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Do you know of a foreign-owned mining company that has imposed a moratorium on real estate development in a local community in Ghana for eight continuous years despite the idea that mines are catalysts for development in our communities? Get to know Golden Star Resources, GSR.
Readers may recall the egregious issues surrounding the sale of the Bogoso-Prestea mine by Golden Star Resources (GSR) to a recently formed unlisted mining company Future Global Resources (FGR) on 30.th September 2020 in which the Golden Star Resources agreement focused on waiving its rehabilitation liabilities of about $ 53 million to demonstrate to the global market that it cleans its balance sheet and has a positive cash flow.
However, GSR chose to deceive the communities in which it operates by departing without due consultation and without fulfilling the promises made to the communities.
This has agitated the community against the new owner of the mine and is creating tension within the community to the detriment of the employees and the new owners of the mine, a situation that could ground the mine.
It will be recalled in the local media that some communities in the watershed demonstrated against GSR on October 22, 2020 demanding that GSR fulfill its promises before leaving the community.
On a fact-finding mission to the mine site and communities, observations were that GSR had demonstrated unethical business practices and had left the mining community misleading both community leadership, bosses and the workforce in others to maximize their profits from the sale of the mine. .
The concrete facts;
Leave the community without ceremony
The communities in which GSR – Mina Bogoso-Prestea operated woke up on the morning of 27th July 2020 to hear on the radio the announcement of a binding agreement for the sale of the Bogoso Prestea mine without any prior consultation / communication even with the community leadership.
While looking for answers to questions they don’t understand about the sale, GSR at 30th September 2020 announced that the binding sale agreement had been concluded and that the mine was sold.
Further investigation by community leaders indicated that the mine had been sold to a new, unlisted and difficult-to-track company, which became a situation of concern for the community.
The communities prior to the sale had agreements with the company that included: Corporate Social Responsibility Agreement, Relationship Agreement and Sustainable Livelihoods and Local Employment Agreement.
While community leadership demanded that GSR management show respect and at least visit the mining community to receive courtesies and address outstanding issues, GSR leadership in less than a month after the sale described the mining community as hostile and would only meet with community leaders outside of the communities in which they had made their fortune in the past year.
This lack of respect for community leadership was part of the underlying factors that triggered the demonstration of the communities against the Mine and its new owner just a month when the new owners took over.
GSR aimed for a clean balance sheet without considering the consequences for the buyer (FGR) and the communities in which it operated. Our investigation indicates that the mine with the largest concession in Ghana was purchased by the online buyer without the buyer (FGR) visiting the mine site at least once to do due diligence and ask the tough questions to ensure the continuity of the mine. after the acquisition.
Such an offer and acceptance agreement is unlikely to be the case for mining giants like Goldfields, Newmont and the like. The issues surrounding the sale tend to amplify speculation that the sale was a secret deal between friends and intended to divest the Bogoso mine and continue operating profits from the sister mine (Wassa mine) in Ghana: a business approach. which is unethical.
The investigation could not determine whether the sale offer was made to other mining giants (Newmont, Anglogold Ashanti, Goldfield, Barrick).
One fact that indicated that this transaction was to divest the mine was the fact that the sale agreement did not commit the buyer to make any payments to GSR in the immediate terms of acquiring the mine, but rather postponed all payments to future dates depending on some milestones that when not achieved, the buyer could resign through liquidation, reversing the mine, employee obligations and other rehabilitation obligations of about $ 53 million with the Government of Ghana.
It is heartbreaking how such a diabolical and dubious game plan could be executed by a mining company led by its CEO, Mr. Andrew Wray (investment banker turned miner) when the Ghanaian government had entrusted the country’s gold resource to the company hoping to get it. Ghana and investors a win-win scenario to benefit and develop Ghana’s local communities.
Golden Star Resources does not respect or practice its own published values
GSR has communicated its values to the world such as Caring, Collaboration, Justice, Honesty and Respect, and claims to be a sustainable and diversified gold mining business that stakeholders will be proud to be associated with. Our factual results indicate that this is a hoax to the public;
Taking care of – GSR disposed of the Bogoso-Prestea mine without regard for the survival of the mine, denied the workforce their rights and left unfulfilled promises to their catchment communities creating tension at the mine and within the communities they once operated . This act does not demonstrate this value.
Honesty – One of the behaviors that have been idenfied to be associated with the value of Honesty is respect for agreements. However, looking at their actions and inactions regarding employee contracts and community agreements, it is very clear that this is also a ruse.
