Sustainable artisanal mining — Why perceptions matter

Narratives vary widely on the realities of artisanal mining (ASM), which impact the approaches used by various stakeholders to engage with the sector. At a basic level, ASM is highly diverse, including 45 million artisanal miners who work across close to 100 countries. Including their families, 225 million individuals are fully supported by ASM, 2.5% of our global population. Miners produce 20% of the world’s gold, 80% of sapphires, 10% of cobalt, 5% of copper, and meaningful quantities of many other precious metals and critical minerals. A challenge that the ASM sector faces is that there are widely divergent beliefs on its nature and realities. These beliefs inform how investors, regulatory authorities, large miners, civil society and downstream customers choose to interact with artisanal mining.

Perceptions in developed countries

People in developed countries are not generally aware that ASM even exists, and certainly have no sense of its scale. Insofar as awareness exists, most people see artisanal mining as something that needs to stop. Recognizing that 85% of these miners operate informally, narratives proliferate that ASM is fundamentally illegal, with distinctions between traditional miners who are extensions of nearby communities and truly illegal corrupt miners not being well understood. The sector is associated with child labor, environmental degradation, smuggling and money laundering.  

Large mining companies that tend to have head offices in countries like Canada, Australia, the UK and Switzerland often think about artisanal miners as a threat – individuals who are squatting on large project land concessions, creating legal, PR and conflict risks given relationships that are often tense. The perspective of large mining companies tends to filter into broader perspectives in developed countries, inhibiting collaborative engagement that is necessary for improving outcomes.

Downstream customers – automotive OEM’s, jewellery companies, cell phone manufacturers and beyond – can also see artisanal mining as a threat, given potential brand impacts that result from supply chains that include minerals that were not responsibly mined. A tendency to want to distance from ASM given brand risks further immiserates miners on the ground as exclusionary policies result, while also reinforcing perceptions in developed countries around lack of responsibility.

What about perceptions in countries where ASM is found?

The sector is seen as being a major source of employment given the 45 million people who work in the sector.  People in relatively underdeveloped countries where ASM is prominent understand that the sector has a wide reach – including families, 225 million people are fully supported by ASM, and the World Bank estimates that a further 139-278 million people sell food, clothing, shelter and equipment to these miners.  All in, 6% of the global population is fully or significantly supported by artisanal mining, which is concentrated in the countries where the sector is found.  

Underdeveloped countries understand that ASM can also catalyze broader economic development.  Whether taxes, local processing, or engagement with local suppliers, countries understand that ‘formalization’ of ASM, transitioning to stable predictable equitable business relationships, can be a trigger for meaningful sustainable development. Details around what formalizing ASM, which includes professionalizing and legitimizing, looks like will be discussed later in this article. The social and environmental issues associated with ASM are of course understood in places where ASM happens, and it is largely understood that formalization can improve outcomes on a variety of these issues that range from child labor through to mercury pollution.

What about investors?

Mining and impact investment is faced with multiple conflicting narratives around what ASM looks like, how outcomes can be improved and what the risks are of financing the sector. The bottom line is that investors do not understand the sector, seeing it as opaque and risky. Largely informal miners lack a common ‘language’ with investors that is necessary for dialogue and investor decision making, further exacerbating investor concerns given barriers to entry that lack of transparent dialogue amounts to.  Not understanding the sector is a direct line to not capitalizing the sector, which is why ASM is bereft to non-predatory capital access.

What about the miners themselves?

The sector isn’t just seen as a source of employment, it is often seen as the best or only option for many people.  Employment gravitates to ASM because ASM is the best choice in other words.  As with people everywhere, artisanal miners want to increase the dignity of work and to deliver opportunities for themselves that improve their lives and the lives of their families.  Of course miners understand the issues and challenges in the sector, but as business persons, they look for and try to capitalize on opportunities to improve their lives.  Miners also understand that the sector is inherently diverse – 30% female, 50% female in Africa, reflective of local ethnic and religious compositions, and mirroring local socio-economic realities.  Recognizing this diversity, it is also important to say that some groups face more significant barriers then others – 30% of miners may be women, but women face barriers to ownership and to the best jobs in the sector that men don’t face, an impediment to development.

The bottom line?

ASM is large, diverse and economically significant. Diverse perceptions that often don’t reflect realities on the ground are a barrier for targeted engagement that makes sense given specific cultural and business contexts that vary place by place. Engagement approaches and solution designs need to reflect this inherent diversity, where voices of miners and local realities are central.

Where to from here?

Multi-pronged approaches can fundamentally reimagine outcomes in artisanal mining, targeting specifics across different places and reflecting voices of miners and the communities that neighbor mining.

1. Legitimization – artisanal mining is here to stay, involving tens of millions of people. From a regulatory perspective, encouraging formalization where ASM is considered legal, is table stakes.  More broadly, aligning legal frameworks toward long term value as an enabler of sustainable development and local beneficiation, positions opportunities for value. By contrast, seeing ASM as a tax ‘grab’ opportunity gets in the way of success – why would miners be receptive to formalization if it taxes them without improving their lives.

2. Professionalization – the dignity and productivity of work is enhanced when miners are transitioned into coops, companies or associations, apt governance from where capacity can be developed.  Once miners are formally organized, productivity gains occur as miners are equipped, trained and shifted to good practices. Lastly, value chains can be improved as professionalization sets in, replacing potentially predatory intermediates with credible business partners. Solutions involved in professionalizing miners needs to reflect local realities, the voices of miners, meaning that flexible frameworks need to be used that engage miners in the context of local culture, beliefs and prevailing business practices as they are transitioned toward more business-like approaches

3. Access to Capital – professionalization requires investment, which means that non-predatory capital access is a prerequisite to success. Miners and investors lack a common ‘language’ that allows investors to transparently understand realities and to make choices around their capital.  Regulatory frameworks that open the door for international capital, including blended finance approaches, supports enhanced access to capital. The Blended Capital Group and Capitals Hub Canada are standing up a digital marketplace that will democratize access to capital for miners as blockchain-based solutions, asset classes and KPI’s increase transparency. At-scale capital is essential for scaled professionalization, making the kind of solution inherent in this digital marketplace key for changing outcomes across the sector.

4. Responsible Standards, Practices and Investor Expectations – artisanal miners often co-habit land with large scale projects. Clarity on standards and practices that outline what responsible collaboration looks like helps position relationships for success. Similarly, clear investor requirements support improved interactions and transparency as good practices replace potential conflict with collaborative productivity. The standards convergence work of ICMM, the Mining Association of Canada, Copper Mark and the World Gold council is an important opportunity for defining strong standards and practices, while the UN Mining2030 Investor Commission is important for laying out investor expectations

In summary

Artisanal mining is large and highly diverse. Improved understanding based on genuine narratives in countries where ASM happens is critical for targeting local and multi-national approaches that are geared to reimagining financial, social, environmental and economic outcomes. Investment is a critical prerequisite for success, which means that narratives around what ASM looks like also need to be codified in ways that facilitate miner-investor dialogues, making it easier for investors to make choices based on transparent realities. With 6% of the global population directly or indirectly dependent on ASM and with increasing need for critical minerals along with continuing strong demand for precious metals, it is clearly time to focus on this sub-sector and to deliver its potential in terms of improving lives, economies and global supply positions.

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