How Ghana’s gold boom is fuelling deforestation and illegal mining
A Reuters investigation highlights how the global gold boom is driving forest loss and environmental damage. Nukunya examines Ghana's illegal mining challenge, new traceability plans and GH¢200 million land restoration commitment.
Rising gold prices are increasing the economic incentive to mine in Ghana, but forests, rivers and farming communities face mounting pressure. A new Reuters investigation highlights the global environmental costs, while Ghana’s government is promising land restoration and stronger gold traceability.
ACCRA – Ghana’s gold industry is benefiting from strong international demand, but the economic opportunities are accompanied by a serious environmental challenge: mining-related forest destruction, polluted waterways and the continuing expansion of illegal gold extraction.
A Reuters investigation published on 19 October examines how the global gold boom is contributing to deforestation in mineral-rich regions, including Ghana and parts of the Amazon.
The investigation connects the financial incentives created by elevated gold prices with mining activity in environmentally sensitive areas, where weak enforcement and difficulties tracing gold through international supply chains can make illegal extraction particularly difficult to control.
The findings come as Ghana’s government announces new measures intended to address environmental damage and strengthen oversight of the gold trade.
On 19 October, President John Dramani Mahama said GH¢200 million had been allocated towards restoring 5,000 acres of mining-degraded land, with work expected to begin in 2027. A day later, Ghana Gold Board chief executive Sammy Gyamfi outlined plans for a technology-based traceability system intended to identify the origins of gold entering the country’s formal trading network.
Together, the developments highlight a central question for Ghana’s mining sector: can the country capture more value from its gold without allowing the environmental costs to keep rising?
Ghana has announced new land-reclamation measures while GoldBod develops a system to improve gold supply-chain traceability. Both initiatives require implementation and independent assessment.
Why rising gold prices increase pressure on Ghana’s forests
Gold prices affect the economics of mining.
When prices rise, deposits that previously offered limited commercial returns can become more attractive to extract. Higher prices can also increase potential earnings for informal or illegal operators.
That does not mean every increase in gold prices causes deforestation. Mining activity also depends on access to land, equipment, financing, regulation and enforcement.
Reuters reported on 19 October that rising global gold prices have contributed to mining-related forest loss across several regions, including Ghana and parts of South America.
Ghana’s challenge is complex because gold mining supports export earnings, employment and livelihoods. The policy objective is to distinguish lawful, responsibly managed production from operations that destroy protected areas or disregard environmental safeguards.
How gold mining leads to deforestation
Mining-related forest loss can occur through several processes. Vegetation may be cleared to expose mineral-bearing soil or rock, while excavation can remove topsoil, alter drainage systems and leave open pits.
Access routes, equipment areas and mineral-processing facilities can extend the environmental footprint beyond the immediate excavation site.
A 2022 peer-reviewed study in Proceedings of the National Academy of Sciences examined tropical deforestation associated with industrial mining and identified Ghana among four countries accounting for a particularly large share of the directly linked forest loss examined in the study.
Why illegal mining remains difficult to control
Illegal mining, widely known in Ghana as galamsey, remains one of the country’s most contentious environmental issues.
Unlicensed operations can be difficult to monitor, particularly where activities occur in remote areas or move between locations.
Reuters documented environmental and human consequences of unlicensed gold mining in Ghana in October 2024, including hazardous working conditions and mercury use.
However, not all small-scale miners operate illegally. Ghana has a lawful artisanal and small-scale mining sector.
The relevant distinction is compliance with licensing, environmental and other legal requirements. A mining licence does not remove the need for environmental oversight.
What happens to rivers and drinking-water sources?
Gold extraction can affect water systems through sediment disturbance, excavation and the use or release of hazardous substances.
Mining near waterways can increase suspended sediment, potentially making water more difficult and expensive to treat.
Sediment
Excavation can increase suspended particles and affect water-treatment operations.
Mercury
Some gold-processing methods use mercury, creating serious health and environmental risks.
Cyanide
Certain processing operations use cyanide, requiring strict management to prevent releases.
