Who Buys Galamsey Gold? Oppong Nkrumah Challenges Ghana’s Gold Board Amid Ongoing Illegal Mining

Despite persistent government crackdowns, illegal gold mining (galamsey) remains a severe environmental and economic challenge in Ghana. A piercing question from a prominent lawmaker has reignited debate: if the state-controlled Ghana Gold Board (GoldBod) denies buying from illegal miners, who is purchasing the millions of dollars in gold produced by galamsey operations? This article provides a clear, evidence-based examination of the issue, exploring the legal framework, market realities, and the implications for Ghana’s economy and environment.

Introduction: The Central Paradox

Ghana’s battle against illegal mining, commonly known as galamsey, has been a dominant theme in national discourse for years, marked by periodic government task forces, public outcry over devastated landscapes, and pledges of a decisive victory. Yet, the practice continues. In this context, Hon. Kojo Oppong Nkrumah, Member of Parliament for Ofoase-Ayirebi, has articulated a fundamental paradox: while the government asserts tight control over gold exports through the Ghana Gold Board, the illicit gold trade appears to thrive. His direct challenge to the Mahama administration—”If GoldBod is not buying galamsey gold, then who is buying it?”—cuts to the heart of the supply chain. It forces a confrontation with the uncomfortable possibility that sophisticated networks are circumventing official channels, potentially undermining national revenue, environmental laws, and the formalization of the small-scale mining sector.

Key Points: Unpacking the Inquiry

• The Legal Monopoly: Ghana’s Gold Trading Act, 2022 (Act 1140) designates the Ghana Gold Board (GoldBod) as the sole entity with exclusive authority to export gold from Ghana, aiming to centralize control and increase state revenue.
• GoldBod’s Stance: The Board, chaired by Mr. Sammy Gyamfi, publicly and formally denies purchasing gold directly from illegal miners (galamseyers). It states all gold is sourced through licensed aggregators and intermediaries who must comply with legal and environmental standards.
• The MP’s Contradiction: Oppong Nkrumah argues that despite GoldBod’s denials and government claims of controlling exports, the ongoing high volume of galamsey production and signals like the appreciation of the Ghanaian cedi suggest significant illicit gold is entering the market, likely via smuggling.
• The Production Puzzle: Official data shows marginal growth in large-scale mining output but a reported significant spike in artisanal and small-scale mining (ASM) production, even as security operations against galamsey intensify.
• The Unanswered Question: The core issue remains: if not the state’s gold board, which entities—domestic or international—are acting as the primary buyers for this illicit supply, and how are they evading the legal framework?

Background: Ghana’s Gold Sector and the Galamsey Phenomenon

Ghana’s Golden Importance

Ghana is Africa’s largest gold producer and a major player globally. Gold is the country’s primary export commodity, consistently contributing over 40% of total export earnings and a significant portion of government revenue through taxes, royalties, and dividends. The sector is divided into large-scale mining (LSM), dominated by multinational corporations, and artisanal and small-scale mining (ASM), which legally employs millions of Ghanaians but is plagued by illegal operations.

The Rise and Resilience of Galamsey

Galamsey, a portmanteau of “gather” and “sell,” refers to informal, often illegal mining conducted without proper permits, environmental safeguards, or tax compliance. Its proliferation is driven by poverty, unemployment, weak regulatory enforcement, corruption, and the lure of quick wealth. The environmental damage—deforestation, river pollution with mercury and cyanide, and land degradation—is catastrophic and long-lasting. Successive governments have launched operations like “Operation Vanguard” to combat it, but systemic challenges and the high profitability of the illicit trade have ensured its persistence.

Legislative Shift: The Gold Trading Act, 2022 (Act 1140)

To consolidate control and maximize revenue from gold, Parliament passed Act 1140 in 2022. This law:

• Establishes the Ghana Gold Board (GoldBod) as a corporate entity.
• Grants GoldBod the exclusive right to purchase and export gold from Ghana, effectively centralizing the country’s gold sales.
• Mandates that all miners, including licensed ASM operators, must sell their gold through GoldBod or its authorized channels.
• Aims to formalize the ASM sector, ensure responsible sourcing, promote traceability, and comply with international standards like the OECD Due Diligence Guidance for responsible mineral supply chains.

The law was hailed as a game-changer for transparency and state coffers. However, its implementation has been immediately contested by the central question: what happens to gold from miners operating entirely outside the legal framework?

Analysis: Deconstructing the Supply Chain and the Evidence

To understand the query, one must map the potential pathways for galamsey gold. GoldBod’s model relies on licensed aggregators who buy from legally registered small-scale miners. This chain is broken at the source when gold is mined illegally. The MP’s question implies two possibilities: either GoldBod’s sourcing channels are compromised (i.e., licensed aggregators are secretly mixing illicit gold), or a parallel, illegal export chain exists entirely outside GoldBod’s purview.

GoldBod’s Defense: The Legal and Regulatory Framework

GoldBod’s official FAQ, as cited, is unequivocal: it does not buy directly from miners, legal or illegal. Its mandate under Sections 3(1)(f) and (g) of Act 1140 is to “promote the formalisation of small-scale mining” and “develop environmentally responsible mining practices.” The Board argues its responsibility is to build a clean, formal supply chain, not to purchase from actors violating the very laws it is tasked to uphold. It positions itself as a regulator and facilitator for the formal sector, not a buyer for the informal one.

