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FORMALISATION OF ARTISANAL AND SMALL-
SCALE MINING IN SUB-SAHARAN AFRICA:
CHALLENGES AND WAYS FORWARD
ALICE LUNGU
MSc INTERNATIONAL DEVELOPMENT:
ENVIRONMENT AND DEVELOPMENT
INSTITUTE FOR DEVELOPMENT POLICY AND MANAGEMENT
UNIVERSITY OF MANCHESTER
FACULTY OF HUMANITIES
SCHOOL OF ENVIRONMENT AND DEVELOPMENT
SEPTEMBER 2007
ii
FORMALISATION OF ARTISANAL AND SMALL-SCALE MINING IN SUB-
SAHARAN AFRICA: CHALLENGES AND WAYS FORWARD
by
ALICE LUNGU
A DISSERTATION SUBMITTED TO THE UNIVERSITY OF MANCHESTER
FOR THE AWARD OF THE DEGREE OF MASTER OF SCIENCE IN
ENVIRONMENT AND DEVELOPMENT IN THE FACULTY OF HUMANITIES
STUDENT ID : 7055244
WORDS : 14,761
iii
TABLE OF CONTENTS
TABLE OF CONTENTS ......................................................................................................................... III
DECLARATION .................................................................................................................................... IV
DEDICATION ......................................................................................................................................... V
ACKNOWLEDGEMENTS .................................................................................................................... VI
ABSTRACT ........................................................................................................................................... VII
LIST OF ACRONYMS ........................................................................................................................ VIII
LIST OF FIGURES ................................................................................................................................. IX
LIST OF TABLES ................................................................................................................................... IX
CHAPTER 1 INTRODUCTION TO THE STUDY ................................................................................. 1
1.1 INTRODUCTION .............................................................................................................................. 1
1.2 STATEMENT OF THE PROBLEM ................................................................................................... 2
1.3 CHAPTER SYNTHESIS .................................................................................................................... 3
CHAPTER 2 FORMALISING ARTISANAL AND SMALL-SCALE MINING .................................... 4
2.1 INTRODUCTION .............................................................................................................................. 4
2.2 CONCEPTUALISING ARTISANAL AND SMALL-SCALE MINING ........................................... 7
2.2.1 DUALITY OF SMALL-SCALE MINING ................................................................................... 9
2.2.2 MOTIVATIONS FOR FORMALISING ARTISANAL MINING ............................................... 13
2.2.3 IMPORTANCE OF ARTISANAL MINING .............................................................................. 16
2.3 BENEFITS OF FORMALISING ARTISANAL MINING ............................................................... 20
2.3.1 MINERS’ PERSPECTIVES ON FORMALISATION ............................................................... 21
2.3.2 GOVERNMENT’S PERSPECTIVES ON FORMALISATION ................................................. 24
2.4 CONCLUSION ................................................................................................................................. 26
CHAPTER 3 CHALLENGES FACING FORMALISATION OF ARTISANAL AND SMALL-SCALE
MINING .................................................................................................................................................. 29
3.1 INTRODUCTION ............................................................................................................................ 29
3.2 MINERS‟ PERSPECTIVES ............................................................................................................. 30
3.2.1 LACK OF SECURITY OF TENURE ....................................................................................... 30
3.2.2 COMPLEX REGULATIONS AND REGISTRATION PROCEDURES .................................... 32
3.2.3 LACK OF ACCESS TO CREDIT FACILITIES ....................................................................... 33
3.2.4 LACK OF ACCESS TO MARKETS ......................................................................................... 34
3.2.5 LACK OF GOVERNMENT SUPPORT ................................................................................... 37
3.3 GOVERNMENT‟S PERSPECTIVES .............................................................................................. 39
3.3.1 LACK OF DEMOGRAPHIC INFORMATION ........................................................................ 39
3.3.2 UNAVAILABILITY OF GEOLOGICAL INFORMATION ....................................................... 41
3.3.3 LACK OF POLITICAL WILL .................................................................................................. 42
3.4 CONCLUSION ................................................................................................................................. 43
CHAPTER 4 CONCLUSIONS AND RECOMMENDATIONS ............................................................ 45
4.1 INTRODUCTION ............................................................................................................................ 45
4.2 MOVING FORWARD WITH FORMALISATION OF ARTISANAL MINING ............................ 45
4.2.1 STAKEHOLDER PARTICIPATION ........................................................................................ 45
4.2.2 DECENTRALISATION ............................................................................................................ 47
4.2.3 CAPACITY BUILDING ........................................................................................................... 50
4.2.4 PARTNERSHIPS ..................................................................................................................... 52
4.3 GENERAL CONCLUSIONS ........................................................................................................... 53
BIBLIOGRAPHY ................................................................................................................................... 57
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DECLARATION
This is a thesis submitted to the University of Manchester for the degree of Master of
Science in Environment and Development in the Faculty of Humanities. I, ALICE
LUNGU declare that this thesis is my work, and that no portion of the work referred to
herein has been submitted in support of another application for another degree or any other
purposes at this University or any other institution of learning. Works by other authors
have been duly acknowledged.