Ghana allocates GH¢200 million for land restoration
At the Mining in Motion Summit in Accra on 19 October 2026, President John Dramani Mahama announced a government allocation for reclaiming land damaged by mining.
Figures attributed to President Mahama’s announcement. They are not independent verification of expenditure or completed restoration.
Mahama also stated that illegal mining had damaged approximately 12,000 acres of land in Ghana.
Environmental damage can persist after mining stops. Excavated land may require stabilisation, soil rehabilitation, drainage restoration and re-establishment of vegetation.
Can GoldBod trace gold back to where it was mined?
Ghana Gold Board says it is developing a traceability system intended to track gold through the formal supply chain.
On 20 October, chief executive Sammy Gyamfi said the organisation expected to award a contract the following week, with licensed small-scale miners and companies expected to begin onboarding before the end of 2026.
The proposed blockchain-based platform would record movements from mine of origin through aggregation, custody, processing and purchase or export.
Explore the proposed traceability process
Select a stage to understand what would need to be verified.
The source location and licensing status must be independently verifiable.
Illustrative workflow based on the proposed system, not confirmation that these checks are currently operational.
A blockchain record does not automatically establish that information originally entered into the system is accurate.
Effective traceability requires credible mine identification, physical verification, secure handling, independent oversight and enforcement.
Why tracing gold is more difficult than it sounds
Gold can be melted, refined, combined with other material and traded repeatedly.
When gold from different sources is mixed, establishing the origin of each component becomes more difficult.
Reuters’ 19 October investigation identified weaknesses in gold traceability as an obstacle to separating responsibly sourced material from gold associated with illegal mining.
GoldBod’s proposed system seeks to address this vulnerability, but digital records must correspond to verified physical movements.
Is Ghana doing enough to protect its forests?
Ghana has announced or introduced measures targeting illegal mining, gold purchasing, equipment monitoring and supply-chain traceability.
GoldBod says it is working with the National Anti-Illegal Mining Operations Secretariat to strengthen responsible sourcing and enforcement.
Environmental regulators have also increased scrutiny of mining operators.
In September, Reuters reported that Ghana’s Environmental Protection Authority had issued a pre-closure notice to Cardinal Namdini Mining over an alleged unreported incident.
Such regulatory action should not be confused with a final legal finding of wrongdoing.
The stronger measure of enforcement success is whether unlawful mining, forest loss and water pollution decline over time.
Why Ghana’s gold boom creates an economic dilemma
Gold is an important source of Ghana’s export earnings, employment and livelihoods.
However, economic benefits and environmental costs are not necessarily experienced by the same people.
Mining revenues may benefit companies, traders, workers and government institutions, while nearby communities can face damaged farmland, degraded forests and water pollution.
Some households depend on artisanal mining because alternative employment and income opportunities are limited.
Formalisation, alternative livelihoods, responsible mining methods and consistent enforcement can therefore complement one another.
Ghana must measure the environmental cost of its gold wealth
Ghana’s gold boom presents a test of how the country defines economic success.
Higher export earnings and stronger mineral-sector performance matter, but they provide only part of the picture.
A fuller assessment must consider forest loss, river conditions, public-health risks, land restoration and the long-term productivity of affected communities.
The proposed GH¢200 million reclamation programme addresses damage that has already occurred. GoldBod’s planned traceability system seeks to improve accountability over gold’s origins.
Both could contribute, but neither should be treated as a proven solution before implementation and evaluation.
Five indicators Ghana should monitor
- Independently measured mining-related forest loss
- Verified water-quality trends
- Gold purchases supported by auditable origin records
- Land successfully restored and monitored
- Mining communities benefiting from sustainable livelihoods
These indicators would help establish whether policy announcements are producing measurable environmental and social improvements.
The fundamental question is not whether Ghana should benefit from its gold resources. It is whether the country can ensure that the value extracted exceeds the lasting environmental and social costs.
With effective regulation, credible traceability and sustained restoration, Ghana has an opportunity to demonstrate that mineral wealth and environmental protection need not be mutually exclusive.
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