US embassy cable - 04ACCRA1790

UNCLAS ACCRA 001790 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR EB/ESC/IEC/ENR -- JIM STEELE 
PLEASE PASS TO TREASURY -- ALEX SEVERENS 
PLEASE PASS TO COMMERCE -- RASHIDA PETERSEN 
 
E.O. 12958: N/A 
TAGS: EINV, EMIN, GA 
SUBJECT: GROUNDBREAKING SHOWCASES NEWMONT MINING'S ATTEMPT 
TO SOFTEN IMAGE 
 
1. (SBU) On August 25 DCM and EconOff attended groundbreaking 
ceremonies hosted by Newmont Mining for the first of two 
planned mines in Ghana.  When completed, the 450 
million-dollar project in the Brong-Ahafo region will 
represent the largest foreign investment in Ghana to date. 
Newmont clearly intends to use the project to showcase what 
they claim is a new approach to the business of mining.  It 
will also mean the relocation of over 500 people, although 
local communities seem to be committed to the project. 
 
2.  (SBU) The ceremony was well attended by chiefs and 
community leader from all the villages affected by the 
project.  The atmosphere was decidedly positive.  Newmont CEO 
Wayne Murdy was cheered openly by leaders of youth groups 
from the villages being relocating in the project.  One year 
ago these same young people staged protests and vandalized 
equipment at the site.  Rather than react aggressively, Murdy 
created an open forum, allowing the groups to express their 
concerns about the project on an on-going basis.  Newmont 
also used these discussions to present their plans directly 
to the community, calming fears of closed-door secret deals 
with tribal leaders and politicians.  In another new effort, 
adult community leaders act as consultants in the relocation 
process. According to Newmont's resettlement director, this 
has fostered a daily, constructive dialogue between Newmont 
and the affected communities. 
 
3.  (SBU) Despite all the good will, Newmont staff are not 
saying what percentage of the USD 50 million already spent 
has gone towards resettlement projects and worker 
training-programs.  At a lunch hosted by Newmont executives 
after the ceremony there was some grumbling from local 
leaders about negotiated crop settlements that have yet to be 
paid and delays in construction of the resettlement 
communities.  Perhaps more worrisome from Newmont's 
perspective is the growing protest from environmental groups 
directed at their next project in Ghana, which will be 
partially built on a national forest preserve in the Ashanti 
region.  If completed, the Ahafo and Ashanti projects 
together will represent a total investment in excess of USD 1 
billion for Newmont and 12.6 million ounces of their 
worldwide gold reserves.  It is clear from their efforts to 
move aggressively that Newmont sees success in Ghana as 
critical to the future success of the company.  So far, 
Newmont's effort to obtain the support of local communities 
appears to be working.  However, there is clearly more work 
to be done, and Newmont has its hands full convincing the 
public that the Ashanti project will not harm the 
environment.  Fortunately for Newmont, the Government of 
Ghana strongly supports both investments. 
YATES