Bloomberg News

China’s Role in Africa Under New Scrutiny as Ghana Expels Miners

June 07, 2013

Nigerian Central Bank Governor Lamido Sanusi

While African nations welcome the investment and job creation that Chinese investment brings, leaders from Botswana’s Ian Khama to Nigerian central bank chief Lamido Sanusi, seen here, have questioned whether the relationship has benefited Africa as much as it has China. Photographer: Jason Alden/Bloomberg

Dozens of Chinese nationals face expulsion from Ghana for illegal gold mining and prostitution in a case that’s drawn new focus on China’s rush to tap African resources and ramp up investment on the continent.

Ghana will expel 166 Chinese citizens who were detained over the last week in the country’s gold-producing regions, Francis Palmdeti, head of public affairs for Ghana’s Immigration Service, said in a phone interview yesterday. Many lacked resident permits, he said.

The arrests highlight how thousands of ordinary Chinese have traveled to Africa in search of opportunity as China’s state companies tap the continent’s natural resources to power the world’s second-biggest economy. That’s strained ties as African leaders voice new caution over investment from China, the continent’s biggest trading partner since 2009.

“If you have gold, then Chinese want to go there to mine it -- it’s like the American gold rush,” He Wenping, director of the African Research Section at the Chinese Academy of Social Sciences, said by phone from Beijing. “Many times they are not clear about Ghana’s laws since there are middlemen who bring them over and help them sign a contract.”

Trade between Africa and China doubled since 2007 to more than $200 billion and Chinese investment stands at $20 billion, according to Standard Bank Group Ltd., Africa’s biggest lender.

While African nations welcome the investment and job creation that Chinese investment brings, leaders from Botswana’s Ian Khama to Nigerian central bank chief Lamido Sanusi have questioned whether the relationship has benefited Africa as much as it has China.

Wake Up

Africa needs to “wake up” to the realities of the relationship, Sanusi wrote in the Financial Times in March. The Chinese sell manufactured goods to Africa and buy resources, which was the essence of colonialism, he wrote.

In February, Zambia revoked the mining license for a coal mine after workers rioted there in November and killed a Chinese manager. The mine, owned by a family of Chinese citizens, failed to comply with at least 15 legal provisions, the country’s Mines Minister Yamfwa Mukanga said.

China is also facing competition in Africa from other nations. Japanese Prime Minister Shinzo Abe pledged 3.2 trillion yen ($33 billion) in public and private support to Africa during a conference in Tokyo on June 1-3.

The Chinese county of Shanglin issued a warning yesterday against gold mining in Ghana and said it will help the miners return home by paying for their plane tickets, Xinhua News Agency reported. About 12,000 people from Shanglin county have engaged in gold mining in Ghana, Africa’s second-largest gold producer, since 2006, according to Xinhua.

Illegal Mining

“After Ghana’s government began to manage illegal gold-mining, China’s embassy in Ghana has several times requested law-enforcement authorities enforce laws in a civilized manner and stop certain individuals from robbing Chinese personnel,” Foreign Ministry spokesman Hong Lei said at a briefing today.

China is investing heavily in the country’s resource sector since oil reserves were discovered offshore in 2007. In August 2011, Ghana approved a $3 billion loan, the biggest in the country’s history, from the China Development Bank for projects including a natural-gas plant.

The influx of illegal Chinese miners has angered Ghanaian farming communities who say their land and sources of drinking water are threatened by their activities. The Chinese use high-end industrial machinery including excavators to dig while Ghanaian small-scale miners mostly use shovels and pickaxes.

The Chinese are welcome as long as they “come through the regulatory framework,” Isaac Kojo Abraham, a senior public relations officer at Ghana’s Minerals Commission, said by phone. “If they come to do illegal mining, the nation loses the fees and taxes they would have paid for their activities.”

To contact Bloomberg News staff for this story: Henry Sanderson in Beijing at hsanderson@bloomberg.net; Moses Mozart Dzawu in Accra at mdzawu@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net; Rosalind Mathieson at rmathieson3@bloomberg.net


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