Defining that which does not want to be defined:

Artisanal and Small-scale Mining

Leon Gerber

International Comparative Mineral Law

10 November 2011 © Leonardus Gerber 1

Outline

1. Defining ASM

2. Identifying the primary concerns

3. Obstacles to formal regulation

4. Addressing the concerns

5. Further reading

http://practicalaction.org

2 © Leonardus Gerber

1. Defining ASM

What is ASM and why is it a problem?

Flexible nature of ASM makes it notoriously difficult to define

Different countries, different definitions – depth, infrastructure, numbers etc.

Some distinction between ‘artisanal’ and ‘small-scale’ – generally considered mutually inclusive

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Ghana "small-scale gold mining operations" means the mining of gold by a method not involving substantial expenditure

by an individual or group of persons not exceeding nine in number or by a co-operative society made up of ten or

more persons.

Article 21, Small-scale Gold Mining Act, 1989

Uganda "small-scale operations" means prospecting or mining operations which do not involve expenditure in excess of

five hundred currency points or the use of

specialised technology.

Article 2, The Mining Act, 2003

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1. Defining ASM (cont.)

Traditional ASM

Characteristics:

Communities have ready access

Replaces other grassroots activities

Family trait?

Development out of own accord

Difficulties:

Consider extraction a right

LSM concessions an infringement

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1. Defining ASM (cont.)

Seasonal ASM

Characteristics:

Secondary means of livelihood

Individuals/group migration

Means of offsetting risk

Difficulties:

Migratory nature makes engagement difficult

Regulation hampered by changing jurisdiction

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1. Defining ASM (cont.)

Permanent co-habitation

Characteristics:

Often develops in proximity to LSM

Recovery operations / abandoned areas

Regular influx of miners whom might settle

Outlive LSM operations?

Difficulties:

Mostly potential for illegal activities – trespassing, infringement of rights, theft, damage etc.

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1. Defining ASM (cont.)

Shock ASM

Characteristics:

Sudden changes in economic / geographical factors

• large scale economic collapse, unemployment, retrenchment

• Natural disasters, continued draught

Can be temporary for duration of factors

May develop into complete substitute

Difficulties:

Similar to Influx

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1. Defining ASM (cont.)

Influx ASM

Characteristics:

Sudden establishment of ASM due to discovery

Contrast with shock ASM – absence of external economic / geographical factors

Gold Rushes – Australia, South Africa, Brazil

Miners might work together for specific buyer or pursue individual extraction

Difficulties:

Considerable concern to governments – large numbers vs small area

Overwhelming of existing capacity for service delivery & infrastructure

Difficult to engage & monitor – first stage of mining, disorganised

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1. Defining ASM (cont.)

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Phases in ASM

Rush Operational Decline

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Time © Leonardus Gerber

1. Defining ASM (cont.)

Importance of phases

Engagement with ASM dependent on phase

Rush:

Lack of coordination between AS Miners

Need for LSM to engage?

Declination:

Little incentive to conform to compliance – short term benefits

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1. Defining ASM (cont.)

So what is ASM?!

Common characteristics:

Regardless of variation in size operates outside of traditional legal corporate structures

Resources extracted includes all but most difficult – tendency towards precious stones, gold & coal

Methods and processes – manual labour, rudimentary equipment, low/no capital input

Typically operate on fringes of law – when not subject to formalisation, exclusion per implication vs inclusion in broad legislation

Significant presence in developing countries – 13-20 mill, 100 mill

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1. Defining ASM (cont.)

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Definition

Extraction activities that tend to be subsistence based,

technologically, mechanically and capital poor, although containing a

large labour-intensive element, and which often operates on the

border of the law

© Leonardus Gerber

ASM (cont.)

http://www.ghana-mining.org 13

2. Identifying the primary concerns

Majority of ASM illegal – more than 50% in some countries

Criminal element debate – legality issue

Must be recognised before it can be regulated

Prohibition against engagement?

