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Standing up for small-scale mining

Carly Leonida explores the potential for greater collaboration between commercial miners, and small-scale and artisanal operators

According to the International Institute for Environment and Development (IIED), artisanal and small-scale mining (ASM) have experienced significant growth in recent years due to rising mineral prices and the increasing difficulty in earning a living from rural activities, such as agriculture.

“ASM is generally pursued as a route out of poverty or as an activity to complement insufficient income, especially in communities where alternative employment is hard to come by,” states the report, Global Trends in Artisanal and Small-Scale Mining.

Here are some interesting facts for you:

  • The DELVE database states that 44.6 million people are directly engaged in ASM across the globe, 30% of whom are women.
  • According to the Alliance for Responsible Mining, ASM employs up to 90% of the workforce (approximately 20 million people) behind global gold production.
  • Over 150 million people are thought to be indirectly dependent on the ASM gold sector alone in over 80 countries.
  • In comparison, just seven million people were employed in industrial-scale mining in 2013.
  • The ASM sector had similar fatality rates in 1999 as the US and South Africa’s large-scale mining (LSM) industries did in the 1970s and 1980s, respectively.
  • The International Labour Organisation estimates that more than one million children work in mines and quarries globally.

Today, despite its low productivity, ASM accounts for up to 20% of global gold supply, 80% of sapphire supply and 20% of diamond supply. Artisanal miners also extract, pre-process and trade in high-value commodities such as tin, tungsten, tantalum, cobalt and mica that are used in consumer goods like electronics and batteries. For example, ASM provides around 26% of global tantalum production and 25% of tin.

A family in Kailo, Congo, mine wolframite and cassiterite. Photo: Julien Harneis/ Wikimedia Commons

It’s reasonable to expect that, with surging demand for critical metals to enable the green energy transition, the number of people engaged in ASM globally will continue to grow.

And, given that the UN Sustainable Development Goals are now at the heart of many large-scale mining (LSM) companies’ business strategies, it’s incumbent on the commercial industry to find ways coexist with ASMs and include them in the transformation underway to make mineral extraction more responsible.

One and the same

In recent years, pressure on governments has been mounting to shut down ASM operations or to change the way in which they operate. However, moving people away from ASM into other sectors is not always an option, as there are typically few employment opportunities in the regions where ASM occurs.

Photographer, Hugh Brown, has been documenting the lives of ASM workers across the globe for the past 15 years.

Having witnessed first-hand the effects of their displacement in favour of LSMs, he has been lobbying policy makers and industry through his latest project, GARIMPEIROS (a Brazilian term used to describe independent prospectors, in case you were wondering), to improve prospects for these miners.

Photographer and activist, Hugh Brown. Photo: Hugh Brown

“My goal is to make the world aware that these people exist and ensure they are given a seat at the table when decisions are taken about their lives,” he told me.

“People often talk about the presence of issues like organised crime, extremism, or human trafficking in the context of ASM; they expect these things to be very visible. But, in reality, you often have to scratch quite hard to find them. They’re a hidden challenge.

“Another key learning is that these people are no different to those who work in LSM. If you think of fly-in, fly-out mine workers putting in 84 hours a week in Western Australia… They are well remunerated, but they’re spending a lot of time in remote places, sacrificing the life they could be living to create better lives for their families.

“Most of the ASMs that I photograph haven’t been forced into mining. They’re sacrificing the life they could be living now for the prospect of a better life for their families. We all have those same objectives.”

Defining success in ASM

What do you see as the biggest challenges in improving future outcomes for these workers? I asked.

“Today, there’s no clear definition of what success looks like in ASM,” Brown said. “It’s very subjective. There can be diverging objectives between countries, within countries, and between governments and companies. Sometimes there isn’t transparency among the solution-finders as to what their own objectives are. That’s something that needs to change.

“I’ve just joined the board of the Fair Cobalt Alliance. They’re working to clean up the supply chain in the DRC, to make it more palatable to large-scale companies in the West.

“From that work, it’s become clear that, without a definition of what success looks like in ASM, it’s very easy for company metrics to be skewed or misinterpreted. At the end of the day, we have to question whether the lives of these people have actually been improved. For me, that’s the only true test.

(Side note: there are some interesting perspectives on ‘success in ASM’ here.)

“There’s also the issue of resource scarcity. Between 2010 and 2020, the mining industry discovered less than half the amount of gold as in a single year in 1990. Commercial orebodies are getting harder to find, particularly in the developed world.

There are only five locations where we’re realistically going to find new resources going forward: in wilderness regions, polar regions, the sub-sea environment, extra-terrestrial locations and the developing world.

“Of those, the developing world is by far the easiest to access, so this is an issue that’s only going to intensify with time,” said Brown. “More and more, we’re seeing conflict between LSM companies and ASMs, sometimes with devastating consequences.”

It’s also worth remembering that these ‘new’ jurisdictions are not necessarily new. They’re just new to LSM; ASMs are probably already working there using traditional methods. So how can LSM companies learn from past mistakes and make sure that, when they head to these destinations, they put the interests of ASMs at the fore?

Time to talk

A large part of the answer lies in better communication and engagement with communities who are often home to ASMs (see our recent article on community engagement).

By engaging in a timely, respectful and culturally appropriate fashion, there is an opportunity to better understand the needs of ASMs and their own ambitions, as well as how they could potentially intersect with the interests of LSMs.

