Building a sustainable future for African mining.


Digging a living from the rocks

According to the ISG report, in Africa today, artisanal and small-scale mining (ASM) directly employs over 8m workers who, in turn, support over 45m dependents. It also makes a significant contribution to global mineral extraction; worldwide, 5% of gold and 25% of tin is won through ASM. That's why ASM has become integral to the economies of many mining countries in the developing world. In fact, in rural and remote areas, ASM is often the only way of making a living outside of agriculture.

However, there are many challenges that prevent ASM from contributing to development in a more meaningful way. The ISG report argues that most of these problems revolve around difficulties raising capital to finance larger-scale operations. Without sufficient capital, ASM is condemned to remain a small-time operation. So how does ASM find itself 'stuck in a hole and unable to get out'?

One reason is that most countries lack policy frameworks that are flexible enough to accommodate ASM. For example, the process of applying for mining rights usually favours large companies to such an extent that small mines frequently operate without proper tenure. Lack of land rights can cause conflict with other landowners and even other miners, but more critically, without assured mineral rights to borrow against, small-scale miners find it almost impossible to raise the capital to invest.

Secondly, usually mines carry out initial exploration feasibility studies. These can be costly. However without access to capital, ASM cannot afford to get involved in these preliminary stages. This has a knock-on effect; if ore reserves have not been quantified, it becomes impossible to develop the kind of strong business plan that's needed to borrow money to mine on an industrial scale.

ASM operators thus have to operate outside formal financing institutions and so rapidly fall prey to predatory mineral traders. Many artisanal miners have no option but resort to middlemen or 'supporters', who sponsor their mining operations but only pay low prices. ASM workers thus become caught in a poverty trap with no escape.

Worse still, the informal, unregulated nature of much ASM makes it an easy victim of organised crime and paramilitary operations, especially in high value minerals like diamonds, gold and coltan.

Of course, various tracking and certification schemes have been introduced regionally (e.g. the Lusaka Declaration) and internationally (such as the...

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