MCLC: Ghana's crackdown on Chinese gold miners

[Denton, Kirk]

MCLC LIST
From: kirk (denton.2 at osu.edu)
Subject: Ghana's crackdown on Chinese gold miners
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Source: NYT (6/29/13):
http://www.nytimes.com/2013/06/30/world/asia/ghanas-crackdown-on-chinese-go
ld-miners-hits-one-rural-area-hard.html

Ghana’s Crackdown on Chinese Gold Miners Hits One Rural Area Hard
By DAN LEVIN

MINGLIANG, China — To the people of Shanglin County, gold is a curse.

For nearly a decade, thousands of peasants from this rural speck in
southern China’s Guangxi Autonomous Region borrowed heavily before
boarding flights for Ghana, Africa’s second-largest gold producer, with
glinting ambitions and no backup plan.

The Chinese found their gold, though trouble soon found them, in the form
of crooked police officers and armed bandits who prowled the mining camps.
Then, this month, the Ghanaian authorities declared the mines illegal and
arrested more than 200 Chinese miners, accusing them of polluting the land
and abusing local workers.

Countless others fled as local residents armed with guns and machetes
attacked the camps, robbing miners of their possessions and killing some
who fought back.

After the crackdown, images of violent deaths and vandalized mining camps
blazed across Chinese social media, fueling national anger and soul
searching. But here in Shanglin, a mountainous county of 470,000 in one of
China’s poorest regions, it is despair over financial ruin that is most
pronounced.

“My son might be killed in Ghana, but if he comes back he’s dead anyway,”
said Shen Aiquan, 65, whose family borrowed 3 million renminbi, or
$489,000, to build a mining operation, though from whom exactly she did
not know. All she could do was wait for her son, and the debt collectors
who would surely follow.

The crisis in Ghana has revealed the perils of a high-stakes economic
gamble, in which countless people have taken part in overseas investment
projects endorsed by the Chinese government but have been left to fend for
themselves when things go wrong.

Some of the problems facing residents here stem from the informal lending
practices common among the rural poor. Lacking the hard assets banks
usually require, many people leverage “guanxi” — the social collateral
binding business and personal relationships in China — to secure loans
from relatives and friends.

Based on trust and often little else, guanxi financing has devastated the
villages and townships of Shanglin, whose residents are now bound not just
by blood and sweat but by bankruptcy as well.

And the trust is sometimes misplaced. Early this month, a Chinese man in
Ghana disappeared with millions of dollars that miners had given him to
wire home. Ms. Shen’s son was one of the victims. Another was one of her
neighbors, Yang Baofa, 52, who returned from Ghana two weeks ago with
barely enough money to travel to his village. “We trusted him because he
was Chinese,” he said of the missing man.

On the day Mr. Yang arrived, several of the men who had accompanied him
back to China were stuck in the southern city of Guangzhou working
construction jobs to earn the $40 needed to buy a long-distance bus ticket
home.

The miners who have been trickling back to Shanglin since the violence
began insist that they broke no Ghanaian laws. Taking a break from playing
basketball across from his concrete house, Wu Jian, 34, a former mine
owner, said he had made sure to get all the necessary paperwork in Ghana,
including land deeds and a mining license. “The local people said as long
as we had money we could do anything we want,” he said.

Last month, he fled, leaving behind an operation that he said was worth
about $326,000. The money, he said glumly, was borrowed from friends,
relatives and loan sharks.

“I went there because that’s what everyone else did,” he said. Despite his
debts, he had no regrets about leaving Ghana. “Coming back wasn’t the
right decision; it was the only option.”

Shanglin’s connection to the African gold mining project is widespread.
“Everyone has a relative or friend in Ghana,” said Lan Xiongwen, 45, as he
slurped some fish stew at a restaurant in the county seat.

When relatives took his son to the Ghanaian mines two years ago, Mr. Lan’s
family invested $489,000 in excavating machines, paid for by plundering
savings and getting bank loans. Back then it seemed like a smart move.
With 980 tons of gold being exported to Shanglin annually, he said,
residents figured it would be only a matter of time before they realized
their dream: after paying off the loans, they would build a house and buy
a car.

But everything the Lan family earned went into paying for the machines,
which now sit rusting in Ghana. “We didn’t make one cent,” Mr. Lan said.
Even as he fretted over his son’s safety, he envisioned a future of
endless toil. “A lifetime isn’t long enough to pay off our debts.”

Residents like Mr. Lan say they feel betrayed by the Chinese government,
which they say has shirked its responsibility after years of encouraging
the Ghanaian gold rush. In April, despite the growing problems in Ghana,
the local government here continued to ship mining equipment and hand out
passports, he said.

When the crackdown came, many Shanglin villagers gathered in front of the
local government headquarters to beg for help. The county sent an official
delegation to Ghana, but few expect their fortunes to be salvaged.

The raids and violence threaten to mar a relationship China has long
considered a crown jewel in its African strategy. It hinges on importing
the raw materials needed to fuel China’s economic growth in exchange for
the sale of Chinese goods and the Chinese government’s financial support
for critical infrastructure projects. According to the Chinese government,
bilateral trade between China and Ghana hit $5.43 billion last year, an
increase of 56 percent from 2011.

Even as Chinese diplomats have worked to bring the miners home, the
Chinese government has been eager to move past the episode, which it
feared could be bad for business. “This issue of illegal mining is a
disharmony in bilateral relations, but we should always have the bigger
picture in mind,” Qiu Xuejun, an official in China’s Ministry of Foreign
Affairs, said during a recent news conference in Accra, Ghana’s capital.

People here, however, cannot afford to just move on. Along the dusty main
drag of Mingliang village, the workshops that clanged with workers
assembling mining machines were silent, their heavy red doors locked with
chains. In a nearby factory, chickens roosted among steel pipes once used
to make water pumps for the mines. “Now it’s all just scrap metal,” the
factory boss said.

Pulling out his smartphone, he scrolled through a series of photographs
from Ghana sent via Weixin, a popular social media app. The images showed
brutalized Chinese miners, one covered in purple welts from a beating,
another dead from a gunshot to the face and two more connected to IV bags
hanging from trees.

The factory owner refused to be identified, saying officials had warned
him not to speak to reporters.

With no hope for reopening, he said he planned to go back to pig farming,
like many of his neighbors. “There’s nothing else to do,” he said.

Mia Li contributed research.