Dully signed by:
AUTHOR
SUPERVISOR
Alice Lungu
The Copperbelt University
School of Built Environment
Jambo Drive
P. O. Box 21692
Riverside, Kitwe.
Zambia.
Email: alicesuzyo@yahoo.co.uk
Dr. Gavin M Hilson
Institute for Development Policy and
Management (IDPM)
The University of Manchester
Oxford Road
Manchester, U.K.
M13 9QH
Email: gavin.hilson@manchester.ac.uk
Signature:……………………………
Signature:……………………………
Date:………September, 2007
Date:………September, 2007
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DEDICATION
This thesis is dedicated to my beloved parents, Cecilia and Matenda Thomas Lungu.
Thank you for believing in me.
To the LORD God Almighty for being there all the time, and in Him have I trusted with
all my heart. And I am certain He has directed my paths (Proverbs 3:5).
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ACKNOWLEDGEMENTS
I would like to express my heartfelt gratitude to my supervisor, Dr. Gavin M. Hilson for
his invaluable advice on this work. I also wish to thank The Copperbelt University for
awarding me the scholarship and according me the opportunity to study for a master‟s
degree. I hope that this kind of support shall be extended further in future. I also take this
opportunity to thank my family most sincerely for their prayers and moral support
especially in trying times. Finally I would like to thank all the galamseys in the
Environment and Development (ED), and Environment and Management of Rural
Development (EMRD) Pathways, for being wonderful people. God Bless you all.
vii
ABSTRACT
Increasing numbers of people in many rural areas in Sub-Saharan African (SSA) countries
have turned to artisanal and small-scale (ASM) mining to seek alternative livelihoods. The
contribution of the sub-sector to employment creation and income generation, government
revenue and foreign currency, and export minerals base cannot be denied. The indirect
benefits of ASM include contributions to the reverse trends in rural-urban drifts and it also
has the potential to catalyse local economic development.
Regardless, ASM is beset by numerous problems including environmental degradation,
socio-cultural disruption, poor occupational health and safety, and child labour. These
problems actually obscure the strategic importance of ASM, and have acted as a major
excuse for its continued isolation from the mainstream economic development.
Nevertheless, many governments have recognised the importance of ASM and realised
that as long as poverty is around, ASM will continue to exist. Thus, they have formalised
the sub-sector, hence recognising its activities. However, despite being formalised, many
ASM activities continue to operate outside the legal frameworks.
This thesis therefore critically examines a number of issues concerning the factors that
exacerbates illegal mining in SSA. It also examines the challenges miners and
governments face in formalising ASM, while also looking at some possible solutions
available for moving forward with the formalisation of ASM.
viii
LIST OF ACRONYMS
ASM Artisanal and Small-Scale Mining
ARD Acid Rain Damage
DFID Department for International Development
ERP Economic Recovery Programmes
EU European Union
ECA Economic Commission for Africa
GTZ Deutsche Gesellschaft fur Technische Zusammenarbeit
ILO International Labour Organisation
IMF International Monetary Fund
ITDG Intermediate Technology Development Group
LDCs Least Developed Countries
LSM Large-Scale Mining
MNCs Multi-national Corporations
NGO Non-Governmental Organisations
OHS Occupational Health and Safety
SAP Structural Adjustment Programmes
SMC Shamva Mining Centre
SOEs State-Owned Enterprises
SSA Sub-Saharan Africa
SSM Small-Scale Mining
SSMAZ Small-Scale Mining Association of Zimbabwe
VAT Value Added Tax
ZRB Zimbabwe Reserve Bank
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List of Figures
Figure 2-1: Economic Segmentation of the mining sector ................................................. 10
Figure 3-1: Poverty Trap ..................................................................................................... 36
Figure 3-2: Transition from unsustainable to sustainable environment .............................. 39
List of Tables
Table 2-1: Selected Sub-Saharan African Countries .......................................................... 18
1
CHAPTER 1 INTRODUCTION TO THE STUDY
1.1 INTRODUCTION
In the last two decades, mining in Sub-Saharan Africa (SSA) has undergone massive
transformation from being state-controlled to private-sector driven. Governments, often
under the supervision of the World Bank, have implemented mining sector reforms which
have seen the privatisation of state-owned enterprises (SOEs), and opened up the sector to
foreign investment. However, the price for luring investment into the countries has been
quite high. Because of significant competition for foreign investment, many countries
have had to rapidly revise their mining codes and specially designed them to be investor-
friendly. In addition, they have created very attractive incentive packages for investors
(Campbell, 2003). These have included large concession and long leases; tax breaks for
long periods; low royalty rates; and the freedom to repatriate large percentages of profits
(Obara and Jenkins, 2006).
