World Bank backs controversial gold mine.

Despite months of pressure, the International Finance Corporation (IFC), the World Bank's private-sector arm, on January 31 approved a loan of US$125 million to Newmont Mining Corporation for its Ahafo gold mine project in Ghana. Ghanaian and international organizations had urged the Bank to postpone funding until it adequately addressed the project's human rights and environmental impacts, ranging from displacement of local residents to the threat of water contamination.

World Bank support for large oil and mining projects in Chad, Guatemala, Peru, and elsewhere has been the source of significant controversy in recent years. The Ghanaian project was approved just weeks after Bank President Paul Wolfowitz suspended the institution's support for a high-profile oil pipeline project in Chad over the government's decision to use oil revenues to fund the military.

In the last two years, Newmont has faced community protests at its operations in Peru and Indonesia over environmental contamination and health concerns. Communities in Ghana have similar worries: an independent technical review revealed that Newmont failed to provide sufficient information to assess risks of water contamination from the Ahafo mine, which will use cyanide to extract the gold. The Wassa Association of Communities Affected by Mining (WACAM), a Ghanaian community-based mining advocacy organization, says that weak laws governing the country's mining sector make it nearly impossible to hold companies accountable in the event of environmental catastrophes such as cyanide spills.

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During the first phase of the project alone, the Ahafo mine will displace 9,500 Ghanaians, nearly all subsistence farmers. Yet land replacement measures critical to restoring local livelihoods remain incomplete or uncertain, according to Newmont's own assessment. The mine will generate a relatively paltry $300 million over 20 years for the government of Ghana and create just 620 long-term jobs, while resulting in the economic displacement of nearly 20,000 people when both phases are completed.

Non-governmental groups argue that the development benefits of the project hinge upon the restoration of sustainable livelihoods and the protection of clean water for affected rural communities. "The World Bank needs to ensure that land and water resources are protected, not damaged, if it expects to alleviate poverty and promote sustainable development in Ahafo," said Mike Anane of FoodFirst Information and Action Network in Ghana.