Artisanal and small-scale mining in developing countries by pengxiuhui


									1. Facts about ASM
Artisanal and small-scale mining in
developing countries

Kleinbergbau in Entwicklungsländern
Vorlesung: F. Hruschka, MU-Leoben, 2011
„Small-scale“ … 

                … no, it is not about reducing „scale“ 
     Small-scale, artisanal and subsistence mining

       Large-scale mining             Small-scale mining

                            Not ASM

Artisanal mining
                                           Artisanal subsistence mining
What is artisanal and small-scale mining?

   Part of the „extractive industries“ or „mining
    industry“ – but not „industrial“ in common
    understanding of the term „industry“
    „Industry“ definitions:
      a.   systematic labor especially for some useful purpose or the creation
           of something of value (YES – mining)
      b.   a department or branch of a craft, art, business, or manufacture;
           especially : one that employs a large personnel and capital
           especially in manufacturing (NO – especially not large capital)
      c.   a distinct group of productive or profit-making enterprises
      d.   manufacturing activity as a whole (YES – “extractive industries”)

                                                              (Merriam Webster Dictionary)
Small-scale can be large
   Size matters!

            Not ASM
10 km

                      100 m
Size matters!
Parameters used to „define“ ASM

   Production volume                           Each parameter has its advantages
                                                and difficulties depending on the
   Number of persons per                       country, the type of mining, the
    productive unit                             minerals produced, political
   Intensity (volume) of capital               conditions, etc., in each country.
    employed                                    Until now a global, common
   Labor productivity                          definition of the term ASM
   Size of mine claim                          (Artisanal and Small-scale Mining)
                                                has not been found.
   Quantity of reserves
   Sales volume                                Local definitions vary from country
   Operational continuity                      to country according to the
                                                macroeconomic situation, the
   Operational reliability                     geological framework, the mining
   Duration of the mining cycle                history and the legal conditions.

                             (Lit: E. Chaparro: La llamada pequeña minería - un renovado enfoque empresarial, Cepal, 2000.)
Conditions characterizing ASM

   exploitation of marginal and/or very small deposits, which are not economically
    exploitable by mechanized mining
   great amount of physically demanding work or very reduced degree of
   deficiencies in the exploitation and processing of the mineral production (low recovery
    of values)
   low levels of productivity
   chronically lack of working and investment capital
   poor access to markets and support services

   low qualification of the personnel on all level of the operation
   low level of salaries and income
   low level of occupational safety and health care
   low consideration of environmental issues
   lack of social security

   frequently working without legal mining titles
   subject to extortion and persecution
Typification of ASM

   Permanent artisanal and small-scale mining
       Full time, year round activity.
       Frequently the only economic activity or sometimes accompanied by other               Tarkwa
        activities like farming, herding or other extractive tasks of indigenous groups.     gold mine
   Seasonal artisanal and small-scale mining
       Seasonal switching of activities or seasonal migration of people into artisanal
        mining areas
       Frequent during idle agricultural periods to supplement annual incomes.               Oro en
   Rush-type subsistence, artisanal and small-scale mining                                 Huacaschuque
       Massive migration based on the perception that the expected income
        opportunities from recently discovered deposit far exceeds the current actual
       It is not uncommon to observe former rush areas converting into new communities
        and rush miners converting into settlers.                                           Serra Pelada

   Shock-push artisanal or subsistence mining
       Clearly poverty driven activity after recent loss of employment in other sectors,
        conflicts or natural disasters.
       Many of the individuals, mostly itinerant and poorly educated, have no other
        choice and miners remain trapped in the poverty cycle.                              Gold for bread
Income opportunities in ASM

