Artisanal mining professionalisation – a strategic approach for increased production

Copper is the new gold. With demand driven by the energy transition, AI/tech and growing global populations, statistics that routinely describe the challenge of meeting copper demand are alarming.  Wood Mackenzie has estimated that $23 billion of net new yearly investment is required for aligning mining capacity with looming supply requirements over the next 30 years. Put simply, we need to mine as much copper in the next 50 years as we have over the last 5,000 years.

Supply outlooks are fundamentally misaligned with demand projections, creating a looming gap that threatens energy, economic and even military security, given the diverse applications of copper.

Peru is the second largest copper producing country, well behind Chile, while being slightly ahead of the DRC. Production has been historically impacted and continues to be impacted by anti-mining sentiments that are partially stoked by conflicts between large-scale and artisanal miners.

Using Peru as an example, this paper describes the relationship between professionalization of artisanal mining and increasing overall production in mining ecosystems. Recognizing that investment is a catalyst for this professionalization, this paper will specifically detail differing approaches to investment and how at-scale capital can fundamentally reimagine artisanal mining in ways that deliver a step-change in production.

Examples of conflict in Peru

Along with some of the world’s largest copper mines, there are 300,000-500,000 artisanal miners in Peru, often sharing land concessions with large projects. Lack of collaboration has resulted in adversarial relationships over time that are often disruptive and that periodically turn violent.

• Las Bambas – land is shared between the large mine and artisanal miners who extend from the nearby community of Pamputa. Without a framework for cooperation, the project has been a focus of conflict for many years, including hundreds of days of blockades that have disruption production and shipments from Las Bambas, as well as from other nearby large mines like Glencore’s Antapaccay and Hudbay’s Constancia

• Tia Maria (Southern Copper Corporation) – as with Las Bambas, land is shared on the Tia Maria site.  The company has seen artisanal miners as being fundamentally illegal, arguing that their permits are non-compliant and pushing to remove them from the site. Conflict has been ongoing, including a fire that the miners’ association president attributed to ‘resentment’ over lawsuits that destroyed Southern Copper’s local headquarters

• Calpa Mine (Arequipa’s Atico District) – inherently shared land has also resulted in conflict between rival artisanal mining groups.  In 2022, active conflict at the Calpa site resulted in 14 deaths and 31 arrests

• Various regional protests/blockades – the country has not been successful in formalizing artisanal miners.  Even as there have been several attempts, 85%+ of miners are currently informal. This results in endemic conflict due to resentment toward large-scale mines and the government. A recent instance was in July 2025, when large blockades by miners who were demanding extensions of temporary permits blocked the flow of production from many large mines in the north of the country

What is in common across these various conflicts is how shared land, informality and unrecognized rights for artisanal miners have combined into a conflict that impacts people while destroying value.  Professionalization, which will be discussed in the next section, improves lives and productivity directly, but significantly, it also positions collaboration between large-scale and artisanal miners that de-risks overall mining regions.

Artisanal mining professionalization – what/how

Estelle Levin, founder of Levin Sources and a recognized global expert on artisanal mining, defines formalization as ‘the transition toward organized and professionalized systems of production in and through which responsible business conduct and sustainable development are more feasible and desirable, and thus more likely.’

Formalization itself involves transitions to formal economies, where cooperatives, companies or associations are involved, and where formal land rights codify the participation of artisanal miners in the economy. To a real degree, formalization is the basis of governance, where organized miners participate in formal economies in legally defined ways.

Professionalization, which Estelle’s definition focuses on, goes far beyond mere inclusion in legalized formal economies.  Transitions to predictable, stable equitable business relationships and practices are core to the concept of professionalization. Key features that outline what this looks like include:

1. Governance – cooperatives, companies or associations that support the definition and sustainment of standard measured controlled business practices that make sense from the perspective of miners and that integrate with the broader business ecosystem of mining regions

2. Transformed value chains – transitions to fair and formal arrangements with intermediates and/or offtakers that replace smuggling and predatory intermediates. Fair pricing and integration into formal economies in lieu of legacy smuggling are natural goals of value chain transformations

3. Transformed production – equipment and good practices directly contribute toward increased productivity and value. Capacity development, governance and access to capital all combine to integrate fit for purpose equipment and improved practices for artisanal miners that improve safety, productivity, relationships with suppliers and customers and ecological outcomes

4. Access to capital – investment is a prerequisite for professionalization. Approaches to attracting non-predatory investment will be discussed later in this paper

Professionalizing miners requires cross-stakeholder collaboration. Governance through improved practices and value chains, of course, needs to make sense to miners themselves; otherwise, they would not choose to participate in the process. Building trust and ensuring that the voices of miners are central to designed solutions is key to enabling buy-in. Recognizing history, where artisanal miners have often been mistreated, and contrasting this history with future looking professionalized solutions supports building trust.

