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FORMALIZATION OF ASGM: Is It Possible To Achieve? Maria Laura Barreto laurabarreto@sympatico.ca. Why Artisanal And Small Scale Mining? Poverty Persists in Developing Countries. Source: AJ Gunson/CASM. Why Artisanal And Small Scale Mining?.

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slide2

Why Artisanal And Small Scale Mining?

Poverty Persists in Developing Countries

Source: AJ Gunson/CASM

why artisanal and small scale mining
Why Artisanal And Small Scale Mining?
  • 3.9 billion people live in today’s 56 mining countries
  • 90% of them in 51 developing and transition countries (Weber-Fahr, Monika, 2002)
  • About 1.5 billion live on less than $2 a day, making up nearly two thirds of the world’s poorest population (Golden Opportunity, 2010)
  • According to the International Labour Organisation (ILO) Large Scale Mining (LSM) is not a major employer
  • LSM employs about 0.5% of the world’s workforce - around 11 million people globally (ILO)
  • Large scale mining employs about two million in developing countries. (UNCTAD, 2007)
why asm
Why ASM?
  • During the last decade the metals mining industry has become centralised and concentrated (UNCTAD, 2007)
  • The top five – Newmont, Barrick, Anglogold, Gold Fields Limited andGoldCorp– produced 32% of all gold mined globally in 2007
  • Small Scale Mining (SSM) accounts for the employment of around 13 million people and affects the livelihoods of 80-100 million. (ILO) (compares with around 2-3 million directly employed in LSM sector.
    • 12% -20% of the metals (particular gold)
    • 21% of the industrial minerals
    • 20% of the coal
    • 10% of the diamonds
    • 75% of the gems (CASM Asia, Conflict Gems – Presentation)
why is it so difficult to legalize asm
Why Is It So Difficult To Legalize ASM?

ILO research (1999) on 28 countries concludes:

The proportion of illegal mines -- those operating without the necessary authorization - varied from 50 to 80 per cent… If these figures can be considered a valid sample, the extent of illegal small-scale mining is very high and so, therefore, are the likely financial losses to the countries and regions most affected.

  • The association between illegality or informality and ASGM activities is so common that it is considered an inherent characteristic of ASGM
  • Why?
slide6

Why Is It So Difficult To Legalize ASM?

ASGM versus LSGM

  • very low capital, low technology and labour intensive – an activity accessible to (almost) everyone

Mineral Resource is in Open Access

        • open and easy access to everyone
            • generates economic and social benefits at a low cost
            • many are interested in the resource and it is difficult to control their utilization of it

Redefine the approach to ASGM

or

slide7

Redefining The Approach To ASGM

ASGM exists because

Geological and physical and chemical conditions of the deposits and mineral produce allow simplified forms of extraction, processing, transport and commercialization. It includes secondary deposits (placer/alluvial deposits), some superficial primary deposits and more recently, some abandoned mines.

ASGM is an economic mining activity that is here to stay, an activity that the poor can perform. It can become a legalized livelihood profitable for all involved and can contribute to poverty alleviation and a sustainable society in less economically developed countries (LDC) and developing countries.

The definition of ASM is critical to guide for public policy

why is it so difficult to legalize asm1
Why Is It So Difficult To Legalize ASM?
  • UNEP is contributing to this debate with a document “Analysis for Stakeholders on Formalization in Artisanal and Small-scale Gold Mining Sector based on Experiences in Latin America, Africa and Asia”
  • The document includes cases studieson Mongolia, Ecuador, Uganda, Peru and Tanzania
  • The document covers environmental, regulatory, economic and institutional aspects of the formalization of ASGM
  • More information please consult: www.unep.org/hazardoussubstances/FormalizationDocument/tabid/56052/Default.aspx
tanzania

Overview

  • Legislation since 1997
  • Prospecting license (1 year, 10 ha.)
  • Primary mining license (5 years, 10 ha., renewal for more 5 years)
  • Transfer of rights
  • Allows the holder of Primary Mining License to convert the license into a medium and larger mining license and to combine multiple primary mining licenses together and convert them into a medium and larger mining license.
  • Environmental regulations have very clear set of rules
Tanzania

500,000 to 1 M, and some estimates indicate 1.5 M people in ASM(Carstens et al, 2009; Society for International Development, 2009)

National gold exports reached $1.076 B in 2009, ASGM may account for 10% of Tanzanian gold production

  • May consider the following,
  • Two titles for different phases that can be converted into one title
  • Different titles to allow different operation sizes to be legalized
  • Tanzania has conflicts between large and small operations - legislation does not give options to promote partnerships or collaboration between the two
  • Environmental regulation rules based on specific technical guidelines could help implementation (e.g. the use of retorts)
tanzania new mining law 2010
Tanzania: New Mining Law 2010

Microfinance Policies: develop microfinance services specifically tailored for the artisanal and small-scale mining sector.