While large-scale mining (LSM) has experienced significant growth, another sub-sector
within the mining sector has emerged operating entirely under different conditions and in
an unorganised and uncoordinated manner (Banchirigah, 2006). Artisanal and small-scale
mining (ASM), which comprises registered and illegal operations, has expanded
significantly. This expansion is attributed to a number of factors. First, the economic
reforms undertaken in SSA have resulted in high unemployment and poverty levels among
people many of whom have joined ASM for survival (Hilson, 2005). Second, the liberal
economic policies adopted by individual governments have also created an enabling
atmosphere for ASM because they have promoted the development of LSM but ignored
ASM leaving it to develop uncontrollably (Fisher, 2007). Finally, the increases in mineral
2
prices on the international market have also contributed to the expansion of ASM
(Yakovleva, 2006). People are attracted by high prices and hope to get rich quickly.
While ASM provides employment opportunities and livelihoods to many people and
contributes to government revenue, foreign currency and export minerals base, and local
economic development, it causes damage to the environment and socio-cultural fibre of
communities (McMahon et al., 1999). For this reason, it has aroused widespread
condemnation such that many interest groups have advocated for its banning. However,
many governments have recognised the potential of ASM to sustainable development and
sustainable livelihoods, and have since formalised the sector (Fisher, 2007).
1.2 STATEMENT OF THE PROBLEM
Despite formalising ASM, the majority of the sector continues to operate outside the legal
framework. Kambani (1995) estimates that more than 50% of all activities within the
sector are illegal, while D‟Souza (2002) and Yakovleva (2006) put the estimate at more
than 75% and 80% respectively. Therefore, the question that arises hinges on the
effectiveness of the existing legal framework regulating the ASM sector. For illegal
mining to thrive in the presence of legal provisions, it means that the system has failed to
serve the sector. Thus, this thesis contends that the existing ASM legal frameworks are
defective and hence they have failed to effectively regulate the activities of the sector.
Instead, they have contributed to creating an enabling environment for illegal mining
activities.
Due to time limitation, it was not possible to undertake field work of any kind. For this
reason, this study has been based on secondary data only. However, this study aims to
highlight and examine the driving factors into illegal mining; examine the challenges
3
facing formalisation of ASM; and find possible ways to help move the formalisation
process forward. The importance of this study is that its findings would help governments
review the existing ASM legal frameworks in the context of the needs and requirements of
the sector. To effectively carry out this study, a hypothesis was formulated: the failure to
formalise artisanal and small-scale mining in Sub-Saharan Africa has been due to
defective legislative policies which have made regulation of the sector difficult.
1.3 CHAPTER SYNTHESIS
This study is divided into four chapters. The first chapter introduces the whole study
stating the problem being investigated, the importance of the study and its objectives. The
second chapter gives a conceptual framework of ASM bringing out the issues of duality
within the mining sector as a whole and within ASM respectively. It further highlights the
problems associated with ASM while also capitalising on its importance. Moreover, the
chapter looks at the benefits of formalisation of ASM from the perspectives of miners and
governments. Chapter three critically reviews and analyses, based on the existing
literature, the challenges faced by both miners and governments as they take the journey
towards formalising ASM. Finally, chapter four discusses some of the possible ways in
which the formalisation of ASM can move forward. It also draws general conclusions
from the whole study and makes recommendations for further study.
4
CHAPTER 2 FORMALISING ARTISANAL AND SMALL-SCALE MINING
2.1 INTRODUCTION
Following the economic recovery programmes (ERP) implemented in many SSA
countries, there have been high levels of unemployment and poverty. The general
performance of these countries has also deteriorated over the last two decades; their
rankings on the Human Development Index
1
(HDI) have progressively fallen. In fact,
Labonne (2002) states that thirty-three of the forty-eight least developed countries (LDCs)
are all located in SSA, among which are mineral-rich countries, and at the bottom of the
HDI. There are many factors that have contributed to this downward trend. Rasheed and
Chole (1994: unpaged) argue that “misguided policies, rapid population growth,
environmental degradation, civil strife, and an unfavourable international economic
environment” have been the major contributors.
However, while all these factors are at play, vulnerable
2
people, have had to find coping
strategies, and ASM has proved to be one such strategy. Baartjes (2006: unpaged) makes a
connection between poor performance and ASM stating that “there is an inverse
relationship between a country‟s HDI ranking and intensity of small-scale mining because
as the HDI declines, countries tend to lose economic opportunities and synergy.
Ultimately people resort to ASM mining out of desperation”. ASM is an endemic feature
of poor countries where mineral ore deposits are found on or close to the surface, “easy to
mine with simple tools, and are characterised by the relative simplicity of marketing
arrangements” (Sinding, 2005:243). For this reason, ASM has become the easiest coping
strategy adopted by vulnerable people.
1
United Nations system of categorising nations‟ performance based on life expectancy literacy levels and
GDP.