Estimated income of artisanal miners in comparison to alternative local
economic activities
Type of ASM       Description                                          Factor
                  Generally higher income than           alternative
Permanent ASM                                                          1.5 – 5
                  occupations in the same region
                  Similar or slightly higher income than alternative
Seasonal ASM      occupations; opportunity to generate additional      0.8 – 1.5
                  income during idle periods of other occupations
                  Lower income than previous occupation, but still
Shock-push ASM    best available opportunity or buffer at a given      0.5 – 0.9
                  Significantly higher income than most other
Rush type ASM                                                          0.5 – 20
                  employment opportunities
Who is an artisanal or small-scale miner?
Community based mining

   Permanent and seasonal artisanal mining carried out by local
    population, building their own livelihood strategy upon the
    mineral resources within their communal territory

       Note: rush-type and shock-push artisanal mining have the potential
        to create new communities and convert into community based mining.
Who is an artisanal or small-scale miner?
Group size

 individual miner or gold panner
 small groups of about four to ten miners

but also:
 large cooperatives or communities involving thousands of
              Definition problem in most legislations:
              large number of workers = large scale
Who is an artisanal or small-scale miner?
Entrepreneurial character of ASM

   Baseline: Self-employed artisanal mining is “per se” an
    entrepreneurial activity. Investment and employing workers
    converts artisanal mining gradually into small-scale mining
   Scenario 1: participating with investment
       One group member or investor contributes with machinery and gets share of
   Scenario 2: profit and risk sharing agreements                         Cachorreo
       Agreement between mine owner (investor) and workers
         From the owner‟s point of view: small-scale mining, even if technology is
         From the workers point of view: artisanal mining (acceptance of payment in
          form of profit sharing is an entrepreneurial attitude)
   Scenario 3: hired labor
       Permanent hired labor: usually small-scale mining
       Occasional hired labor (helpers): usually artisanal mining
                                               Example: Cachorreo

Unique system based on pre-colonial traditions in the Andean region of
Peru and Bolivia

   mine owner („contratista“) invites miners to work
    with him under the following agreement:
       miners get no salary
       miners work certain time for the owner (usually one
       at the end of the month miners get certain time
        („cachorreo“: usually 2-3 days) to work for themselves,
        using the owner„s machinery
       during „cachorreo“ miners invite other miners to work
        with them under the following agreement:
           miners get no salary
           miners work certain time for the miner
           at the end of the 2-3 day„s period miners get certain time
            (usually a 1-3 hours) to work for themselves
Who is an artisanal or small-scale miner?
ASM related activities

   ASM covers the entire production chain from prospection,
    extraction, processing to marketing
   Except the case of individual miners, tasks become separated
    and specialization occurs, including mining related services,
    both upstream (service provider) and downstream (local
   The extent to which service providers are considered “miners”
    varies widely
       This becomes even more evident regarding women‟s work or especially
        regarding child labor. As women and children are often dedicated to
        mineral sorting and processing, transport of mineral, provision of
        supplies or similar activities, their work is frequently sub-valuated and
        not considered as “mining” activity in the sense of “extracting ore”.
Who is an artisanal or small-scale miner?
ASM service providers or „middlemen“ ?

   The wide range of services on the supply side or on the market side, e.g.
    local businessmen, money lenders, supply stores, traders and dealers buying
    the product, have an outstanding potential to create dependencies and
    vulnerabilities for the artisanal miners.
   While these activities are characterized by an - in principle legitimate -
    entrepreneurial approach, these activities need to be understood as clearly
    different from artisanal mining.

   However, it has to be admitted, that
    due to lack of other sources of
    financing, middlemen and financiers
    play often an important role for
    the artisanal miners
How many artisanal miners ?
   How is ASM defined or understood ?
          Different in each country (100 t/d is large in Ecuador but small in Peru; some countries
           include others exclude quarries and construction materials for local use)
          Different in each legislation
          Undefined in many countries
   Who is an artisanal or small-scale miner ?
          The concession holder?
          All members or shareholders?
          All workers? - only permanent or seasonal too?
          All workers and service providers?
          Everybody living directly or indirectly from mining activity?
   Who counts artisanal miners ?
          Government, private sector or civil society?
   Who counts illegal miners ?
          Can and want Governments disclose numbers of illegal miners?
   For what purpose ?
          Possible bias ... !!!
How many artisanal miners ?
   In 1993 it was estimated that about 6 million of the world's 30 million
    mineworkers were engaged in small-scale
          N.S. Jennings: Small-scale mining in developing countries: Addressing labour and social issues", in
           Guidelines for the development of small/medium-scale mining (New York, United Nations, 1993