The Alleged Market Signals: Cedi Appreciation and Production Data

Oppong Nkrumah’s argument rests on observable economic trends:

1. Foreign Exchange Market: He points to periods of Ghanaian cedi (GHS) appreciation against major currencies like the US Dollar. While complex, a significant source of foreign currency inflow is gold exports. If official LSM exports are stable or only marginally up, a surge in foreign currency could indicate unrecorded (smuggled) gold sales generating offshore USD, which eventually enters the local market.
2. Production Discrepancy: He highlights a reported spike in ASM gold output statistics. If government anti-galamsey operations are intense, a simultaneous increase in ASM production is logically contradictory unless a large portion of that production is illegal and unrecorded by official channels, yet still reaching the market.

These are circumstantial indicators, not proof, but they form a coherent pattern suggesting a significant volume of gold is exiting the country through means not captured by GoldBod’s official export figures.

Potential Illicit Export Channels

Based on global patterns of mineral smuggling and past Ghanaian investigations, the likely buyers and routes include:

• Smuggling Networks: Gold is physically transported across porous borders to neighboring countries like Togo, Burkina Faso, and Côte d’Ivoire, which have less stringent gold export controls. From there, it enters international markets, often blended with legally sourced gold.
• Complicit Licensed Aggregators: Some entities holding licenses to sell to GoldBod may deliberately or negligently purchase gold from illegal sources, effectively laundering it into the official stream. This is a major enforcement challenge.
• Direct Foreign Buyers: International traders and refineries, sometimes knowingly, may source gold from informal middlemen operating in Ghana, bypassing the state monopoly entirely. The high profitability attracts such risk-taking.
• Informal Local Markets: A portion may be sold within Ghana for jewelry, local savings, or to informal local buyers, but the bulk of high-value production is believed to target export for maximum profit.

The Enforcement Gap

The persistence of galamsey and the suspected smuggling point to a critical enforcement gap. This includes:

• Insufficient monitoring of remote mining areas and border posts.
• Potential corruption within security agencies and regulatory bodies.
• Limited capacity for GoldBod to trace the ultimate origin of gold presented to its licensed aggregators.
• The sheer economic incentive, which can outweigh the perceived risk of detection for both miners and buyers.

Practical Advice: Addressing the Crisis for Different Stakeholders

For the Government and GoldBod

• Enhance Traceability: Implement a robust, tamper-resistant traceability system (e.g., blockchain-based) from the mine site to export, with unique identifiers for legally mined gold.
• Intensify Border and Port Surveillance: Deploy technology (scanners, drones) and increase intelligence-led operations at key smuggling routes and exit points.
• Audit Licensed Aggregators Rigorously: Conduct frequent, unannounced audits of all entities in the GoldBod supply chain. Implement severe penalties, including license revocation and prosecution, for sourcing from illegal operations.
• Formalize and Support ASM: Accelerate the provision of legal mining licenses, accessible mining equipment, and geological data to small-scale miners. Create viable, transparent cooperatives that can sell directly to GoldBod, reducing the incentive for illegal activity.
• Publish Transparent Data: Regularly publish detailed data on gold purchases by source (LSM vs. licensed ASM), export volumes, and values. Transparency makes discrepancies harder to hide.

For Civil Society and the Media

• Investigative Journalism: Conduct in-depth, evidence-based investigations into the supply chain, following the money and the gold from known galamsey sites to potential buyers.
• Community Monitoring: Support community watchdog groups in mining areas to document illegal operations and suspected buyer activities.
• Advocacy for Reform: Advocate for the strengthening of the Minerals Commission and other regulatory agencies, insulating them from political and corruptive influences.

For International Partners and Refineries

• Due Diligence: International gold refiners and buyers must implement stringent, Ghana-specific due diligence, as required by the OECD Guidance, to verify gold is not financing conflict or illegal activities. They should be wary of gold from Ghana that does not have verifiable documentation from GoldBod or licensed aggregators.
• Technical Assistance: Provide support for Ghana’s traceability systems and capacity building for law enforcement to combat transnational smuggling networks.

FAQ: Frequently Asked Questions About Galamsey Gold

1. What is “galamsey”?

Galamsey is the local Ghanaian term for illegal or informal gold mining, typically conducted without government permits, environmental safeguards, or tax payments. It causes severe environmental damage.

2. What is the Ghana Gold Board (GoldBod)?

GoldBod is a state-owned corporation established under the Gold Trading Act, 2022 (Act 1140). It holds the exclusive legal authority to purchase and export gold from Ghana, aiming to centralize control, increase state revenue, and formalize the gold trade.

3. Does GoldBod buy gold from illegal miners?

GoldBod officially and categorically denies this. The Board states it only purchases gold from licensed aggregators and intermediaries who are required to source from legally registered small-scale miners, in compliance with Act 1140.

4. If GoldBod isn’t buying it, who is?

This is the central, unanswered question. Evidence suggests buyers include: 1) Smuggling networks exporting via land borders to neighboring countries; 2) Complicit licensed aggregators who launder illicit gold into the official stream; and 3) International traders who source gold outside official Ghanaian channels. No single entity has been publicly and conclusively identified as the primary buyer.

5. Why is this question important?

Identifying the buyers is crucial to stop the economic incentive driving galamsey. It exposes weaknesses in enforcement, potential corruption, and the scale of lost government revenue (taxes, royalties). It is also key to ensuring Ghana’s gold exports are “conflict-free” and ethically sourced, maintaining access to international markets.

6. What are the legal penalties for buying or exporting galamsey gold?</h