2
People easily affected by policy changes especially the poor.
5
While ASM provides a means of livelihood to many poor people, most governments view
it as an unsustainable and unacceptable way of life (Echavarria, 2004). This is because of
its associated socio-economic and environmental problems. This negative image of ASM
has expanded and persisted, and as a result, governments are not really committed to
ASM. Thus, they have dismissed it as a temporary activity that would soon disappear; and
miners would go back to their primary livelihood activities (Burke, 2006). McMahon et al.
(1999) argue that ASM is unlikely to disappear unless there are substantial other economic
opportunities. Echavarria (2004: unpaged) adds that since ASM is here to stay “it is a
reality we need to deal with, and it may even be one of the keys to the challenge of
reducing poverty and inequality”. Although, the biggest challenge to transforming ASM
into a sustainable activity is its informal status which precludes it from being recognised
and receiving the support it dully requires for development.
ASM has not attracted as much support and attention as has large-scale mining (LSM).
The mining sector reforms undertaken by many SSA countries have certainly opened up
the mining sector. Evidence of this can be seen from the influx of LSM multi-national
corporations (MNCs) (Fisher, 2007). Respective governments under the supervision of the
World Bank have provided good incentives and tremendous support to MNCs (Echavarria,
2004; Akabzaa and Darimani, 2001). In the meantime, ASM has simply been ignored and
left on the fringes (Munnik, 2005). As a result ASM has developed in an uncontrolled and
haphazard manner resulting in over 50% of its activities operating illegally (Kambani,
2003c; D‟Souza and Jennings, 2005).
Nonetheless, views of transforming ASM into a sustainable activity have caught the
attention of many organisations. During the prominent United Nations Seminar held in
Zimbabwe in 1993, policy change was signalled, and its emphasis was on economic
importance of SSM while at the same time endorsing the need for all mining (large and
6
small-scale) to be incorporated into one legal system (Fisher, 2007). Mutemeri and
Petersen (2002) and Bugnosen (2001) argue that in some countries legislation which is
used for regulating ASM is based on that of LSM, and yet ASM does not benefit from the
same incentives as LSM. In addition, the regulatory frameworks for ASM do not reflect
the specific needs of the sector; hence resulting in monitoring and enforcement
difficulties. Therefore, by incorporating all mining into one legal system, governments
would be able to devote some attention to ASM too, and accord it the support it requires.
Besides, the ASM sector is governments‟ sole responsibility, and thus governments would
be compelled to support it.
Two years later, following the Zimbabwe declaration, in 1995 the World Bank convened
an international roundtable for artisanal mining in developing countries to discuss the
potentials and problems of the growing informal sector (Barry, 1996). According to Fisher
(2007:736) the roundtable meeting called on governments “to transform the informal
artisanal mining into formal mining operations by enabling miners to gain legal and
transferable rights to mineral titles”. In response, many African countries have put in place
legal frameworks to regulate ASM. Fisher (2007) states that thirty-six (36) African
countries have so far legalised ASM or are in the process of doing so. However, despite
such legislation in place many ASM activities in SSA continue to operate outside the
provided legal frameworks, an issue that raises great concern.
This chapter critically examines the efforts made to formalising ASM in SSA. It provides
a conceptual framework of ASM highlighting the relationship between ASM and LSM,
and brings out the dual nature of ASM. In addition, it discusses some underlying reasons
that make ASM unsustainable and unacceptable as far as many interest groups are
concerned, while at the same time presenting its economic importance and contributions.
7
Furthermore, it looks at the benefits that accrue to both artisanal miners and governments
in a formalised ASM environment.
2.2 CONCEPTUALISING ARTISANAL AND SMALL-SCALE MINING
Artisanal mining has been part of many African traditional subsistence systems for
centuries. For some, it had been as much a part of tradition as a culture because of the
importance of minerals like copper, gold, diamonds and salt to the people and kingdoms.
In addition, to maintain friendly ties with neighbouring kingdoms, people often engaged in
trade exchanging minerals for commodities their kingdoms did not produce. Trade also
extended to people from different regions and continents (Munnik, 2005; Obara and
Jenkins, 2006). Even when LSM was undertaken by governments under state-controlled
corporations, artisanal mining continued to exist although it operated in the background
without regulation (Hilson, 2005; Fisher, 2007).
However, in the last two decades the ASM sector has experienced unprecedented growth
and expansion (Shen and Gunson, 2005). This expansion in ASM has in turn created a
high demand for mineralised land as well as caused massive environmental destruction.
The expansion of ASM has been fuelled by many actors. First, the economic reforms
supported by the World Bank and IMF across SSA have resulted in the privatisation and
closure of many SOEs causing massive employment losses (Banchirigah, 2006).
According to Hilson and Potter (2005) a total of 278,000 jobs were lost in Ghana between
1985 and 1991. In Zambia, 8000 mining jobs were lost when between 1992 and 1999
(Kangwa, 2001).
