How the ASM sector can operate optimally and ensure sustained mine production?

By Motive Mungoni

Artisanal and Small-scale Mining (ASM) is a global phenomenon not unique to Zimbabwe only. It is a vital livelihood widely practiced in over 30 African countries and has been a stimulus of economic growth benefiting mostly the rural and/or marginalised populace where mineral resources are mostly found. ASM is the first step in exploration and frequently provides basic geological information to industrial mining. It also has the ability to allow exploitation of the otherwise uneconomical reserves (marginal ore deposits) and to provide leads to most discoveries of large-scale deposits. It is a way of promoting socio-economic development relatively cheaply and has the potential to contribute towards poverty alleviation especially in the rural areas. The potential to contribute towards poverty alleviation is due to its close linkage with economic and social development, both at the local and national level; its ability to reduce rural-urban migration especially of the unemployed youth; maintaining the link between people and the land. ASM has become an alternative way of earning a living through income generation besides agriculture which has been affected by climate change in recent times. Small-scale mining also encourages entrepreneurship initiatives amongst communities or villages.

However, ASM activities are commonly known for wastage of minerals due to poor ore and mineral recovery during mining and mineral processing. Mining operations are carried out on an informal basis without adhering to the laid down laws and regulations. ASM activities are not organized, lacking work preparation before production and hence the prospecting stage is totally omitted and there is no reserves estimation. This results in low productivity with attendant low returns and revenue due to use of crude implements. In most cases, artisanal miners sell unprocessed to semi-processed minerals at a very low value. These are a few examples of the myriads of problems faced by ASM which have caused sterility or low optimisation of mineral resources causing them to be trapped in a vicious poverty cycle. Is it possible to break this resource curse especially in mineral rich countries such as Zimbabwe and Democratic Republic of Congo (DRC)? How do we leverage on the mineral wealth we have in Zimbabwe taking advantage of the over 1.5 million artisanal and small-scale miners’ population and recent prices increases of mineral commodities?

All over the world, governments and other key stakeholders have adopted the concept of formalization. Formalization is not only legalizing artisanal and illegal mining but professionalizing their operations as a vehicle of promoting technical knowledge application. Besides tremendous benefits realized by artisanal and small-scale miners as a result of this intervention, governments have recorded significant economic growth at Rural District levels due to the massive self-employment effects in these local areas. National economies have also benefited because of the exportable products that come from artisanal and small-scale mining operations which generate the much-needed foreign currency. Thus, the progress made this far can be further entrenched and facilitated by a number of factors and enabling conditions converging for the entrepreneur at the same time. Firstly, encouraging artisanal miners to form cooperatives or syndicates is important because an artisanal miner operating alone has little bargaining power to access finance and is also disadvantaged in negotiations with traders on the market. This affect his or her growth and amount of revenue generated. The advantages of syndicates are collective bargaining and easy resource mobilization.

Linked to the formation of syndicates or cooperatives, proposed solutions to ensure sustained productivity in ASM include:

•           Availability of ground for prospecting

This entails government involvement in identifying and dedicating concessions for ASM and conducting detailed geological evaluation of the concessions through exploration so as to predict, with the greatest accuracy possible, the shape, distribution, and concentration of mineralization.

•           Implementation of unambiguous legal and regulatory frameworks

A well thought and written legal and policy framework creates an environment for ASM growth

•           Emergence of a mentality that allows the miners or entrepreneurs to think of mining as a profession

Capacitation of ASM to grow their mines as business entities and be able to attract both domestic and foreign investment

•           Improved access to knowledge and skills required on running the mine in a business-like fashion

•           Access to market within reasonable proximity to the mine at a fair return

•           Availability and means of procuring appropriate technology of reasonable quality and at reasonable prices

•           Experience the training and development on the proper use and maintenance of equipment

•           Access to enough capital to start, manage, develop, and survive any start-up problems, delays and cyclical nature of commodity prices on the international market

•           Enforceable accountability to debt financiers and equity holders

Furthermore, ASM can take advantage of the huge financial and technical muscles large scale mines have and increase productivity. This can be in the form of technical assistance or mentorship. For ASM operations, mentorship facilitates technology and skills (both entrepreneurship and specialized skills) transfer, at low cost, allows small-scale miners access to working capital, promotes legal, environmental and regulatory requirements compliance, and improves the overall working of ASM due to the adoption of best practice(s). A good example of this includes the Benguet Corporation’s Acupan Contract Mining Project in the Philippines. The company assists ASM gold producers to identify locations to mine, assists them with start-up operations, mine site planning and implementation monitoring. It then buys the ore they produce and sells the final product to the Philippines’ Central Bank. 

In light of the visibly growing conflict between ASM and LSM, many governments have encouraged industrial mines to adopt a policy of tolerance. For example, in Venezuela, the Las Cristina’s mine of the Placer Dome Company has pursued a policy of tolerance for ASGM on their concession. They have engaged in limited formalization assistance and interventions on mercury and safety issues.   In Ghana, Goldfields adopted a ’live and let live’ approach that tolerated ASM as long as the miners did not interfere with the company’s activities.  

Therefore, the process to metamorphize artisanal or informal mining operations into commercially viable entities is possible.  The proposed solutions above are not exhaustive but only a few have been captured. These have been used successfully in many parts of the world to control, monitor and strengthen the informal mining sector.