The Gold Coast Mining Industry
Having but casually referred to the Gold Coast mining industry, it has been suggested to me that a few remarks might be contributed to the subject in an Appendix. I am somewhat reluctant to write anything on the point, because I know absolutely nothing about mining; and the opinions I have formed, such as they are, are the outcome (1) of conversations with a number of men who are more or less experts, and have formed their views of the prospects of the Gold Coast mining industry from personal investigation on the spot; (2) the perusal of a quantity of reports by Companies which are operating and prospecting... and by Companies which are doing nothing at all but squander their shareholders’ money; (3) historical research and study of the past performances of the Gold Coast as a gold producer. Beyond that I have no knowledge whatever; nothing but opinions, which perhaps the reader will kindly bear in mind when perusing the following notes.
There is not the slightest doubt that gold exists in considerable quantities in West Africa. The earliest records we have of any trade at all being done on the West Coast of Africa is a trade in gold dust. The external trade of West Africa dates back to the period when the Negroes beheld the Carthaginian galleys bearing down upon their shores. The internal gold trade of West Africa is probably even more remote—but there we enter the domain of conjecture.
There is not the slightest doubt that the Portuguese, Dutch, English, French, and so on, obtained enormous quantities of gold from the Gold Coast.
For many years the gold trade in the Gold Coast has practically been a thing of the past. The gold trade, as a trade, is long since dead.
At the beginning of last century the great gold store—which had been accumulating for ages—of the Coast peoples of the Gold Coast became exhausted. At that period the Ashantis, farther inland, still retained large quantities of gold ostentatiously displayed. James, Bowdich, Dupuis, Hutton, and Hutcheson bear witness to that. With the gradual undermining of the Ashanti Kingdom this store also disappeared.
Coming to more recent times, we find that the geological formation known as “banket” was discovered in 1878 in the Takwa district by a French traveller called Bonnat. That seems to have been the basis of the future modern mining industry in the Gold Coast, replacing the extinct trade.
Many years of disappointment and failure followed Bonnat’s discovery, due in a very large measure to the absence of transport facilities and to mortality. However, some of the mines which had come into existence subsequent to the discovery refused to be discouraged, and went on working, more or less half-heartedly, notably in the Wassau and Takwa districts.
In January 1900 the scene changed, as though by a magician’s wand. The man who waved it was a Mr. Stanley Clay, an engineer reputed of considerable ability, in the employ of the Consolidated Goldfields of South Africa, which Corporation had been approached by the men who owned the Wassau and Takwa mines. This gentleman reported in effect that the banket formation of the district he had been despatched to examine was so like the banket formation of the Rand as to be hardly distinguishable from the latter. Although some years previous to that report the Ashanti Goldfields Corporation, Limited—the parent, so to speak, of the Ashanti mines—had come into existence, I believe I am correct in stating that the remarkable “boom” in Gold Coast mining undertakings practically dates from the favourable report above alluded to.
Be that as it may, the last two years have witnessed the extraordinary movement with which every one is familiar. According to “Wallach’s West African Manual” for June 1901, 321 companies had at that time been created, with a total nominal share capital of £25,567,170. “The issued share capital will amount to approximately £15,750,000, if all is fully paid up.”310
This is truly colossal. But all is not gold that glitters. The boom, prematurely, and to a large extent, dishonestly engineered, collapsed. Deep distrust has taken the place of sanguine anticipations, and public confidence, greatly shaken, is apt to rush to the opposite extreme. The Gold Coast mining industry has many enemies and many unwise friends. The “boom” was, of course, thoroughly unjustified. The public lost their heads completely. Company after company was formed, a large proportion of which hardly knew where their territory lay, let alone whether it contained any gold. But the public did not care twopence so long as it was a Gold Coast venture, and a great many rascals have done excellently well out of the British investor. Finally, this constant flotation of companies got to be in the nature of a scandal; and the Governor of the Gold Coast, in a courageous speech, which has remained famous, before the local Chamber of Commerce, and for which Sir Matthew Nathan deserves the greatest possible credit, denounced the abuses which the movement was giving rise to. Mr. Chamberlain promptly endorsed the Governor’s views, and caused a public statement to be made which fell like a bombshell on the market-riggers. Flotation of new companies after that was an almost impossible task, and the market received a staggering blow from which it has not yet recovered. There is pretty certain to be renewed activity at some not very distant day. Let us hope that the next time it will rest on something more tangible than fairy tales.