   1999: “With a global workforce of up to 13 million and rising, the number of
    people who depend on small-scale mining for their livelihood, bearing in mind
    extended families in many developing countries and a small multiplier effect,
    could be 80-100 million.”
          N.S. Jennings: Report for discussion at the Tripartite Meeting on Social and Labour Issues in Small-scale
           Mines. ILO, Geneva, 17-21 May 1999

   2003: “… figures of up to 30 million artisanal miners realistic”
          Veiga, M., L. Bernaudat: The Global Mercury Project (GEF, UNDP, UNIDO). Proceedings 3rd CASM AGM

   2005: “… best guess: 10 to 15 Million ASM involved in gold”
          Veiga, M.: Global Mercury Project. GEF/UNDP/UNIDO. In Presentations of 5th CASM ACC 2005

   2011: ??? (note: gold price 1999: 300$/oz  2005: 450 $/oz  2011: 1500$/oz !)
     ASM - how many and where ?
                                2003: “… figures of up to 30 million
                                artisanal miners realistic”
                     America    2005: “… best guess: 10 to 15 Million
                                ASM involved in gold”
                                                Sources: UNIDO, UNEP, GMP

                                2010: …? more than 30 million (40-50?)
                                                                 (No data)


Data: ILO 1999
Map: CASM 2009
Commodities mined by ASM

   Besides of wide a variety of mineral raw material, artisanal mining is
    dominated by easily marketable (high unit value) minerals such as gold and
   Problems for estimating global ASM production:
         widely varying national definitions
         lack of statistics on local production and consumption of industrial minerals
         informal nature of most ASM activities
         Illegal trading of commodities such as gold and gemstones
   UNIDO 2002 estimated production from artisanal and small-scale mining
         12% of metallic minerals
         31% of industrial minerals                                                                    Other recent estimates:
         20% of coal                                                                                          20% of gold
         10% of diamonds                                                                                      90% of colored gemstones
         75% of gemstones                                                                                      (ruby, sapphire, emerald)

    Beinhoff, Ch.: UNIDO‟s Strategy to Achieve Sustainability in Projects Related to Mercury Pollution of International Waters caused by Small-Scale Gold Mining.
    Proceedings of Workshop on Sustainability Indicators in the Minerals Industry, Carajas/Brazil , 24-28 June 2002.
     Commodities mined by ASM
                                            Malawi   Mozambique Tanzania South Africa Zambia Zimbabwe
                      Barite                                                                    X
                      Bauxite                            X
                      Chromium                                                                  X
                      Clay                    X          X                             X        X
Example:              Coal
                                              X          X                    X
minerals              Copper                             X                             X        X
                      Diamonds                           X          X         X        X
produced by           Feldspar                                                         X        X
ASM in SADC           Gemstones               X          X          X        X         X        X

countries             Gold                    X          X         X         X         X        X
                      Graphite                                                X                 X
                      Gypsum                                        X
(adapted from         Iron                                                                      X
                      Kaolin                                                  X                 X
MMSD, 2001)           Lead                                                             X
                      Limestone               X          X          X         X        X        X
                      Lithium                                                                   X
                      Magnesite                                                                 X
main product      X   Nickel                                                                    X
                      Orn. & Dim . stones     X          X          X         X        X        X
important product x   Phosphate                                               X                 X
                      Platinum                                                                  X
                      Quartz                                                           X        X
                      Salt                    X                               X                 X
                      Sand                    X          X          X         X        X        X
                      Silver                                                  X        X        X
                      Sulfur                                                           X        X
                      Talc                    X          X                    X        X        X
                      Tin                                                                       X
                      Tungsten                                                                  X
                      Zinc                                                             X
     Minerals and deposits suitable for ASM
                                                                      Placer Gold
   In artisanal mining, the amount of mineral one                    Hard-rock Gold
    worker can extract and process during a day,                      Precious Stones
                                                                       (emerald, sapphire, ruby)
    has to provide for his and his family‟s living                    Diamonds

