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PACT

Pact is a non-profit international development organisation that works on the ground to improve the lives of those who are challenged by poverty and marginalisation.

Artisanal and small-scale mining (ASM) has a vital role to play in poverty alleviation and rural development. It also poses severe human rights and social challenges. The mining model pursued over the last 30 years has focused on industrialisation and pursued economies of scale for mineral extraction. A persistent focus on large-scale mining has pushed ASM to the margins, allowing it to be disregarded and remain largely unregulated.

Yet ASM supports millions of livelihoods around the world and can be a major contributor to local and national economies. The men, women and sometimes children that work in the sector use basic tools in tough, often unsafe conditions to produce as much as 15 percent of the world’s cobalt, 15 percent of its new gold, 50 percent of its tin, and over 80 percent of coloured gemstones. Ninety percent of the world’s mine workers are artisanal miners. They produce around 10 percent of all minerals.

ASM is difficult and dangerous work, but it is also lucrative. Miners generally earn more than other rural workers. Their higher income is recycled into local communities. Flourishing markets for goods and services develop around mining areas, stimulating local economic opportunity and development. Although ASM can sometimes divert labour and resources from other important economic activities, it also provides a financial fall-back in times of drought, crop failure, or population displacement.

Mineral smuggling and illegal trade is part-and-parcel of ASM activity, but the sector also generates important revenues for the state. In many cases it can be a significant contributor to GDP. Where governments have recognised its potential contribution they have acted to divert mineral flows onto the legal market. In Zimbabwe, for instance, changed gold buying policies, competitive pricing and practical market adjustments have increased ASM gold flows significantly. Zimbabwean ASM employs around 7 percent of the workforce, produces some 31,000 ounces of gold annually and contributes 1.2 percent to GDP. In the Great Lakes Region of Central Africa, introducing traceability of tin, tantalum and tungsten (3Ts) means that over 20,000 tonnes of conflict-free minerals per annum can now be produced and traded by ASM operators with full payment of all legally required taxes.

The social and environmental challenges and abuses associated with ASM are widely understood. In conflict-affected areas, miners are frequently forced to work under duress. In areas of extreme poverty, workers may be operating in dangerous conditions. Large-scale mines also complain about ASM’s inefficiency and poor product quality. Some are concerned that the sub-standard ore bodies it produces contaminate their own products.

Given these facts, it is entirely understandable that there are those that advocate for ASM to be replaced with larger, safer installations, but this fails to appreciate its economic and cultural importance. There have been many well-intentioned initiatives to create alternative livelihoods for artisanal miners. They have rarely been successful. For practitioners, ASM is more than just an attractive source of income, it is imbued with history, cultural significance and questions of resource rights.

Rather than trying to avoid, ignore or ban ASM, we need to explore ways to manage it responsibly and look at how we can integrate ASM material more effectively into formal supply chains. These are the world’s hidden suppliers. By recognising and engaging with them, it becomes possible to assess their socio-economic importance more accurately. Once their value has been properly quantified, their potential contribution to sustainable development can be improved.

The systems and procedures employed by large-scale mines may not be applicable to ASM, but there is a ‘sweet spot’. Artisanal production can be made more efficient, safer and be better regulated through small-scale mechanisation and by enforcing minimum expectations for responsible supply chains. This approach can help to maintain the high levels of employment it offers while enhancing its contribution to communities and the state.

The challenges posed by responsible cobalt sourcing offer a remarkable opportunity to demonstrate the value of this formalisation of ASM in mainstream mineral markets. If this can be achieved, the benefits for the sector will stretch far beyond Africa’s Copperbelt.

 

Karen Hayes
Vice President, Pact