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Obstacles to ASM Formalisation:  An Ethiopian Case Study

Obstacles to ASM Formalisation: An Ethiopian Case Study

January 11, 2017, by Adam Rolfe


A first hand exploration of the challenges artisanal miners face in their bid to formalise – including licenses, legalities and large scale mining

In 2016 I conducted a field trip in Ethiopia, where I was struck by the enormity of the challenges artisanal miners face in their bid to formalise.

The beautiful landscapes of Ethiopia

In developing training tools for female artisanal miners in efficient, safe and environmentally friendly mining methods (gold and salt) and lapidary (gemstones), ELL was able to understand the reality for the sector on the ground, in order to improve practice and grow potential.

The project, which directly trained upwards of 160 artisanal miners and local and national government officials, equipped artisanal miners with the tools and techniques to transition towards small scale, partially mechanised production and processing of minerals. This is in line with government policy to oversee the transition from artisanal mining (AM) to small-scale mining (SSM).

In November, we completed this project for the Women and Youth Affairs Directorate of the Ministry of Mines, Petroleum and Natural Gas of the Ethiopian Government. Nonetheless, outside of the support offered by development programmes it is difficult to see how AMs can make a successful transition to SSM, especially within the timeframe and under the conditions required by the Ethiopian mining code and subsequent proclamations. The scale of the task is enormous.

The Bid for a License: Slim Odds

According to the 2013 proclamation, artisanal mining licences are valid for a period of just 2 years. In that time AM Organisations must form into a recognised legal structure, such as a cooperative or business – this is easy enough. Beyond this, they must deposit the equivalent of approximately $2,500 USD into a savings account, undertake a professionally recognised Environmental Impact Assessment and upgrade production methods (purchasing for example mills, sluices and water pumps) in order to qualify for a small-scale licence.

The catch is if they cannot do this, artisanal miners lose their de juris right to mine, even if it remains de facto intact. It is a gamble, then, to invest heavily in scaling up production; miners risk everything should they fail to meet the criteria in the given timescale.

The odds of successfully transitioning to SSM in the timescale provided seem remote. In Benishangul-Gumuz, one of the principal gold mining regions in the country, we were informed by the Regional Mining Bureau that no AMs had transitioned to SSM in 2015. In Tigray, the situation was marginally better, the number of SSM licences obtained in 2015 was reported as being under 20, but compared to the number of mining operations in the region this is a drop in the ocean.

Panning at the gold mine

The pull of a rich deposit and losses for the little guy: from ASM to LSM

And this is where it gets really interesting. According to the save-and-upscale principal, AM operations that have the greatest chance of overcoming the odds to obtain a small-scale licence are those in which there are geologically significant deposits – because more money can be earnt more quickly.

However, these are also the environments that are likely to attract surges of migrant workers in search of quick wins; the geological potential is highlighted by AM success. High interest almost invariably indicates a potentially sizable deposit and may attract the attention of larger scale prospectors.

Unfortunately for aspiring SSM applicants the previously referenced 2013 regulation gives precedence to large-scale mining applications over applications for SSM licences in cases like this. Therefore, even where AMs overcome the odds and satisfy the conditions to upgrade to SSM licences, the present legal and regulatory framework leaves them open the possibility of being usurped, or “pipped to the post”.

First-hand frustrations: Loss of land

Our mine site visit in Tigray to conduct a needs assessment of artisanal gold miners brought to light these tensions. It was clear from the off that this site held geological potential – the return was twice that of other sites visited in the region and the artisanal producers were doing well, all things considered. One of the cooperatives surveyed even had plans to lodge an SSM application. The omens seemed good.

The artisanal mine site

However, a cloud was hanging over what appeared to be optimum conditions for small-scale mining to flourish. Access to the site was made possible by a gravel road that we assumed to have been constructed with outside investment. Later this was confirmed by a protesting elderly member of the community, who stopped our vehicle by laying thorny branches from a nearby tree to block our exit from the site along said road.

Once we had stopped the vehicle she demanded compensation for the road that she claimed had dug through her land – of course, she had confused us for the prospecting firm that had been granted a licence to explore the gold deposits in the area. She had a right to be angry.

In this scenario, an application from the prospecting company to start extraction would have been given precedence by all other mining applications laying a claim to the deposits; including incumbent mining operations on the site seeking to obtain SSM status. This point strikes at the heart of the debate on whether or not small-scale production can play a role in pro-poor development and the alleviation of poverty, a debate that raged at the recent AMDC meeting in March in Addis.

Needs Assessment Consultation with the miners

The importance of artisanal mining

How can artisanal miners be expected to invest, save and upscale their production, with all of the risk that this entails, without the guarantees provided by a legal system that views their role in the development of the country as equal to larger enterprises?

AM is primarily a poverty-driven activity but it is also, importantly, a business and a livelihood. The potential it holds for rural, broad-based development is correspondingly enormous. In some countries, AM and SSM outcompete LSM in terms of production and contribution to foreign exchange. In Rwanda, small-scale production predominates and is best suited to the nature of the country’s deposits; elsewhere it can be a significant contributor to a country’s mineral exports (Mali, Guinea, DRC, the list goes on).

ASM should, therefore, be taken seriously by policy makers and legislators alike; it is in the interests of both the miners and their governments.

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