How problematic are artisanals for Gold Fields?

Gold Fields (GFIJ-J) says a report by Reuters claiming it had to put the brakes on underground mining plans after artisanals “invaded” ore bodies at its Damang project in Ghana is riddled with errors.

And while Reuters took the “invaded” description from Gold Fields’ head of corporate affairs and social development Tony Aubynn, another Gold Fields employee, Willie Jacobsz, who is head of investor relations for Gold Fields, disagrees.

“The site has not been invaded,” Jacobsz says. “Artisanals have been mining at the Rex deposit without authorization for about three years intermittently…we’ve gotten them to move away and then they come back it’s been an ebbing and flowing over the last few years.”

Jacobsz also counters multiple media reports quoting two different manager’s from Gold Fields’ subsidiary in charge of Damang — Abosso Goldfields saying artisanal activity resulted in the suspension of a proposed underground mine.

Jacobsz says artisanals are limited to the Rex deposit and that the deposit is a possible open pit and doesn’t even fit into the company’s plans for the next three to four years.

Further, Jacobsz says, only an early stage investigation into the possibility of underground mining at an entirely different deposit has been initiated.

And while Reuter’s also quotes Aubynn as saying artisanals are becoming better equipped, more organized and hence a greater impediment to mining, Jacobsz says not so.

“There is no evidence to suggest they are becoming better equipped,” he says. “The ongoing problem is the fact that they are so badly equipped. They are often using mercury and releasing it into the environment and their safety record is absolutely problematic.”

Jacobsz concedes that more artisanals have arrived recently at the site but is confident the company’s ongoing relations with the government, community groups and artisanals themselves will resolve the matter.

“We recognize that artisanal mining is part of the culture and heritage of many communities in West Africa,” he says. “So there is no sense in getting a blanket ban on it. Rather you have to try to channel it in the right direction”

Gold Fields has a 71.1% stake in Abosso Goldfields while Toronto-based Iamgold (IMG-T) has 18.9% with Ghanaian state taking up the remaining 10%.