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Artisanal and Small Scale Mining: Policy Directions

from the AMV

Oliver P. Maponga

3-4 November 2014

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Presentation Objectives

This presentation outlines and discusses the AMV policy directions on strengthening the developmental role of the ASM sector and provides recommendations on how these could be domesticated as part of the CMV.

The presentation will explore the following questions;– What does the AMV say about

ASM? – What is ASM and what role does

it play?– What are the challenges? – What directions on ASM are

provided by the AMV?

AMV View: The ASM challenges in the African

minerals sector

the level/quality of the resource potential data

limited contracts negotiating capacity

limited resources development and governance capacity

limited capacity to manage mineral wealth

infrastructure bottlenecks, and artisanal and small-scale

mining

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AVM Pillars: ASM as one pillar

• Optimizing knowledge and the benefits of finite mineral resources at all levels of mining and for all minerals,

• Harnessing the potential of small-scale mining to improve livelihoods and integration into the rural and national economy,

• Fostering sustainable development principles based on environmentally and socially responsible mining, which is safe and includes communities and all other stakeholders,

• Building human and institution al capacities towards a knowledge economy that supports innovation, research and development,

• Developing a diversified and globally competitive African mineral industry which contributes to broad economic and social growth through the creation of economic linkages,

• Fostering a transparent and accountable mineral sector in which resource rents are optimized and utilized to promote broad economic and social development, and

• Promoting good governance of the mineral sector in which communities and citizens participate in mineral assets and in which there is equity in the distribution

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ASM: Classifications, Definitions, Characteristics– Diverse definitions exist: distinction

between artisanal mining and small scale mining often obscure

– Classification – could be categorised• Legal classification• Global categorisation

– Country-specific definitions as articulated in national policies and legislative frameworks

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Legal classification

– Common methods to define artisanal mining and small-scale mining, based on:• Capital employed, less than $5 million for

SSM• Methods of production, usually reflected in

level of mechanisation permitted• Production capacity sometimes in terms of

throughput, output per worker• Number of workers, less than 50 for SSM

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Global Classification– Formal versus informal ASM• Formal implies ASM practised within legal

boundaries and according to certain norms. • Informal is usually used for ASM which is

practised strictly outside the law but on which is conferred a certain level of legitimacy or acceptance because it is an important livelihood for poor communities

– Legal versus illegal versus extra-legal ASM• Legal – ASM that is practiced within documented

law• Illegal – ASM that is practiced outside the law• Extra-legal – ASM that is practiced outside the

prevailing law, but the regulator or government authorities turn a blind eye

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Diversity

i. Legal – illegal, informal, formal/legal

ii. Seasonality – permanent, seasonal, shock/pull and rush

iii. Demographic – old, children, men, women

iv. Origin – migrant, local

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A Wide Spectrum

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ManualSimple methods

Unlicensed Licensed

Ad Hoc (rush phenomenon)UnsupportedLow capital

inputMigratory

Mainly local ownership

More mechanizedUsually licensed

Planning common

EMP and EMPAccess to some

supportMore capital

input

ASM Spectrum

Artisanal Small Scale

Transition……….

ASM: Magnitude and Importance

Country ASM Miners

ASM Communi

tyBurkina Faso

200 000 1 000 000

Cote d’Ivoire

100 000 600 000

Ghana 1 100 000 4 400 000

Guinea 300 000 1 500 000

Liberia 100 000 600 000

Mali 400 000 2 400 000

Niger 450 000 2 700 000

Nigeria 500 000 2 500 000

Sierra Leone

300 000 1 800 000

Mozambique

100 000 1 200 000

Tanzania 1 500 000 9 000 000

CAR 400 000 2 400 000

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[1]

ILO estimates

ASM provides 13 to 20 million jobs worldwide

Provides livelihood support to 80 to 100 million people

10% of the miners are children

50% of the miners are women

Prevalent in about 80 countries worldwide

UNEP (2013)

90% of employment in gold sector worldwide is in ASM

Minerals and Africa’s Development (2011)

ASM: Contribution to Mineral Production

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Coloured Gems

Cobalt

Cassiterite (Tin)

Diamonds

Coltan

Gold

Silver

Tungsten

Iron Ore

Lead

Zinc

Copper

0 10 20 30 40 50 60 70 80 90

World Share% Source: Estelle Levin Ltd. (2012)

In Tanzania -60% of ASM miners are in gold, 25% building materials, 10% in gemstones, copper ore, salt and industrial minerals (5%)

In Uganda 45% miners are women, ASM produce 90% of minerals, dependency ratio 1:6, 95% ASM unlicensed

ASM Characteristics: The Vices and Challenges

Negative environmental impacts, e.g. mercury contamination, deforestation, siltation, unreclaimed mine sites

Child labour and gender inequality challenges Low productivity, limited capital resources, Non-decent employment, poor working

conditions; Illicit trade and linked to conflict; Inadequate and inappropriate technology; Adverse health & safety impacts, - poor hygiene

and sanitation, exposure to mercury, dust and other hazards;

Limited capacity to adhere to laws, to enforce laws

Markets and marketing challenges; Criminality often associated within the sector

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ASM Perpetual Cycles of Poverty

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Low recovery Low productivity

Low levels of technology and poor geo-prospecting

Unskilled miners, labour and inability to invest

Poor large numbers of miners exploring/exploiting

unknown resources

Poverty exacerbation

Environmental damage, deteriorated quality of life and health

Low income

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ASM Support: The Golden Triangle

Artisanal and Small Scale

Mining Operations

Technology

FinanceMarkets

and Marketing

Transforming ASM to Sustainable Livelihoods

Skills, education access to finance & markets, technology.

Skills, education, access to

finance markets, technology,

policy etc.

