\Introduction

This chapter covers the background information of the case study, the statement of problem, reasons for the research, the aims or objectives of the study, the justification of the research, limitation and delimitation of the study and research methodology. The chapter also contains the definition of terms and the planning of the presentation.

Background of the study Ghana

The thesis is about small scale mining in Ghana. Ghana is a self-governing country which got her independence on 6th March 1957 after being colonized by the British. Ghana is located in West Africa along the Gulf of Guinea and was previously called Gold Coast because of the availability of gold in the country. It is also rich in other natural resources. The nation Ghana shares borders to the north with Burkina Faso, the east with the Republic of Togo and the west with La Cote D’Ivoire. The nation’s population is about twenty million and it covers an area of 238,555 square kilometers (Kaakpena, Y.2004).

According to Yelpaala K and Ali. S H,(2006),Ghana is a rich country as compared to other African countries due to the availability of natural resources like: gold, timber, diamond, bauxite, manganese, oil etc. These have contributed to the nation’s source of foreign exchange since Ghana produces these resources on a very large scale.

The timber industry accounted for 9.03%, cocoa 22.51% and the mining industry accounted for 38.96% in the year 2000 and all this money was generated from the foreign exchange earnings. The second largest producer of gold in Africa after South Africa is Ghana. There has been a tremendous increase in the mining industry for the past twenty years. The Mining industry has generated about four (4) billion US dollars to the nation as part of the foreign exchange earnings between 1983 and 1998. Small

scale mining has been in existence for the past 2000 years and has also contributed significantly the same as the large scale mining.

The mining industry in Ghana

For about four decades, up to the 1980’s no new mine was opened in Ghana due to a number of problems faced by the mining sector investors and potential investors alike, as a result of the economic, financial and institutional framework within which the mining sector operated. This led to the emergence of investors into the country from the year 1985 onwards. The government of Ghana then decided to bring in different laws and measures to regulate the mining activities. Before the implementation of these laws, gold mining activities were not regulated but diamond mining activities were being regulated by the mineral regulation since 1962. The laws were:

1) “The Additional Profile Tax Law (PNDCL122:1985),

2) The Mineral and Mining Laws (PNDCL 153:1986),

3) The Mineral (Royalties) Regulations (LI 1949, 1985 and 1987),

4) The Small Scale Mining Law (PNDCL 218:1989) and

5) The Precious Marketing Corporation Law (PNDCL 219:1989)” (Kaakpena, Y. 2004)

In order for these laws and policies to regulate the mining industry, the government established the Minerals Commission in 1986 to be in charge of the activities of mining industries in Ghana at both the local and international level. The government also formed an organization called Precious Minerals Marketing Corporation (PMMC) to be the sole buyer and seller of the minerals the small scale mining industries were producing. To add to this, different incentives were reserved for foreign investors with the idea of encouraging the foreign agencies to invest greatly in the mining sector.

For example, corporate income tax on the mineral production of private companies in Ghana decreased from 50-55% in 1975 to 45% in 1986 and 35% in 1994. Payment made to the government declined from 6% of the total number of minerals produced in 1975 to 3% in 1987(Kaakpena, Y. 2004).

There are two different forms of mining and these are large scale mining and small scale mining. Large scale mining is composed of a large number of people employed by a mining company. They have one or more large sites where they stay to mine for years (Furniss C, 2005).They normally use scientific and technological method in mining and their mining activities are mostly regulated and the impact on the environment are less. Example of a large scale mining company is the Ghana Consolidated Mining Company (GCD) which was solely responsible for diamond mining in Akwatia.

Communities in which mining is done in Ghana normally have high illiteracy rates, unemployment and poverty. This causes the inhabitants of such communities to engage in small scale mining activities which are legal in Ghana. However, their activities are not monitored by the relevant agencies leading to severe environmental degradation and pollution. Some also engage in illegal mining activities called “galamsey”1. Due to poverty, they are unable to purchase modern equipment to carry out their mining activities, hence they engage in acts which results in environmental pollution and sometimes loss of lives (Kaakpena, Y. 2004).

Small scale mining also involves small groups of people in a locality. They do not have their own gold sites but move from one place to another in search of mineral sites thinking they are rich in minerals. This type of mining is widely known to have a lot of negative impact on the environment. This type of mining is what had been going on in Akwatia for years and my thesis is focus on this type of mining activity. (Furniss, C. 2005).

Mining has negative impact on the environment and on the well-being of people especially, during its operation. Mining causes direct environmental impact because the vegetation and trees are destroyed which becomes destructive to the environment (Ricardo, and Hersilia, F. 2004). Mining activities are done within a short time but has long lasting consequences. Environmental degradation is caused when mining is carried out in the “forest zones”. It is also believed that mining affects approximately 38% of the earth forest (Ricardo, and Hersilia, F. 2004)