Along with miners themselves, a variety of stakeholders need to be aligned on professionalization paths:

1. Large-scale mining projects – if ASM shares land concessions with large-scale projects, collaboration and alignment on what future state governance, shared use of land, potentially shared labor and offtake schemes look like is table stakes for delivering solutions that reflect broad mining ecosystems

2. Governments – local, state and federal government laws and policies need to align with and actively support professionalization protocols. Laws and policies also need to make practical sense to artisanal miners, focused on development support and increased value, not on taxation or bureaucratic land rights requirements

3. Various other stakeholders that include value chain players, upstream suppliers, downstream customers and other sectors like agriculture that miners inherently share land with, need to be considered and aligned in solution design

In the case of Peru, a history of LSM-ASM conflict speaks to a lack of alignment on what professionalization looks like. Large-scale projects may not want artisanal miners to share their land concessions, and laws and public policies may not have supported professionalization paths over time, but success doesn’t just require alignment; it requires recognition that the 300-500K artisanal miners who operate in the country are simply facts who are here to stay.

Business cases can reflect strong value propositions for professionalizing ASM when alignment is in play, something that is essential for investor engagement. More to come on what that looks like.

Impacts on productivity

ASM professionalization increases productivity in multiple ways.

First, the production of actual miners is multiplied. Remembering that informal miners who lack access to non-predatory capital are largely unequipped and are not consistently using good practices, the very acts of equipping, increasing capacity and shifting towards good practices multiply productivity. The extent of this productivity shift varies, but it is significant, sometimes doubling and other times multiplying by 3X, 4X or even 5X. Transitions to effectively governed co-ops, companies, or associations support sustaining these productivity gains, as mechanisms to target good practices and to reduce vulnerability from external bad actors are driven into the processes used by miners.

Along with direct productivity gains, collaboration between large-scale and artisanal miners de-risks the kinds of conflicts that erode productivity in large mines. The Peruvian examples at projects like Las Bambas and Tia Maria speak for themselves, where active conflict and blockades have historically created major disruptions. As relationships transition from conflict through to collaboration, these conflict risks on productivity are removed, and LSM productivity can be further increased through shared labor. With artisanal miners often being extensions of nearby communities, collaboration supports earned social license with these communities, which also accelerates paths to production for large-scale projects. Lastly, ASM is also an early indicator for large-scale exploration, much of the time, where the very existence of artisanal miners is a clue for large-scale mining exploration. A collaborative mindset can meaningfully increase the effectiveness of this work.

Timelines for productivity gains that professionalization delivers are important to remember as well.  Even as it takes 15-20 years to operationalize a large copper project, an artisanal mining coop can be professionalized in 18-24 months, a fraction of the time. This, of course, means that production increases take hold quickly.  Along with this, when large mining projects collaborate with ASM, the de-risking of large projects happens quickly as trust is earned. The kind of productivity-sapping conflict that Las Bambas or Tia Maria have known shifts to collaboration as professionalization starts to mature, compounding the tonnage growth in ASM with potentially significant tonnage growth in LSM.

Approaches to financing – investment is a prerequisite

Trust and transparency are fundamental for investors who need to understand risk and opportunity profiles. A common ‘language’ between miners and investors is required in order to facilitate informed investment decisions that deliver financing. The concept of an investment marketplace, grounded in asset classes, validation regimes and financial instruments that are delivered through good practices, is essential for catalyzing the scaled capital that is needed for at-scale ASM professionalization.