INFORMAL /ILLEGAL ASM

SUSTAINABLE LIVELIHOODS

FORMAL ASM

Form

alisa

tion Le

gal, v

iable,

safe

r,

envir

onm

enta

lly re

spon

sible,

desc

ent w

ork

Sustainable Livelihoods Elements

People focusedMacro/micro linkagesStrengthening ownershipWide participationCapacity strengthening

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Options for Breaking the ASM Poverty Cycle

Large numbers of miners chasing

limited resources

Inadequate & inappropriate

technology

Low income & lack of

investment opportunities

Environmental degradation

Low Productivity

Financial assistance

Technical assistance

Alternative

livelihoods

Regulation

Financial assistance Technical assistance Alternative livelihoods

Technical assistance Alternative livelihoods EIA &EMP strategies

Rehabilitation Alternative livelihoods

Technical assistance Alternative livelihoods

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The Golden Triangle in Tanzania

Legislative– Security of tenure– 5 to 7 years permits (PML)– SSM for locals

Administrative– SSM section within Ministry– Granting of PML

Extension Services– Provided along MVC, demarcation of areas– SSM manuals, brochures– Demonstration units, technology facilitation

Finance – Loan scheme, feasibility studies17

Supported by

development partner resources

Support to the ASM value chain

EXPLORATION

MINING

PROCESSING

BENEFICIATION AND

VALUE ADDING

MARKETING

Safer

Deposit ID & evaluation

Ore Extraction Ore Processing Refining/Finished product

Markets

ENVIRONMENT HEALTH SAFETY SOCIALLEGAL

Reduce impacts Protect health Better lives, higher

incomes

Compliance

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Strengthening the Developmental Role of ASMDevelopment Goal – Increased income for the ASM sector leading to improved livelihoods of rural communitiesA poorly regulated sector, often with illicit activitiesSubsistent operations and non-commercially viablePoor technical skills and technologyPoor environmental and social management

Upgrade sector knowledge, skills and technologiesDevelop programmes to improve viability of operationsEmbed ASM into national development strategy , local and rural economy

A viable sector contributing to local and national economyStrengthened skills and capacities of operatorsReduced negative environmental, health and welfare impacts ASM19

ASM Policy Directions

The overall objective is to harness the potential of artisanal and small scale mining to advance integrated and sustainable rural socio-economic development

Actions – national level Regularise ASM and mainstream into broader

development plans, Introduce technical support programmes to upgrade skills

and capacity, Local value chains, local content – local

auctioning of gemstones Partnership models – cooperative

models/community programmes Financing and marketing methods

Develop frameworks to encourage partnerships with LSM – mentorship, subcontracting

Implement guidelines against child labour, Develop codes, standards, laws for sustainable ASM, Adopt measures against illicit trade in minerals, Designate specific areas for ASM and support the

activities, Promote value addition and mineral beneficiation Decentralize support to the sector

ASM Policy Directions

Actions: Regional level (REC and AU)

Harmonise ASM policies, laws, regulations, standards Coordinate and facilitate technology and skills

development – centres of exellency in technology and skills development – sharing of capacities, experiences

Adoption of measures to address illicit trade in minerals – regional minerals security frameworks – ICGLR, for example

Adoption of standard certification of ASM products – finger printing

Development of continental policies, protocols, regulations, codes and standards to promote sustainable ASM

Links the sector to regional and national development

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Policy Framework for ASM: Zambia

To develop the small scale mining sub sector the Zambian Government will undertake the following

•  Encourage use of appropriate, affordable and safe technology, by increasing its support to the collation and dissemination of information about appropriate technologies, the provision of extension services and technology demonstrations;

• Build capacity in regional mining offices to enhance their service delivery;

• Collaborate with small scale miners associations;• Disseminate information to raise awareness on occupational

safety, health and environmental risks, and provide occupational health and safety guidelines for SSM;

• Improve the system of information flow for the mining sector to sensitize and create awareness, especially for ASM and rural populations, on the opportunities present and the regulations governing the sector;

• Facilitate SSM access to finance for the development of the sub sector

• Source: Zambia Mineral Resources Development Policy (2013)

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Article 1.2: Vision: harness mineral resource capital to facilitate sustainable economic growth and integrated socio-economic development in the region

Article 1.3 Objectives, Specific Objective 2© regulation and development of ASM

• Develop specific institutional and legislative frameworks.

• Encourage the formation of cooperatives in the sub-sector.

• Provide of technical and financial assistance;• Enhance technical capacity through formation of

professional organisations.• Develop training curricula and good practices

relevant to the social context and supported by technology transfers.

• Promote the harmonious co-existence with LSM;• Encourage the establishment of a coordinated

system of licensed Mineral Buying Centres/Agencies in the Community

• . Develop a sustainable Artisanal and Small-scale Mining Sector.

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ASM Policy Directions: EMDP

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AMV Policy Directions on ASM to Country Level

• AMV Domestication: to create AMV-compliant policies – first step, Country Mining Vision – multi-stakeholder platform

• Pro-active state apparatus: Role of the state critical in nurturing the sector – infant industry argument type of support – golden triangle requires conscious state support – – Technological (equipment hire schemes, etc) – Financial (venture capital funds, revolving funds

models)– Markets and marketing – participation in the local

MVC• Creation of Requisite Governance Framework:

specific state mechanisms and capacity dealing with ASM beyond formalisation – deal with structural and legal issues – working conditions, health, child labour, other economic activities

• National and Regional cooperation: in technology development, research, technical standards, financial resources – centres of excellence,

From AMV to Regional and National ASM Policy Directions

National Policy Framework or

Country Mining Vision

Regional Policy Frameworks

ECOWAS, SADC, EAC

Africa Mining Vision

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Thanks for the Attention

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