The Lamancha investment group, after acquiring the majority of the shares and controlling GSR, has not been honest with the workforce and the community and has broken all initial promises.
Their deception in renovating the Bogoso-Prestea mine was to gain entry to the already profitable Wassa mine.
All events indicate that there was a premeditated intention to dispose of the Bogoso – Prestea mine and obtain operating profit from the Wassa mine. GSR with its investment group Lamancha executed this plan to perfection by selling the Bogoso-Preatea mine at almost zero cost after 18 months of acquisition, the mine that they promised to grow and diversify, and obtain profits from the one that was already generating profits. during your participation. acquisitions.
An act of dishonesty. If FGR (Buyer) is an independent company and not an accomplice, then GSR has misled the company into creating an already tense environment for its first operation as a new mining company.
Justice – Has GSR been fair to the community and employees? –GSR violated a documented agreement with the communities that includes the commitments of the three agreements signed in the Superior Court between GSR and the communities. GSR also violated the agreement they had with their own employees, resulting in the employees taking GSR to court.
Respect – It is obvious that GSR does not respect agreements and people. GSR was welcomed into a community that would do everything possible to ensure the progress of the mine in a diversified way. GSR sold the mine without notice and leaving discussions with community leaders and employees. GSR leaders did not even go to the catchment communities to exchange parting courtesies and refused to go to the mining site to exchange parting courtesies between employers and employees.
Sustainable and diversified gold mining company – Upon the arrival of the Lamancha investment group in the third quarter of 2018, several promises were made to diversify the mine to include the expansion of an existing underground mine, the resettlement of the Dumasi Community and the extraction of refractory mineral to increase life useful mine. and continue with the campaign for additional deposits of oxides.
This, which we now know for sure, was a ploy to access the already profitable WassaMine, as none of the promises made during Lamancha’s acquisition of shares for the Bogoso-Prestea mine have been fulfilled.
‘Breaking the camel’s back’: GSR’s attempt to rob the community of its oil palm plantation
It is pathetic how a commercial entity that is expected to help develop rural communities tries to deceive and rob communities of their already earned livelihoods.
In 2018, when the Lamancha investment group acquired majority shares in the Bogoso-Prestea mine, GSR had a local community livelihood program called Golden Star Oil Palm Plantation (GSOPP), registered, owned and operated by the Chief within communities and employing more than 1000 workers. in the Bogoso-Prestea plantations.
GSOPP funding was through a $ 1 per ounce agreement between the mine and the community and this is received by the trustees of the communities.
These chefs have donated their farmland, used the proceeds of $ 1 per ounce to develop an oil palm plantation that will serve as a livelihood for their communities should the mine no longer exist, for which GSR has even taken advantage of and credit to mark. the initiative as Corporate Social Responsibility in all publications, including the recent report for the third quarter of 2020.
Unfortunately, during the sale of the Bogoso-Prestea mine, GSR indicated that this livelihood initiative would not be part of the sale and that although the buyer (FGR) will pay the $ 1 per ounce, GSR will continue to control the plantation and report on the same as its Corporate Social Responsibility. This agreement was curiously accepted by the buyer (FGR).
One would expect that a new mine owner trying to develop the community would be in a hurry to take such an initiative. The irony then is whether the GSOPP project belongs to GSR. In addition to the latter, it is again ironic for a mine to operate in one concession and claim ownership of a CSR project in another concession owned by a different mine.
This can only happen if buyer and seller are allies with the goal of maximizing profit through deception and marginalization of legitimate stakeholders. The investigation has observed that this act of deception by GSR has been recognized by the Chief in the communities that are fighting it and this has generated tension between GSR and the Communities with a spill for FGR (the buyer).
Should the government sit indifferent?
Although they were not involved in the fact-finding mission, the PreteaHuni-Valley Municipality MCE and MP may not have been consulted about GSR’s departure, as was the case with employees and local community leadership.
However, all these post-sale events within the community and mine site have been under the supervision of these government representatives (Dr. Isaac Dasmani and Hon. Mrs. Barbara Oteng Gyasi). Dr. Dasmani, the MCE, however, made an intervention during the Oct. 22 community and workforce rally where he seemed to defuse the situation. No progress has been observed after his intervention. With pressures still latent, the situation remains volatile.
The government of the day and its representatives in the municipality must be proactive and give this problem the necessary attention before it escalates further, an important result of which will be the loss of the mine, which is the main economic lifeblood of Prestea-Huni. Municipality of the Valley.
The author, Isaac Essien, is a youth leader in the municipality of Prestea Bogoso.