Veridicor is leveraging bond best practices toward the deployment of Stakeholder Prosperity Bonds.  These bonds, integrating fixed income best practices and standard protocols, will deliver programs that center around artisanal mining professionalization, while integrating targeted opportunities for large-scale mining as well as the development of regional infrastructure like roads, water and power systems.  Put simply, a mining region's focus is in play where bond financing improves the lives of small-scale miners while de-risking large-scale miners and setting the ground for increased sustainable development, given the combination of enhanced infrastructure and stable, predictable equitable business relationships driven through professionalization. In the Peruvian context, recognizing endemic conflict over time, significant numbers of artisanal miners, and shared land with large-scale projects, this simply makes sense.  

The ‘stakeholder’ aspect of these bonds speaks to alignment as well as sentiment validation. In order to catalyze broad regional programs, alignment that includes artisanal and large-scale miners, communities, local and regional government and other relevant players is essential – programs themselves span scopes that affect various players, all of whom need to be on board in order to go forward successfully.

The global sustainability bond market is $1Trillion on an annual basis. Mining has barely begun to participate at this stage. Recognizing co-mingled ASM/LSM relationships and clear opportunities to improve lives while delivering increased tonnage, there is a large market opportunity for these Stakeholder Prosperity Bonds, which will individually be in the +/-$100Million range.

Traditional good practices for bond issuance are fit for the purpose of these bonds, as is blockchain-based tokenization through digital service providers. The good practices that are essential relate to alignment, trust and transparency that go in and beyond clearly defined asset classes and value propositions. A credit orientation that is forward-looking is also essential, recognizing that artisanal miners often do not have balance sheets today, but will as a result of programs capitalized through these bonds.

A variety of other financial instruments are potentially relevant for artisanal mining professionalization.  For instance, the notion of loans that are collateralized through unmined reserves, where future mining will be the basis of repayment as minerals are sold. As a marketplace fit for ASM matures, it will be important to explore this and other alternatives, but what is clear at the moment is the fit of Stakeholder Prosperity Bonds, given the nature of ASM.

Mining as a whole is undercapitalized, with sufficient investment not being delivered to fund critical minerals growth that is needed for alignment supply capacity with demand projections. In the artisanal mining sub-sector, this situation is worse, given artisanal miners who have historically been starved of access to non-predatory capital, resulting in arrangements where miners only recognize less than 15% of the value of what they mine, as financers absorb almost the entire value. Bridging this gap through Stakeholder Prosperity Bonds and other financial instruments that will mature over time sets the ground for significantly increased productivity and improved lives, a prerequisite for delivering on the potential of both ASM and LSM.

In summary

Peru is a microcosm that highlights how artisanal mining is strategic for increasing the capacity of the critical minerals that the world requires. The country is resource-rich, with some of the largest copper mines on earth, combined with a large number of artisanal miners who share land with LSMs. Endemic conflict has been the result of adversarial relationships between these mining sub-sectors, limiting the productivity of artisanal miners while putting large mining project productivity at risk.

Professionalization is paradigm changing in this context. Transitioning artisanal miners toward stable, predictable equitable business relationships increased productivity directly. Fit for purpose equipment, good practices and consistent fair relationships with suppliers and customers set the ground for growth.  At the same time, shifting from conflict toward collaboration with the large projects that artisanal miners share land with de-risks the kind of productivity-destroying conflict that projects like Tia Maria and Las Bambas have seen over the course of time. In essence, a collaborative mining region can result, one where joint productivity through exploration, operations and shared labor can result.

Access to non-predatory capital has been an ongoing barrier for the professionalization of ASM.  Recognizing the urgent need to increase critical minerals production and the increased visibility on the realities of ASM, including conflicted realities between ASM and LSM, it is now clear that mechanisms for delivering at-scale capital through financial instruments that make sense for both investors and miners are urgently needed. Veridicor’s Stakeholder Prosperity Bonds are a fit in this context, facilitating easy-to-understand trust and transparency between investors and miners that is needed for investment decisions.

Whether thinking about Peru’s 300-500K artisanal miners, or the 45M people who work in artisanal mining globally, the bottom line is that the sector is here to stay, not just a significant source of employment but a tremendous opportunity for productivity. As governments, investors and mining associations hone focus on ASM, it is inevitable that gaps in investment access will be resolved, so that lives are improved, sustainable development is catalyzed, and production capacity is increased for minerals like copper that would otherwise see increased supply shortfalls in the medium and long terms.

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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