That gold exists in the Gold Coast is demonstrated beyond a shadow of doubt. That it can be worked at a profit has yet to be satisfactorily proved, even in the case of the properties which are, or will be, in close proximity to the railway now in course of construction. For the purposes of illustration the Gold Coast may be divided into three portions. First, where gold exists in such quantities—other conditions being favourable—that it is reasonable to believe the mines, if economically and wisely administered, will become dividend-producing. Secondly, where gold exists, but not in sufficient quantities—the conditions of mining in West Africa being what they are—to enable the mines ever to become dividend-paying. Thirdly; where no gold exists at all.
Now when it is borne in mind that options have been acquired by individuals pretty well all over the country, and companies have been formed to work those options, it will be easily understood that shares of a considerable number of existing companies are not worth the paper upon which they are inscribed. In my opinion, if Mr. Wallach’s “321” companies were divided by six, the residue would be an optimistic prophecy as to the number of Gold Coast mining companies existing ten years hence. This number would be amply sufficient to allow of the Gold Coast to become, what I believe it will become, a gold-producing region of very considerable value. Personally, I am as equally convinced that some of the mines will become good dividend-payers, as I am that the majority are rubbish. The two main difficulties which the mining industry in the Gold Coast have to face are climate and transport.
The first is a very real difficulty, and the public would do well to treat with the utmost scepticism reports emanating from directors of Gold Coast companies, especially those whose properties are situate near the coast; who pooh-pooh the danger of the climate. If Major Ross’s indefatigable efforts are backed up by the authorities and the mining companies, we shall see a better state of things before many years are past. But that the climate will always be an adverse element to contend against is positively certain. Those who say the contrary are not dealing honestly with the public.
Many people imagine that transport difficulties will vanish when this crawling single line to Kumasi has been completed. Let those who are inclined to that belief study one of the excellent maps of the Gold Coast mines now available, and see how many of the properties, out of the total of companies floated, approximate sufficiently to the line to feel its usefulness. Before transport difficulties can be said to be overcome, the Gold Coast must be a network of railways. That may come, but the time is not yet by a long, a very long way.
The alleged labour difficulty I have dealt with elsewhere. It is largely fictitious, as the most reputable companies and the most experienced Europeans will bear witness. The boot, the stick; abuse; inadequate pay; dishonest dealing—so long as these incentives to labour exist on the Gold Coast, and they exist to-day, so long will certain people endeavour to make the British public believe that labour is improcurable in West Africa save by measures of coercion, or by Asiatic emigration, or by draining the other West African colonies of their able-bodied men. Decent wages; just treatment; tactful dealing; a high type of representative—the mining companies which supply these have not, and will not have, occasion to complain. The Administration might play a useful part in imitating the French policy of obtaining labour for the Guinea Railway, viz. through the Chiefs, and through them alone, and refuse to allow authorised or unauthorised recruiting agents.
From the point of view of the investing public, those who contemplate putting any money into the Gold Coast mines should carefully weigh the difficulties mentioned against the counterbalancing reasons for optimism in the facts (1) that some undoubted experts, and some men of undoubted integrity and ability who have a reputation to lose, have staked that reputation upon the existence of “paying” gold in the Gold Coast; (2) that a powerful corporation has undertaken a heavy liability in guaranteeing a certain sum for a number of years to the Gold Coast Railway; (3) that a very large sum of money has been sunk in the country for the purpose of mining enterprise; (4) that the past history of the Gold Coast is all in its favour. Finally, the investor should discriminate carefully between the companies and “groups” which are justifying, or honestly seeking to justify, their existence and those that are not.