Aside from the obvious opportunity to better the industry’s overall environmental, social governance (ESG) performance, there is the potential for ASM and LSM to complement each other in meeting future metal demand. For example, one of the challenges in LSM is the industry’s slow response to fluctuations in metal demand.

If mutually beneficial agreements could be struck, ASM could help to fill that lag as small-scale operations are more agile and can respond faster to supply changes without massive investments.

Cobalt ore. Surging demand for critical metals is likely to increase the prevalence of ASM. Photo: Paul Alain Hunt/Unsplash

As economies of scale start to reach their limitations in commercial mining, it’s also likely that smaller operations with smaller footprints and, potentially, better environmental credentials (although this is not always the case today) could become more prevalent. And who better to operate them than people who live in the local area, who know the environment, and care about it?

Brown agreed: “Artisanal mining, if it’s done right, could play a huge role in future metal supplies. But we need to get people trained, capitalised and mechanised to ensure that they can work safely, and we need to have scalable plans in place to support them if they get displaced by LSM.”

Certification and formalisation

To date, ethical certification schemes and standards have proven some of the most effective tools in supporting and incentivising ASMs, and in improving social and environmental practices.

In its aforementioned report, the IIED explains: “Standards such as Fairmined and Fairtrade Gold aim to foster responsible ASM cooperatives, provide assurance of minimum standards of production, and support the sector’s formalisation and professionalisation.

“In addition, ‘chain of custody’ initiatives aim to ensure traceable supply chains from mine to market that are free from conflict and human rights abuses. They respond to the need of companies seeking to meet international regulations and/or voluntary codes and to ensure good business practices.”

In some countries, 70-80% of small-scale miners are informal. The IIED says this can create socioeconomic, health and environmental impacts, which trap workers in cycles of poverty and exclude them from legal protection and support.

To better understand some of the challenges and opportunities, I turned to Natalia Uribe, Standards and Assurance Manager at the Alliance for Responsible Mining. Uribe is currently leading a revision of the Fairmined standard – version 3.0 – which is due to be finalised later this year.

“While many ASM operations are poverty driven, some operations see mining as the best way to strengthen their communities and are looking to lead the way in responsible mining practices,” said Uribe. “With the right support and incentives, small community mining organisations offer some of the greatest opportunity for positive social and environmental impact.”

Uribe explained that one of the biggest challenges for ASMs is the lack of appropriate legal frameworks in many countries, i.e., those that are geared towards artisanal and small-scale operations rather than mid-large sized ones.

It’s very difficult for ASMs to comply with frameworks that either don’t exist or are unsuitable for the realities of their operations.

Certification and formalisation are not only important in securing a market for ASM products but also in protecting the environment – they demonstrate that companies are avoiding polluting practices and chemicals.

There are tools such as the Code of Risk-mitigation for Artisanal and small-scale mining engaging in Formal Trade (CRAFT) which act as an entry-point standard and complement certification systems. Together, they create a pathway for a larger share of ASMs to engage with formal markets, initiating due diligence and progressive improvement in environmental and social practices.

Large-scale mining employs only a fraction of the number of people that artisanal and small-scale mining does globally. Photo: Pixabay

“Lack of mining titles or rights can also make things difficult for ASMs in proving the legitimacy of their activities,” Uribe told me.

“Governments often prefer to grant titles to big mining companies which can result in conflict with ASM miners who are already working the land. However, there are examples, for example, in Colombia, where LSMs have struck agreements with ASMs to process the gold extracted from their concessions.

“This coexistence, with clear responsibilities and agreements, and also in a way that respects the autonomy of ASMs, can be very beneficial for both parties.”

In 2020, ARM signed an agreement with the Initiative for Responsible Mining Assurance (IRMA) to jointly promote the win-win coexistence of LSM and ASM. The aim is to provide consistency and clarity for those sourcing from responsible ASM and LSM, and to maximise the potential contribution of the mining industry to sustainable development.

Supporting small businesses

Increasingly, consumer industry standards require that companies like jewellers buy a certain percentage of their gold from the ASM sector.

While many companies (including LSMs) see doing business with ASMs as a risk, the flip side of risk is opportunity, and by assigning a portion of their sourcing needs to small operators, companies can better manage ESG risks throughout their supply chains.

Ultimately, gold is a commodity that holds value and will find a market whether formal or informal, so it’s better to ensure that it’s bought from responsible, certified producers.

It’s also a way for corporates to extend positive influence beyond the boundaries of their own organisations, which can only be seen as a good thing in the eyes of investors and consumers.

“Companies up and down the supply chain that really want to have a positive social impact and are serious about social responsibility need to engage with ASMs, NGOs and governments in developing the appropriate mechanisms to help lift these people out of poverty,” said Uribe. “If we can do this and find ways to coexist, then it can be a win-win situation for everybody.”

Today, more than 400 businesses buy Fairmined gold and ARM would like to see this grow further. The initiative expects to have a draft version of the updated standard ready in the third quarter of this year, with the final version ready by the end of 2022, or early 2023, following consultation with certified miners and buyers.

“We are working to refresh the standard, make it more progressive and make certification more accessible, especially for ASMs,” Uribe explained. “We also want it to reflect the responsibility of ASMs in climate change mitigation.

“Hopefully the new standard will encourage the market to source a greater percentage of gold from ASM operations, and inspire LSMs to forge mutually beneficial relationships with ASMs. We are trying to innovate from all sides.”

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