 Programs for Capacity-Building: training activities with artisanal and small-scale mining groups to improve environmental management, technology upgrade programs and regional regulatory implementation.

Decentralized Permitting: introduces a new system of decentralizing the permitting process for Primary Mining Licenses with objective to be more efficient and more accessible within rural communities.

Land Allocation Policies for Small-Scale Mining:measures for allocating specific land areas for small-scale mining. To make this policy effective they need to;

conduct geological studies and

to ensure that mining groups are not unfairly marginalized

sierra leone
Sierra Leone

Legislative Overview

The new Act (2009) defines Artisanal (AL) and Small-scale mining licenses (SL) with following conditions,

  • Area : AL – 0.5ha for one year and renewable for the same time no more than 3 times and
  • SL - 1-100 ha for three years and renewed for further periods not exceeding three years at a time
  • A small-scale mining licence shall be granted to a corporate body or cooperative that has a minimum of twenty-five percent of its shares held by citizens of Sierra Leone
  • An artisanal licence shall be granted to 1) citizen of Sierra Leone; 2) a co-operative, a joint-venture or partnership registeredinSierraLeone comprising citizens of Sierra Leone exclusively; 3) corporate body that is incorporated or registered in Sierra Leone having one hundred percent of its shares held by citizens of Sierra Leone

Sierra Leone is estimated to have 150–200,000 artisanal and small-scale miners working in diamonds and gold

The 2004 Mining Code replaced the Mines and Minerals Act 2009. The country is in the process of replacing its 2005 “Policy Measures relating to Small Scale and Artisanal Mining and Marketing of Precious Minerals” with its new multidimensional “Artisanal Mining Policy” after a process of consultation

sierra leone1
Sierra Leone
  • Applies the same restrictions for Artisanal holder to Small license to prevent the national capital from needing to compete with foreign capital
  • Environmental and management plans may be simplified in accordance with the size of the operations

Legislative Overview cont’d

Artisanal mining employs in the area in which the licence is issued not more than fifty labourers or contributersper artisanal mining licence

The area should be demarcated as an ASM area

Environmental assessments and management programs should be provided in a small-scale license and a more simplified assessment and plan for Artisanal license

May consider the following,

Assess the impact of such small areas in particular for artisanal mining

Removes reference to the number of workers for an artisanal license

Allows for renewal until the end of exploitation

slide13

10 Lessons About Effective ASM Formalization

  • Legalization is only one component of a larger vision and strategy for ASM formalization
  • The definition of ASM is not a gratuitous or academic exercise but a practical necessity to distinguish different types of mining
  • The special characteristics of ASM must be recognized in the mining regulatory system of the country
  • The legalization process is incremental, but respect for human rights is not
  • The concept that there exist categories of ASM that are impossible to regulate is false
slide14

10 Lessons About Effective ASM Formalization

  • Avoid imposing unnecessary restrictions or prohibitions on the choice of the business entity
  • The allocation of an area to the mining project constitutes a fundamental tool to achieve environmental and social protection.
  • Legislation can give more or less freedom to the licensee for transfer of the rights, permitted associations and upgrading among the mining licences or titles. Greater flexibility means more ability to exercise the right of exclusivity (and responsibility).
  • The monitoring process (for improvement of the ASM framework) can be more effective if managed independently from regulatory agencies
  • The different ASM stakeholders, particularly the miners, must contribute to the process of development of public policy and regulatory framework
arm asgm legalization guide
ARM ASGM Legalization Guide

To learn more about these recommendations please consult ARM’s legalization guide for ASGM and help us to improve it…

http://www.communitymining.org/attachments/059_ARM_Series5_Legalisation_guide_ASM.pdf

slide16

ASM legalization is not an easy route but

it is possible and is a necessary route to take

www.communitymining.org