Ebola, insurgents and riots: The perils of West African mining

Head of corporate affairs killed during riot
By Ed Stoddard
|hrreporter.com|Last Updated: 02/11/2016

CAPE TOWN (Reuters) — From Ebola to Islamist insurgents to social unrest triggered by the global commodity downturn, mining firms operating in West Africa face mounting security challenges, analysts and executives say.

Safety is on all radar screens in the region after an Islamist attack on a restaurant and hotel left 30 people dead in January in Ouagadougou, capital of gold-producing Burkina Faso.

Last week, AngloGold Ashanti's head of corporate affairs in Ghana was killed during a riot involving illegal miners at its Obuasi mine, which is idle as the company waits for a partner for the operation.

"Illegal mining and these kinds of things are regarded as a threat to national security by governments," AngloGold chiefexecutive Srinivasan Venkatakrishnan, known as Venkat, told Reuters at an industry conference in Cape Town.

Obuasi has been a source of smouldering social tension as lay-offs deprive households of breadwinners in a region where each miner typically has around 10 dependants.

"As mining companies lay off employees to protect their balance sheets as a response to the global commodity downturn, there is an increased risk of labour unrest and protests at mine sites as local employees fight to protect their jobs," said Mark Sorbara, an analyst with Africa Risk Consulting.

More broadly, he said, "mining companies in Africa, and West Africa in particular, face a constantly changing risk environment. Security in the West African mining sector is no longer simply the physical security of the asset."

Industry executives say precautions can be taken, with some rooted in the response to the Ebola pandemic that struck the West African nations of Liberia, Sierra Leone and Guinea.

They include the use of safe houses for staff instead of hotels.

Failure by state authorities to provide basic security is a worry. AngloGold said the violence at Obuasi "followed the withdrawal of government military protection from the mine".

THINGS THAT GO BANG

AngloGold's Venkat said one major concern, brought to the industry's attention by governments in the region, was the theft of explosives used for blasting at mines.

Joseph Keenan, managing director of mine explosives manufacturer BME, a unit of Johannesburg-listed chemicals group Omnia, said the emulsions it produces in West Africa have electronic detonators that require codes.

"So if they get stolen, they still cannot be set off," he told Reuters.

Industry sources say the transport of detonators to mining operations in West Africa always involves police or military escorts. Where explosives are produced, military guards are usually provided.

Not all miners believe the region's insurgencies are a threat to their projects.

Mark Bristow, chief executive of Randgold Resources, which has mines in Ivory Coast and Mali, said: "The security providers are raising the issue for obvious reasons.

"We have always been clear: we'll invest in a country where the government ensures there is a secure environment in which to operate and we feel there is no reason to believe that risk has gone up or down," he told Reuters.

Two weeks ago Bristow made his quarterly motorcycle trip from Randgold's Tongon mine in northern Ivory Coast to its Morila mine in Mali - on a route that underlines his confidence that the region's reputation for danger is exaggerated.

"I took the back roads, not the main roads, because it is really boring to go on the main roads," he said.

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