8
Due to poor macroeconomic performance, many SSA countries undertook economic
reforms in the form of structural adjustment programmes
3
(SAP), which were meant to
stimulate economic growth and development (Akabzaa and Darimani, 2001; Haselip and
Hilson, 2005). Many SOEs were privatised resulting in employment losses through
redundancies (Hilson, 2004; Kambani, 2003a). For this reason, the post-SAP period has
been marked by unprecedented high levels of unemployment and poverty which to date
continue to ravage the region despite reported economic successes in the minerals sectors
(Hilson, 2004). Haselip and Hilson (2005) argue that at the time of implementing SAP,
countries were facing numerous economic crises and did not have any support
programmes to act as safety nets
4
to cushion the impacts of SAP on vulnerable people.
Nonetheless, in order to survive and escape abject poverty many people have joined the
already existing artisanal mining communities, and hence the rapid expansion of the
informal mining sector.
Second, the economic policies adopted by individual SSA governments have acted as an
incentive for increased illegal mining activities (Fisher, 2007). Prior to SAP, many mining
SOEs had suffered numerous shocks ranging from mismanagement to non-capitalisation.
Some had closed down while others were on the verge of collapse (Davis, 1995; Craig,
2001). In order to attract foreign investment for recapitalising the mines, governments
rapidly liberalised their mining policies and also introduced attractive incentives for
foreign multinational corporations (MNC) (Munnik, 2005; Campbell, 2003; Godoy,
1985). As a result of good investment environment, there has been an influx of MNCs, and
subsequent increases in LSM activities and demand for mineralised land, which in turn has
caused a shortage of land available to local artisanal miners (Obara and Jenkins, 2006).
3
Liberal economic policies designed by World Bank specifically for developing countries, to assist them
with economic recovery.
4
Deliberate social programmes set up to provide support to vulnerable groups of people.
9
Since mining takes place where mineralization occurs, many indigenous communities
have been displaced to pave way for LSM. This has in turn disrupted and undermined their
livelihoods and ways of life (Hilson, 2002e). As a consequence many people have resorted
to illegal mining on concessions because they have no other alternative sources of
livelihood. Meanwhile, illegal mining on concessions has thus also become a cause of
conflicts between LSM companies and artisanal miners, and sometimes may result in
violent clashes and damage to property (Hilson, 2002e; Haselip and Hilson, 2005).
Finally, the rising prices of mineral on the international market have contributed to the
expansion of illegal mining (Yakovleva, 2006). Gibb (2006:44) argues that the expansion
of ASM is “symptomatic of much larger fluctuations in the global economy that have
preceded a reorganisation of the global mining industry”. The increasing global demand
for minerals like diamonds, emeralds and gold, cause prices of these minerals to rise on
the market. Therefore, many people are attracted by these high prices hoping to make a
quick fortune. Illegal mining gives them that opportunity since they do not have to go
through the procedurally long registration processes.
2.2.1 DUALITY OF SMALL-SCALE MINING
Mining reforms in developing countries have given rise to the emergency of a dual
economy
5
within the mining sector; an economic segmentation that separates LSM on one
hand enjoying overwhelming government and World Bank support, and ASM on the other
hand, marginalised and ignored (Banchirigah, 2006) (See figure 2.1 for illustration of
economic segmentation). Based on Fisher‟s (2007) analysis of social exclusion,
6
mining
reforms have paved way for socially excluding artisanal mining from fully participating in
5
An economic segmentation between small- and large-scale mining within the mining sector (See Figure 2.1
below).
6
A situation that prevents individuals and groups from asserting their rights and fully participating in social,
economic and political decisions that affect them.
10
the formal economy. The sector has been further marginalised through the lack of access
to factors of production.
7
For this reason, the two mining sectors have developed apart
from each other; although sometimes they are brought together by conflicts and disputes,
which government mediates. Nonetheless, while these two sectors grow apart and compete
for the same resources, ASM has continued to gain momentum so that at present it is one
of the world‟s largest employers of labour (Hilson, 2003, 2006; Baartjes, 2006).
Figure 2-1: Economic Segmentation of the mining sector
Minimal interaction between SSM and LSM but mostly confrontational
Symbiotic interactions between registered small-scale and artisanal mining
Source: Author‟s interpretation
Another duality though exists within SSM, involving registered and illegal mining
operators. According to Kumar and Amaratunga (1994) the former operate registered
businesses with mining licenses and may even have legal titles to land that they work
whereas the latter often called artisanal miners, operate illegally on land they hold no legal
titles to. Furthermore, artisanal mining usually involves individuals or families who rely
on manual operations, whereas registered SSM is more extensive and mechanised in
7
Refer to land rights, mineral resources, credit facilities, training and information.
