Ghana suffers as Canadian company ceases funding

Behind the rusting security gate at a secluded mine entrance, two flagpoles stand side by side. One flies the black star of Ghana while the other, which once carried the Canadian Maple Leaf, now displays China’s red ensign.

Yet half a million Canadian foreign aid dollars, earmarked for communities affected by Canadian mines, were sent here for three years. It was part of an experiment in overseas aid, where the Canadian government partnered with a mining company to develop the local economy. The money went to teacher training, vocational classes and small agricultural projects.

But three years on, training has ceased, half-finished buildings sit shuttered and the development plan has stalled due to a lack of new funding.

The Canadian mine was sold in early 2010 before the project even started, and while its former owner, Rio Tinto Alcan, fulfilled its commitment to fund the three-year project, the Chinese management hasn’t contributed a cent.

“We’ve had some engagement with the new owners. They were quite interested in the project that we were doing,” said Abena Adubea Acheampong, Ghana country director at World University Service Canada (WUSC), the non-profit organization that implemented the project. “But they were very honest with us to tell us, ‘We are having some technical challenges, so we will not be able to fiscally contribute toward the project.’ ”

Without a mining company partner, the Canadian government has ceased its funding as well. Mines change hands often, and the Ghana sale underscores the risks of tying development projects to corporate interests that ride the tides of the metals market. While the private sector provides the promise of a vast new source of funding for international aid at a time when governments are cutting back, when economic conditions change, promises can be broken, projects abandoned and people living around the mines are left to fend for themselves.

Bauxite has been mined here for almost 75 years. The Ghana Bauxite Company was started by the British, before being partly nationalized in the 1970s, with a majority stake retained by Rio Tinto Alcan, an international aluminum corporation based in Montreal. But in 2010, Rio Tinto Alcan sold its stake to the Bosai Group, a Chinese mining conglomerate, saying the mine was too small for its massive international operation.

Four years after the sale, the mine continues to operate at a loss, said Benjamin Addo, head accountant at Ghana Bauxite Company, and this has severely restricted its ability help to the surrounding community.

“We’re still committed to corporate social responsibility (CSR), but not on a scale that we did before,” Addo said. “(Rio Tinto Alcan) is a huge international company and we cannot match what they were doing.”

Addo, who also worked under the previous owners, estimated that under Rio Tinto Alcan, the mine had an annual budget of $200,000-$300,000 (U.S.) for community development projects.

He wasn’t permitted to reveal what the Bosai Group is spending. All he would say is that “expectations are bigger than our current CSR budget.”

Even after a century of mining, Ghana remains underdeveloped, with poor roads, unreliable electricity and a weak education system.

“Over the entire history of the mine, it has not benefitted as it should,” Gyaim said.

“Rio Tinto did great things,” Gyaim said, describing the construction of schools and wells. “But now that they’re gone, we’re waiting to see the same effort.”