GOLD IN SENEGAL; BUT THIS IS NO ELDORADO

C O N F I D E N T I A L SECTION 01 OF 02 DAKAR 000901

SENSITIVE
SIPDIS

STATE FOR AF/W, AF/RSA, DRL/AE AND INR/AA
PARIS FOR AFRICA WATCHER

E.O. 12958: DECL: 07/15/2019
TAGS: PGOV PREL SOCI ECON PINR KDEM KTIP SG
SUBJECT: GOLD IN SENEGAL; BUT THIS IS NO ELDORADO

Classified By: CDA J.T SMITH FOR REASON 1.4 (b) AND (d)


1. (C) Summary. In an effort to verify claims of alleged
child labor and to get a first-hand look at Senegal's
up-and-coming gold mining sector, Poloff conducted an
unannounced visit to an artisanal gold mining village near
Kedougou. Reports of child exploitation could not be fully
corroborated. Meanwhile, against the backdrop of a December
2008 riot in Kedougou, poloff also visited a large-scale
Australian mining operation that some claim were cheating
them out of jobs. A visit to the Sabodola Gold Mines
confirmed an operation at full employment capacity but a
tacit acknowledgement from management that more needed to be
done on the public relations front to explain to the local
population what gold mining is about and how much they have
already contributed to the local economy. End Summary.

Welcome to the Kedougou "Gold Rush"
--------------


2. (C) The artisanal gold mining area around the village of
Bantoko is some 32 miles north of Kedougou in an area that
has been long been known for its gold reserves. Poloff
visited the site to investigate reports of widespread child
labor. These claims appear to be overstated. The gold
mining operation in the mines surrounding the village of
Bantoko is amateur and relies chiefly upon heavy labor. Each
mine that was visited had a team of about ten men aged
between 17 and 50 working around a single hole that some had
been digging for up to two years. Mining of this style is
hazardous work that is extremely labor intensive, requiring a
lot of strength. Holes that are 10-15 meters deep are dug by
hand, braced with wooden scaffolding and then soil is hauled
up using a makeshift pulley to which miners attach the
ubiquitous 50 kilo rice bags seen in all of Senegal's
markets. The men work in shifts extracting bucketfuls of ore
that they then pound into gravel and sift for gold. The
actual amount of gold, if any, extracted from a bucketful of
ore is less then a few milligrams. Poloff worked both the
pulley and pounded the gravel into a fine dust and judges
that it is not a job that a pre-teen or young teen could do.
While children were present in the mining town, they were
there as part of larger family units that accompany the
miners.

Rules of Engagement
--------------


3. (C) The extracted gold is usually sold to traders who
export it to Mali. A typical operation consists of a mix of
Senegalese, Gambian, and Malian workers reporting to a
Senegalese owner and a head miner known as the "Tumbulumain."
Tumbulumaines provide security for various sites and
organize the entire mining operation. The Tumbulumain also
represents the village chief who is paid a royalty on all
gold that is mined. The mining town of Bankoto was rather
destitute, with indications of prostitution. In spite of the
remoteness of the town, many of the shopkeepers were Mourides
from Touba known as "Baol". In a wry comment, one of these
shopkeepers noted, "These southerners are neither interested
nor have the know-how to trade." Reports of the use of
mercury also appear to be overstated, since most artisanal
miners have been taught how to utilize mercury in a safe way
by a local NGO called "La Lumiere." Poloff also established
that artisanal miners receive the going rate of USD22/gram
for the gold that they extract.

Welcome to the Big Leagues
--------------


4. (C) Poloff's visit to Sabodola Gold Mines (run by
Australian mining firm MDL) was a sharp contrast to the
artisanal mining operation. A twenty-six square kilometer
tract of land has been leased to the company, which sits atop
a long vein of gold deposits that is known to run hundreds of
miles from Mali to Burkina Faso. Giant one-hundred-ton
Komatsu dump trucks extract sixty tons of ore in a single
load. When poloff asked why they did not buy American, the
mine's chief foreman replied that Komatsu's package was USD 4
million less than Caterpillar's and that Komatsu included the
tires in the deal. Each tire for these behemoths costs USD
20,000. Work that would take artisanal miners years is
literally done in seconds. The rock ore is then put through
a four story high industrial crusher and mixed with cyanide
to extract the gold. The Sabodola plant goes through 1.2
million tons of rock ore in a month as about each ton of ore
contains maybe 2-3 grams of gold. The current excavation
site is relatively small and at the time of Poloff's visit
they had only dug a pit down to twenty meters. The final pit

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is expected to be 1 kilometer long, 600 meters wide and 250
meters deep and the company does have a plan to return the
environment to the way it was before they arrived. 140
megatons (NOTE: 1 megaton equals one million tons. ENDNOTE)
of rock ore will be stripped from the land towards reaping
expected reserves of 21.7 metric tons of gold.

Significant Investment under the Radar
--------------


5. (C) In spite of a 300 million dollar investment, local
discontent associated with mining activities has clearly left
the company on edge. They openly admitted to not doing a
very good job of public relations or marketing even thought
MDL has built several clinics and schools while also
purchasing all of their food products to feed their 700-plus
employees from local villages. However, a lack of a clear
message from all the mining companies in the area as well as
the government means that local people do not recognize these
contributions and expect more results from the precious
resource being extracted from their land. Sabodola officials
remarked that mining giant Arcelor-Mittal made things worse
when they posted signs throughout the region pointing to all
the future development they will be making. The Government
of Senegal (GOS) has given its strong support for this
project and President Wade was present for the grand opening.
Oromine, a Canadian company, and Rand Corporation, a South
African company, are also in the surrounding area prospecting
for locations to establish a mine.

Fair Wages and Treatment for the Few Chosen
--------------


6. (C) 1700 workers, consisting primarily of local unskilled
Senegalese, were utilized in the construction of the plant,
its dormitories, perimeter fencing, retention lakes, and
roads. After construction was completed, the labor force was
cut to 700. This remaining workforce consists of 400 skilled
Senegalese nationals with the rest coming from 22 other
countries. Labor standards within the plant are way above
local norms. The employees live in air-conditioned dorms,
have high pay, food whenever they come off shift and
amenities such as a massive games and movie room and a gym.
The employees work 10-hour days (12 hours if overtime) for
two weeks and then get paid one week's leave. Air
conditioned buses take workers back to Dakar during their
scheduled one-week furlough. The plant has been operational
for eight months without an accident or employee injuries to
date.

Comment
--------------


7. (C) Sabodola Gold Mines and other foreign mining elements
need to establish a stronger commitment towards working with
the local population. While wages and conditions for their
few workers are exemplary, they have not made enough
provisions towards engaging the local population in highly
visible socially responsible activities. The possibility of
a recurrence of the December 2008 riots is possible if local
people feel that they are not getting.
SMITH