Mining sector
Large-scale
mining (widely
supported)
Small-scale
mining (neglected
and disorganised)
Registered small-
scale mining
Illegal small-scale/
Artisanal mining
11
comparison to artisanal mining (MMSD (2002). Artisanal mining is also characterised by
“a vicious poverty cycle: discovery, migration, and relative economic prosperity are
followed by resource depletion, out-migration and economic destitution” (UNIDO, 2003:
unpaged; Hinton, 2005). Nevertheless, these two groups usually operate side by side
because some informal operators rely mainly on tailings from formal mining operations.
Apart from the levels of technology and legal status that differentiate formal and informal
SSM operations, the two have other common characteristics (MMSD, 2002). These
include: exploitation of marginal deposits; lack of capital; being labour-intensive, with low
levels of mineral recovery; poor access to markets and support services; low standards of
health and safety; and environmental degradation. For the purpose of his thesis, focus is on
artisanal mining; an activity that continues to operate illegally even in the presence of
legislation.
Artisanal mining involves the extraction of high unit value minerals (Hilson, 2002b). This
is perhaps one of its most distinguishing characteristics. Industrial minerals and
construction materials are also mined, but it is the high unit value minerals that are of
utmost economic importance to miners because they offer the prospect of quick
enrichment (Kambani, 2003c; Hilson and Van der Vorst, 2002). These minerals are easy
to extract; less bulky, thus making them easy to conceal and transport within and outside
legal borders; and they are easy to sell and fetch good prices (ECA, 2003; Hilson, 2002b).
Another feature of artisanal mining is that it is a poverty-driven activity which takes place
mostly in remote rural areas of developing countries (Labonne, 2003; Gunson and Jian,
2001). It is dominated by poorly educated people with little or no employment
opportunities (Andrew, 2003; Haselip and Hilson, 2005; Dreschler, 2001). Artisanal
mining can thus be permanent, seasonal, poverty-driven or simply „rush‟. According to
12
Gyan-Baffour (2003) permanent artisanal mining may involve people who live adjacent to
LSM companies and have settled there after realising that they make more annual incomes
from mining than from other sources. In addition others take on permanent mining
because it is the only livelihood available for their survival.
Seasonal mining usually involves the movement of people into mining areas during off
agricultural seasons for the purpose of finding alternative sources to supplement their
annual incomes (Gyan-Baffour, 2003; Kitula, 2006). The income generated from this type
of mining may be used to expand agricultural investments or even used as capital to start
other non-agricultural investments (Shoko, undated; Gyan-Baffour, 2003). Poverty-driven
mining consists of people who have suffered one kind of shock or another; redundancies,
floods or the like (Gyan-Baffour, 2003; Haselip and Hilson, 2005). This type of mining
provides immediate relief especially during periods of economic recession (MMSD,
2002). For instance in Zimbabwe, the number of artisanal miners involved in gold panning
along the Zambezi River has rapidly increased due to the economic hardships the country
is faced with (Shoko, undated). The choice of mining over other sources of livelihood is
based on perceptions of minimal investment costs and anticipated high payoffs.
Lastly, „gold rush‟ mining is triggered mostly by the discovery of new mineral deposits
and rising market prices of minerals, and practiced by opportunists seeking to become rich
quickly (MMSD, 2002). Gyan-Baffour (2003:3) argues that “the rush is usually the result
of a perception that the expected income in mining…far exceeds the current actual income
of the people who are lured into it”. This kind of mining causes short-term concentration
of miners in a particular area (Weber-Fahr et al., undated), and because they have to
maximise their incomes to validate their perception, they tend to use mining methods that
cause serious injuries to humans and damage to the environment (Gyan-Baffour, 2003).
McMahon et al., 1999) argue that in such cases therefore, most attention should be paid to
13
environmental problems with long-run effects, such as mercury stocks and ARD from
depositing tailings in poorly constructed tailings ponds.
2.2.2 MOTIVATIONS FOR FORMALISING ARTISANAL MINING
Artisanal mining can be viewed as an excellent means for diversifying rural economies,
but its associated problems “threaten to undermine its credibility as a precursor to national
and locally based socioeconomic development” (Gibb, 2006:42). Fisher (2007) and
Kambani (2003b) argue that artisanal mining causes a host of social, environmental and
economic problems. For this reason it has provoked much debate and controversy among
interest groups, who have raised concerns on the sustainable or unsustainable nature of
artisanal mining and even questioned the benefits associated with it (Gibb, 2006). The call
to formalise artisanal mining has mainly been a cry in response to its associated problems.
First, artisanal mining causes environmental problems such as indiscriminate disposal of
faecal waste and tailings, contamination and pollution of water bodies and soils (Pardie
and Hilson, 2006). In addition, because of its widespread geographical locations artisanal
mining causes a great deal of landscape destruction (Munnik, 2005). Gunson and Jian
(2001) argue that mined land becomes permanently altered that it can no longer be used
for other purposes such as farming. The pits that are left open often become hazards to
both humans and animals, especially when they are with water; they also serve as breeding
grounds for mosquitoes (Bunker, 1984; Aryee et al., 2003).
