Gold's drop destroying livelihoods
Gold's decline may be bad for some investors but it's even worse for mine workers in the town of Dunkwa-on-Offin in Ghana.
Bloomberg reporters recently visited the 33,000-person mining town to see how gold's drop has effect employment. Over the past several months many mines have shut down because they were no longer profitable, leaving behind scores of unemployed young men.
"I don't think I will get any job that pays as well as the gold business," Nana Kofi, a former gold miner told Bloomberg. When he joined the industry his monthly salary went up from $30 to $500; Kofi has been out of work for six months now.
The decline comes after a mining boom which began in the mid-2000's. During that time thousands of Chinese entrepreneurs started up gold operations across the state.
But now, with many projects shutting down, some have found themselves incapable of paying their children's school fees and putting food on the table.
Also, as unemployment rates go up so do crime rates. Two men were recently shot while trying to illegally enter a Chinese mine site. Thefts too are on the rise
"When we attack people with machetes, they have to know that we must eat," Kofi told reporters about the escalating violence, though he added that he would not resort to such measures.
The country recently cracked down on illegal mining and its not just Ghanaians breaking the law: In mid-July the government expelled more than 4,500 Chinese miners.
But Dunkwa-on-Offin is a symptom of a greater problem: In the last quarter the entire country's economy recorded a 3.1% drop. Ghana is the African continent's second largest gold producer after South Africa.
Speaking with the Ghana Broadcasting Corporation on Tuesday, Dr. Toni Aubynn, CEO of the state's chamber of mines, said that while developing countries have no control over global gold prices, they should use their ability to restrict supply in order to adjust prices. Shutting down illegal operations is one way to control output.
See Bloomberg's full video here.