Blog Entry

Ghanaian Farmers Run Out of Patience with Kinross/Chirano Gold Mines

Jamie Kneen

National Program Co-Lead

On October 12, 2012, members of Concerned Citizens of Sefwi and affected farmers in the area of Chirano Gold Mines in Ghana held a news conference in Accra to warn that they would reoccupy their lands that the mining company had taken over if they were not paid overdue compensation – with accrued interest. The farmers say the company has not paid full compensation since 2004, despite repeated legal actions and a regulation passed by the Ghanaian Parliament earlier this year requiring it to pay.

The delay has been very hard for the farmers, according to spokesman Mr. Prince Eric Amoako-Atta. “The leadership of the affected farmers has come under immense pressure as a result of the long delay in getting the compensation paid,” he said at the October 12 press conference.

MiningWatch staff person Jamie Kneen and Board member Jean Symes attended the National Coalition on Mining assembly in Prestea, Ghana, in October 2011, and met with Amoako-Atta and some of the Sefwi farmers, who shared their long, difficult story.

The Chirano mine is located approximately 100 kilometres southwest of Kumasi, Ghana’s second largest city, in southwestern Ghana.

Chirano – now owned by Kinross Gold after it bought out its original owner, Canadian junior mining company Red Back Mining, in 2010 – obtained its lease in April, 2004, and started gold production in October, 2005. According to the group, between 2004 and 2006, the company had paid compensation to some farmers based on a rate of 2.5 Ghanaian cedis per mature cocoa tree (about $1.33 Canadian at current exchange rates) – telling them that it was being generous, since the Government of Ghana’s approved compensation rate was only 2.3 cedis ($1.22) per tree. In fact, the official compensation rate, approved by the Land Valuation Board in 2003, is 5.22 cedis per tree (about $2.78 – still not much for a crop that takes about five years just to start producing).

The Concerned Citizens of Sefwi note that the mine has been very profitable, producing 261,846 ounces of gold in 2011 for an operating profit of more than $200 million, while continuing to ignore the farmers’ demands. The farmers had gone to court in 2006 and settled out of court, but the company did not fulfil its commitments under that agreement, so the farmers went back to court in 2007. The case was still in court in 2009 when the then-Minister of Lands and Natural Resources, Alhaji Collins Dauda, intervened – as per his legal prerogative – and persuaded the farmers to set aside their court proceedings and again engage in negotiations to settle out of court.

As part of the negotiations, the Land Valuation Division (LVD) produced a report outlining recommended compensation for the affected farmers at the Minister’s request. On May 16, 2012, the Minister, directed the LVD to take necessary action to ensure payment of the recommended compensation to the affected farmers. The LVD reportedly did inform Chirano that it should pay all remaining compensation owed, but there have been no reports of any movement on the company’s part.

Kinross, in its 2011 Corporate Responsibility Report, maintains that the lower payments were legitimate:

[F]rom 2003 to 2005, Chirano Gold Mining Company provided fair monetary compensation to farmers operating in areas that would be needed for construction…Compensation payments were higher than standard crop evaluation methods, and were accepted by the affected farmers. Since that time, a group of farmers has challenged the level of compensation received. In early 2012, the Land Valuation Board presented its findings to the farmers and to the mine. The Chirano mine is committed to working with the parties involved to better understand the basis of the Board’s calculation and, in the interests of resolving the issue, will be providing a formal response to the Land Valuation Board’s recommendation.

While still refusing to pay the farmers, the company did manage to donate two motor-tricycles as prizes for the Sefwi Wiawso municipal Farmer’s Day celebration on November 1, 2012. According to local media, Ken Norris, General Manager of Chirano Gold Mines Limited, said the donation was “to demonstrate the company’s corporate social responsibility.”

 The farmers have requested that the government take stronger measures, such as withdrawing the company’s licence, and the Minister of Lands & Natural Resources, Mike Hammah, responded to the October 12 ultimatum by issuing one of his own: the Lands Valuation Board was to resolve the situation within two weeks. We have not been able to confirm from the farmers or local media that anything has been done.