Furthermore, artisanal mining activities may also disturb the water-table, geological
stability and surrounding ecosystems. Lombe (2003) argues that activities such as gold
panning along rivers may alter riverbeds and cause siltation which would affect the river
flow. For instance, gold panning which occurs on the riverbeds of the Zambezi River in
14
Southern Africa causes heavy siltation, making the river shallower and shallower each
year. According to Shoko (undated) the 2000 floods that devastated many parts of
Mozambique, Zambia, Zimbabwe and South Africa were as the result of the Zambezi
bursting its banks partly due to siltation. In addition heavy metals and chemicals like
mercury and cyanide respectively, also end up in water bodies causing serious damage to
both aquatic life forms and humans (Lombe, 2003).
Environmental degradation is the most visible of the negative impacts associated with
artisanal mining (Kambani, 2003b). While it may be argued that LSM is as destructive as
ASM, the scale of destruction caused by ASM is higher than that caused by LSM because
ASM spans over large areas since many miners keep moving from site to site in search of
new mineral deposits, leaving a trail of destruction behind (Shoko, undated; Dreschler,
2001; ILO, 1999; UNIDO, 2003). Hentschel et al. (2003) adds that ASM is dirtier per unit
of output than medium-sized or LSM.
Second, artisanal mining also causes socio-cultural disturbances (McMahon et al., 1999).
The discovery of new mineral deposits brings with it a host of other problems. Many
people from different socio-cultural backgrounds migrate to mining areas in search of
wealth, bringing with them different sets of cultural values and norms. Sometimes there is
a clash of cultures, which may result into social and legal conflicts (Avila, 2003).
Furthermore, artisanal mining with its promise of quick wealth, also acts as a pole of
attraction for criminal activities like money laundering, substance abuse, theft and
prostitution (Dreschler, 2001; ILO, 1999). Gyan-Baffour (2003:4) adds that “because of
breakdown in law and order in most of these mining areas those who have some savings
tend to spend a lot of their savings on alcohol, prostitution, and gambling at the expense of
productive investment”. For this reason high rates of prostitution, crime and sexually
15
transmitted diseases like HIV/ADIS in mining communities have been reported
(Banchirigah, 2006; Fisher, 2007).
Furthermore, artisanal mining threatens the food security in many rural communities. The
promise of quick enrichment often pulls potential prospectors away from their traditional
income generating occupations like farming into mining (Gyan-Baffour, 2003), thereby
depriving the agricultural sector. Yakovleva (2006) explains that in Ghana, some women
have abandoned farming in preference for galamsey
8
work where they hope to make
enough money and go back into farming. In SSA women are the ones who are mostly
involved in farming especially subsistence farming and are therefore more conversant with
matters of food security. However, their involvement in mining is likely to affect the food
security situation.
Third, the standard of occupational health and safety (OHS) in artisanal mining is very
poor (MMSD, 2002). Munnik (2005) argues that miners work in very appalling
conditions, thus putting themselves and others at risk. While the sector provides
employment to at least 1% of the world‟s total workforce, it is also responsible for at least
8% of the world‟s industrial accidents (Hilson, 2002b). Mine accidents range from rock
falls, mines carve-ins to flooding while health hazards include mercury poisoning and
silicosis (Jennings, 1999; Hentschel et al., 2003).
A combination of factors for this high occurrence of accidents is true. Since many miners
are poorly educated, they lack knowledge about mining and are therefore unaware of the
risks associated with it. They also lack guidance on the usage and handling of explosives
and toxic chemicals like mercury and cyanide (Hentschel et al., 2002). As a result, they
tend to misuse the chemicals and explosives, thereby exposing themselves and their
8
Means gather them and sell, and refers to illegal miners in Ghana
16
communities to many hazards. Poor sanitation is another major health problem on ASM
sites. Because of the transient nature of artisanal mining, miners do not construct sanitary
facilities. For this reason infectious water-borne diseases like bilharzias and diarrhoea are
rampant in resident mining communities (Fisher, 2007).
Finally, despite many countries in the world having ratified the ILO Convention 182
„Eliminating Worst Forms of Child Labour‟ (MMSD, 2002) child labour appears to be the
norm in many SSA countries where artisanal mining exists. Large numbers of children are
involved in ASM in SSA as in other developing countries (Hentschel et al., 2003).
Although the exact number of children involved is not known, it is estimated that over two
million children worldwide are involved in mining (ILO, 1999; Hinton, 2005).
The poverty nature of artisanal mining means that for families involved in it for survival
every member of the family including children must participate. Labonne (2003) explains
that where artisanal mining is a family affair the smallest children are used to chisel out
minerals in the narrow sections of the tunnels. The children‟s parents often claim that
children are involved in mining because they have no money to send them to school or
that there is no school infrastructure nearby (Hentschel et al., 2003). However, Hinton
(2005) argues that the participation of children in artisanal mining puts them in hazardous
working conditions and leads to neglect of their education.