   Two different types of ASM can be distinguished                   Clays for brick production
       mining of high-unit-value minerals like gold and              Sand, Stone, Limestone
        precious stones, mainly for export                            Marble, Ornam. stones
        competitive advantage:                                        Salt
                                                                      Coal
        Selectivity of manual work, small high-grade deposits
       mining and quarrying of low-price bulk material like          Mica, Barite, Fluorspar
        coal, certain industrial minerals and construction            Base metals, Chromite
        materials on a small scale for local markets                  Cassiterite (SnO2)
        competitive advantage:                                        Ta-Nb ore „coltan‟
        local mine + local market = low transport cost                Semi-Precious Stones
                                                                       (agate, onyx etc)
        Examples: Sulphur / Indonesia, Tin / Congo, Coal / Ukraine
Mineral deposits suitable for ASM

   Low mechanization and high labour
    intensity allow for selective mineral
    extraction of deposits that would
    normally not be profitable for
    conventional mining operations

   Large low grade deposits that allow for
    mechanization are therefore of limited
    interest for artisanal mining

   The type of workable mineral deposits
    assembles those that were mineable
    several decades ago, before modern
    mechanization took place
Mineral deposits suitable for ASM

   Reprocessing of abandoned
    tailings and dumps
   Extraction of remaining mineral
    from abandoned conventional

    Frequently, artisanal mining
    continues during decades as an
    environmental legacy and
    employment opportunity
    generated through of
    inadequate mine closure of
    large scale mines.
     Mineral deposits suitable for ASM

   Kalich coal mine in the
    Ishpushta District in
    northern Afghanistan
   Artisanal miners
    extracting about
    10.000 tons of coal
    per year from a 0.5 -1
    m thick seam
   Industrial mining
    stopped after “Soviet
    times”, but artisanal
    mining continues
ASM and mineral deposits

Positive and negative aspects
   ASM often mine „uneconomic“ deposits
   ASM often mine small deposits
   ASM often more efficient
   ASM often discover new deposits
   ASM can mine large deposits
   ASM can contaminate large deposits
   ASM can exclude large companies
Conflict potential: large high-grade deposits

   Invasion of AngloGold Ashanti open pit in Africa
„Open access“ and „common pool“ resources

   In most countries mineral resources owned in first instance by
    the State. State makes either direct use of its right or licenses
    concessions to the private sector.

   Communities often claim mineral resources in their territory as
    their property, especially when these have traditionally been
    part of their livelihoods.

   Mineral deposits suitable for ASM share characteristics of
    open access resources with characteristics of common pool
    resources: …
„Open access“ and „common pool“ resources

   “Open access”:
    Minerals are easily available on the earth‟s surface. The “open access” feature
    allows artisanal miners to usually skip the exploration phase and to proceed
    with extraction immediately after discovery.
   “Common pool”:
    Deposits suitable for ASM are characterised by the difficulty of excluding
    anyone from using them, but face problems of congestion or overuse, and the
    use by one actor implies that less is available for others.
   Governments‟ problems in dealing with ASM:
    Under mining laws, deposits are state or private property but artisanal miners
    extract deposits under a common property regime.
    Common-pool resource appears as a private good to an outsider and as a common
    good to an insider of the community.

           Ostrom, E.: Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge,
            UK, 1990. (Nobel Price for Economy 2008)

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