Continued growth of ASM expected given high mineral commodity prices

Governments do not recognise ASM as an economic sector

Biased towards development of large scale mining

ASM either ignored or stifled

Lack of trust in authority, especially in the case of subsistence miners

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© Leonardus Gerber

2. Primary concerns (cont.)

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Low savings potential

Inability to invest in tools and equipment

Inability to meet H&S standards

Low productivity

Low returns

Low revenue from mining

The effects of a low-income revenue stream of ASM

Adapted from ICMM, Working Together:

How Large-Scale Mining Can Engage

with Artisanal and Small-Scale Miners)

© Leonardus Gerber

3. Obstacles to formal regulation

Interrelated nature of concerns

Lack of resources available to ASM

Opposition from LSM

Lack of state capacity

Lack of political interest

Lacunae identified in existing regulation:

Delineating ASM

No land available for ASM

Regulations are too complex

Implied application in over-arching legislation

Lack of institutional capacity to implement regulations

Regulation may stifle ASM

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4. Addressing the concerns

Specific legislation:

Framework needs to be sound and appropriate

Simple, transparent process

Have to provide for SHE matters in particular

Provision for a single, well-resourced agency to regulate, as well as facilitate

Encourage legal ASM operations, i.e. tax concessions or forgoing royalties

Include community issues via secondary regulations

Various publications exist, but focus on particular aspect of ASM:

African Mining Vision

CASM and World Bank projects (specifically Africa, Asia and China)

DFID: Livelihood and policy studies in Artisanal mining

ICMM: Working Together – How Large-scale mining can engage with ASM miners

ILO Report: Social and Labour Issues in Small-scale Mines

MMSD: Breaking New Ground

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5. Further reading

UNECA, Compendium of Best Practices in Artisanal and Small-Scale Mining, http://www.uneca.org/sdd/Compendium%20on_best_practices_in_%20smallsacle%20.pdf.

Andrews-Speed, P., Zamora, A., Rogers, C.D., Shen, L., Cao, S., and Yang. M. (2002). "A framework for policy formulation for small-scale mines: the case of coal in China," Natural Resources Forum, 26, pp. 43-52.

Communities and artisanal & small-scale mining. A global partnership for action (CASM, 2008) at http://www.artisanalmining.org/userfiles/file/9th%20ACC/10th%20Session/CASMSept10PM_Session9_GotthardWalser_AnnualProgressReport.pdf.

Banchirigah, S.M., How have reforms fuelled the expansion of artisanal mining? Evidence from sub-Saharan Africa, 31 3 Resources Policy (2006) 165.

Certification and Artisanal and Small-scale Mining: An Emerging Opportunity for Sustainable Development (CASM, 2008) at http://www.artisanalmining.org/userfiles/file/casm-fairtrade.pdf.

Ali, S.H., Mining, the Environment, and Indigenous Development Conflicts (Tucson, USA: University of Arizona Press, 2003).

Aryee, B.N.A et al, Trends in the small-scale mining of precious minerals in Ghana: a perspective on its environmental impact, 11 Journal of Cleaner Production (2003) 131.

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5. Further reading (cont.)

Artisanal and Small-Scale Mining (ASM), CommDev, World Bank at http://commdev.org/section/topics/artisanal_mining.

Hentschel, T., et al, Artisanal and Small-Scale Mining: Challenges and Opportunities (MMSD, 2003) at http://commdev.org/content/document/detail/1044/.

AngloGold Ashanti, 2006 Annual Report: AngloGold Ashanti’s approach to artisanal and small-scale mining at http://www.anglogold.co.za/subwebs/informationforinvestors/reporttosociety06/artisanal-mining.htm.

Vlassenroot, K et al (eds.), Artisinal diamond Mining: Perspectives and Challenges (Gent, Belgium: Academia Press, 2008).

Barrick Gold Corporation, Porgera Joint Venture - Illegal Mining at http://www.barrick.com/CorporateResponsibility/KeyTopics/PorgeraJV/IllegalMining/default.aspx.

CASM: Small Stories – 12 Stories about Small-Scale Mining () at http://www.artisanalmining.org/userfiles/file/CASMshortstoriesBooklet_FINAL_low.pdf.

EITI, Advancing the EITI in the Mining Sector: A consultation with stakeholders (2009) at http://eiti.org/files/MINING%20Compressed.pdf.

Hilson, M. (ed), The Socio-Economic Impacts of Artisanal and Small-Scale Mining in Developing Countries (Lisse, The Netherlands: Swets & Zeitlinger, 2003).

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© Leonardus Gerber