Mining Specifics

Challenges and Opportunities - Artisanal and Small-scale Mining (ASM)

1.  Challenge: What are the Costs and Benefits of ASM?

The "Benefits" column can be read as a series of ASM "opportunities".

Costs

Benefits 

Geologic – Mining costs

− Exploitation of a non-renewable resource

− Losses e.g.

  • irrational working of high grade material
  • incomplete exploitation
  • processing methods
  • transport

Geologic – Mining benefits

+ possibility of exploiting smaller deposits

+ ASM achieves successful prospecting without high cost

+ Working of abandoned pillars, tailings etc.

+ Small scale miners discover important deposits in remote areas

Effects on the Environment - costs

− environmental risks, emissions and damage to:

  • earth
  • soil
  • water (underground and surface)
  • air
  • flora and fauna
  • energy sources
  • ecosystems

 

Social costs

− precarious working conditions

− negative health consequences (sickness, accidents)

− infra-human living conditions

− complicated dependency relations

− child labour

− unbalanced development between men and women

− violation of resident and indigenous community rights

− changes in the system of ethical values and its consequences

− insufficient social security

Social benefits

+ labour qualification

+ source of income (in money)

+ job creation

Macro-economic costs

− conflicts

− due to land and water usage

− with governing bodies (judicial conflicts)

− with large scale mining

− with the indigenous population

− with landscape protection objectives (national parks, protected areas)

  • Smuggling –illegality (products & profit)
  • no tax generation
  • costs of controlling the sector
  • continuous costs resulting from social causes
  •  uncontrolled development due to lack of planned exploitation

Macro-economic benefits

+ mobilization of natural resources

+ tax collection

+ active effect for the balance of payments

+ buffer for the labour market in cases of programs for structural adaptation

+ provides personnel reserves for large scale mining

+ contribution to regional economic development by

  • cash circulation (social product)
  • investment
  • demand for products and services
  • mobility
  •  structural consequences (alternative to
  • agriculture)

+ avoids rural exodus

+ infrastructure development (road building,

schools, energy supply) by small scale mining and neighbouring population

+ comparative financial advantages (products with a high labour coefficient in countries with high labour availability)

+ relative stable product supply even with market fluctuations

+ contributes to product diversity and exports

+ substitutes imports

Source: IIED & World Business Council for Sustainable Development, Global Report on Artisanal & Small-Scale Mining (2002).

2. Challenge of negative ASM perceptions - and reality, to some extent

The challenge of negative perceptions is well articulated as follows: "governments often see this sector as a source of problems: earning on which taxes are unpaid, occupation of lands to which there is no title, revenues flowing outside of the banking system, and even as an economic power base for criminals or revolutionaries." (Luke Danielson, CEPMLP Honorary Lecturer). 

However, this perception of ASM is actively contested, as implied by the title of the Malawi-specific journal paper (Kamlongera 2011) “Making the Poor ‘Poorer’ or Alleviating Mining Livelihoods in Rural Malawi?”, followed a year later by an overtly revisionist presentation in which he states that the “purpose of my research is to facilitate a change in mind-set” re. ASM, since “it is not as bad as it is portrayed” (Hilson, 2012, p.5), a phraseology mirrored in the text box (2.1, scroll down) authored by Hilson’s doctoral-supervised candidate Perks, titled: “Re-framing the ASM debate: its integration into the EI Value Chain”.

ASM as replete with positive opportunities: at the furthest end of this scale, one of the most positive introductions to the concept of ASM is that provided by Hirons (2014, pp. 9-10) that “the notorious reputation of mining as a source of conflicts and environmental degradation is countered by its importance as an engine of economic growth. In addition to the multinational mining companies topping stock indexes in financial capitals across the world, the ASM sector produces significant quantities of minerals and provides numerous employment opportunities, particularly in poor rural areas where agriculture fails to provide an adequate livelihood.” 

Additional Sources: 

  • Hirons, M. A., 2014. Mining, Forests and Land-use Conflict: The Case of Ghana. PhD; and
  • Kamlongera, P. J., 2011. Making the Poor ‘Poorer’ or Alleviating Poverty? Artisanal Mining Livelihoods in Rural Malawi. Journal of International Development. J. Int. Dev. 23, (2011). pp. 1128–1139. 

 

3. Challenge of Formalisation

Formalisation is a central debate amongst policy-makers, both in normative and practical terms, i.e. both should ASM be part of the formal economy and, if so, what are the practicalities of bringing that about typically through the creation of legally established mining cooperatives and other forms of social enterprise. As a starting point, an due to its informal nature, it is noted that ASM “operat(es) in the absence of an applicable or appropriate legal framework” (Buxton, 2013, p.4).  By extension, the ICMM notes that “the fact that much of ASM activity occurs outside regulatory frameworks – whether illegal or not – can also present significant challenges for companies and regulators” (p.1), who in such circumstances may lack a clear frame of reference to deal with the sector.  However, that does not necessarily imply that formalisation is in ASM miners' interests.

Indeed, Maconachie’s analysis (Maconachie, 2011, slide 7) and resulting conclusion that that “any attempt to formalize ASM must be informed by detailed field-based research”, consistent with the principle of unintended consequence. In particular he argues that there needs to be:

  • Understanding local governance contexts, particularly the unequal power relationships which exist at different scales”, a point that resonates with the above non-attributable accusation; and
  • Fostering cross-linkages between policies, and creating more flexible policies that allow for diversification and movement between productive activities to improve and safeguard livelihood bases.

In the above context, it is clear that the "opportunities" presented by ASM formalisation are both contested and contextual, i.e. the following question needs to be explicitly answered: "opportunities for whom: regulators; policy makers; corporations; and/or the ASM miners themselves?"

 

Comments
  • Rachel Etter (Mining Project Coordinator: I am not sure about the formalisation debate re. ASM, who would really gain? Uncertain. The miners need to take an informed view of this… read more
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