11 METHOD OF DATA COLLECTION /COLLECTION INSTRUMENTS ...... 55 3.12 DATA ANALYSIS .................................................................................................. 56 3.13 LIMITATIONS OF THE STUDY ........................................................................ 57 4.0 CHAPTER FOUR ..................................................................................................... 59 STATEMENT OF RESULTS ........................................................................................ 59 4.1 ETHNICITY OF RESPONDENTS ......................................................................... 59 4.2 ACCOMMODATION AND HOUSING