Don’t miss the first ever panel on artisanal and small-scale mining (ASM) on the Mining Indaba Main Stage, taking place at 12pm on Wednesday 5 February.
Chaired by our founder and CEO, Estelle Levin-Nally, it will feature panellists Professor Saleem Ali (University of Delaware), Pamela Fierst-Walsh (U.S. State Department), and Feriel Zerouki (DeBeers). They will share their experience and advice, addressing questions of key importance to the sector today:
- Are we experiencing a tidal shift in the status of ASM as an acceptable provenance for responsible minerals and as a legitimate member of the minerals sector?
- How can ASM be engaged in the pursuit of the SDGs (as is happening in over eighty countries)?
- How can investors, mining companies and governments work collaboratively with artisanal miners to generate compliant, productive and commercially viable business relationships?
Interest in ASM and their legitimisation as an economic actor represents a growing trend
With ASM featured on the Mining Indaba Main Stage for the first time, it is a reminder of the increased public prominence of ASM and its growing relevance in the minds of investors, buyers and regulators. This is reflected in our work, where we see a number of current trends in the relationship between ASM and the wider industry.
- Trend 1: Market expectations are changing. In the last few years we have seen a rapid expansion in expectations concerning the responsible production and trade of minerals. This has moved from the management of the worst human rights abuses and white collar crimes in the world of ‘conflict minerals’, to the incorporation of other issues such as environmental impacts and working conditions, and from a narrow focus on 3TG (tin, tantalum, tungsten and gold) and the African Great Lakes region to a growing variety of minerals and a global scope.
- Trend 2: ASM is increasingly recognised as a legitimate part of the industry. Unlike some years ago, market actors, civil society and governments are increasingly encouraging engagement with ASM and condemning business decisions that lead to the marginalisation and exclusion of ASM. While they still recognise the problems ASM faces and the risks this activity generates for buyers, they also acknowledge that these problems are best addressed through constructive engagement and step by step improvements. Today, companies (including mining companies) are publicly commended for engaging with ASM where they do so with appropriate risk management systems and impact objectives in place.
- Trend 3: Both companies and governments have already started to make use of the opportunity presented by ASM.
- For governments, engaging with ASM can foster economic, social and environmental benefits. Formalisation of the sector, i.e. by providing jobs, livelihoods and income for the local population (including the least skilled), economic diversification and increased government revenues support local and national development. Kenya, Mongolia, Nigeria, and Tanzania are just a few examples of countries that have taken steps to formalise their ASM sectors in recent years. Dialogue and inclusion in ASM strategy and policy setting paves the way for trust building, opening avenues for cooperation, stability, and conflict prevention. Fulfilling the duty to protect human rights generates social benefits, including improved protections for vulnerable groups involved in the sector and gender-responsive policy and technical assistance.
- For companies downstream, sourcing from ASM can present an opportunity for positive impact where those ASM are involved in initiatives that seek to advance the SDGs. Initiatives such as the Better Gold Initiative, and companies such as Chopard, Fairphone and Valcambi (as well as many others) are now engaged in responsible sourcing and due diligence programmes around ASM sources.
- For upstream companies, engaging with ASM through structured and well managed processes can enhance their social licence to operate, open access to new supply, and improve the management of ASM relationships as a material risk. All of which prevents disruption to their operations, protects reputation, and can ultimately mitigate the risk of economic loss and even earn them recognition as leaders. One example is the Chemaf/Trafigura project with Pact and Kumi in the DRC. Companies such as Newmont, Anglo Gold Ashanti, Barrick or Goldfields also engage with ASM or have developed strategies for engagement.
What can mining companies, investors and governments do to work constructively with ASM?
Here are a few insights from our research and work with both governments and companies along the supply chain about how the mining industry can engage with ASM and help address its challenges:
- Solution 1: Work together. Mining companies or companies in the mineral value chain cannot solve the issues presented by ASM by themselves. Governments play a crucial role in the formalisation of the sector, but companies can act as facilitating business partners, transferring and mobilising knowledge and capital and setting conditions that can remove barriers to responsible production and trade by ASM. The best results are achieved when governments and companies work together, and also involve representatives of ASM communities and civil society. Such multi-stakeholder initiatives may be complex and relatively slow, but often fruitful in the long term
- Solution 2: Co-exist with ASM. LSM and ASM can co-exist peacefully and even be mutually beneficial. Some mineral deposits may not be economically viable for large scale, industrial exploitation; in many places a mix of mining scales and methods will be the most efficient way to extract mineral wealth. Mining companies can also mobilise their technical expertise and knowledge to support governments in establishing viable ASM areas or concessions, where ASM can operate formally and co-exist rather than compete with LSM, reducing the risk of invasions or clashes. Together with the government authorities, companies may even provide technical assistance to (legitimate) ASM in their vicinity, so that they can professionalise and improve their operations. We talk about further options for co-existence here.
- Solution 3: Collaborate with and buy from ASM. Companies in the mineral chain should not be afraid to buy from ASM and to collaborate with ASM. ASM sources can present a lot of risk, but so can LSM sources. The key is to have an appropriate due diligence system in place and to find ways to collaborate with suppliers to address and mitigate risks. In the case of ASM sources, this requires on-the-ground spot checks or having a local organisation that can take on the monitoring of risk. Beyond this, there is the opportunity to not only address risks and minimise harm, but to create positive impact for ASM and local communities – for example by supporting initiatives that help miners to make their operations safer, more professional and more environmentally friendly, to improve their organisational capacities, or to help them access credit and finance. While this takes effort and a tolerance for improving over time, we have seen that companies taking this step have been lauded publicly and enhanced their reputation for working with instead of against ASM.