2.2.3 IMPORTANCE OF ARTISANAL MINING
The numerous problems associated with artisanal mining provide a good basis for banning
it. Some interest groups have described artisanal mining as nothing but a primitive type of
mining with a host of problems (Barry, 1996), and hence support the notion of banning it.
It has further been argued that the benefits claimed to come from artisanal mining are very
17
marginal in relation to the damage it causes to the general environment. In addition, it is
argued that for many of the people involved in artisanal mining, their earnings do not go
beyond subsistence, and for that reason it is cannot be sustainable.
McMahon et al. (1999) argue that at times the apparent unprofitability (fruitlessness) of
artisanal mining may be due to biased analysis that does not consider the risk reducing
nature of the activity. Often times mining income supplements other incomes and this is
common in joint production where a “person allocates their labour to mining and
agriculture in a way to maximise a utility (personal or family well-being) function which
includes both income and the variance of income. The low return to mining can be
justified if the opportunity cost of the miner‟s time is very low in certain seasons or if it
helps reduce the risk of catastrophe in the case of, for example, a bad agricultural season”
(Ibid, 1999:10). Nevertheless, artisanal mining has some positive aspects which would
make banning it inappropriate.
First, artisanal mining provides employment opportunities to millions of people across
SSA (See table 2.1) (Hilson, 2006). ECA (2003) and Andrew (2003) state that in SSA
there are 3-4 million people directly employed in ASM and a further 16-28 million people
who depend on it for their livelihoods. Although there has not been any field censuses
conducted to determine the actual numbers of people involved in the sector (Hilson and
Maponga, 2004), the bottom line is that the number of people involved in ASM is quite
large (MMSD, 2002). D‟Souza (2002) states that in fact the number of people subsisting
on SSM is likely to rise significantly in the next few years provided the trend of
underperformance in many mineral economies in SSA continues.
18
Table 2-1: Selected Sub-Saharan African Countries
Country
Number of
Mines
% of illegal
mines
Estimated
employment
Burkina Faso
35-60
±20
60,000-70,000
Burundi
-
-
10,000
Central African Republic
-
-
45,000
Chad
2000
-
10,000-15,000
Cote D‟Ivoire
-
-
10,000-25,000
Democratic Republic of Congo
-
-
150,000
Ethiopia
-
-
>100,000
Ghana
400-700
10-50
50,000-300,00
Guinea
-
±80
40,000
Kenya
-
±10
30,000-40,000
Madagascar
83
-
5,000-20,000
Malawi
-
-
40,000
Mali
-
-
100,000
Mozambique
150
±95
440,000
Namibia
20
±15
5,000-10,000
Niger
150
>95
440,000
Nigeria
-
-
10,000-20,000
Rwanda
-
-
5,000-15,000
Senegal
-
-
3,000
Sierra Leone
-
-
30,000-40,000
South Africa
5,500
-
10,000
Tanzania
4000
40-50
450,000-600,000
Uganda
-
-
5,000-10,000
Zambia
200
±15
20,000-30,000
Zimbabwe
2000-5000
±30
50,000-350,000
Sources: ILO (1999: 8-9); MMSD (2001:6); Hilson (2006:44)
Artisanal mining is lowly mechanised and depends largely on rudimentary tools and
practices in extracting and processing of mineral ores (Gunson and Jian, 2001; Andrew,
2003; Hilson, 2002c). It thus requires a great deal of manual labour to perform many tasks
and for this reason it creates many employment opportunities to rural people. Currently,
ASM employs over 13 million people and affects the livelihoods of close to 100 million
others worldwide (MMSD, 2002; Hentschel et al., 2003; Logan, 2004).
Through the provision of employment, artisanal mining is able to contribute to livelihoods
and poverty alleviation (Labonne, 2003; Shoko, undated). However, this is dependent on
how the resources and proceeds are utilised by miners. Labonne and Gilman (1999:1) state
19
that “where there is access to resources, the challenge is to improve organisation and
techniques and channel some of the resulting proceeds and income to spur alternative
sustainable productive activities”. Although, the quality of livelihoods provided may be
questioned for it cannot be easily measured, but quantitatively artisanal mining has been
able to provide many employment opportunities as shown in table 2.1.
Furthermore, the availability of employment opportunities in the rural areas has
contributed to the reverse trend in rural-urban migrations in some countries (Pedro, 2004;
Hilson, 2002b; Kumar and Amaratunga, 1994). Many rural people are able to find
employment in the rural mines, and therefore do not find it necessary to look for
employment in the cities. If anything, the opposite is true; some unemployed urban-
dwellers are relocating to the rural areas in search of employment and wealth in the ASM
sector.
Second artisanal mining plays a pivotal role in the development of local economies by
promoting and stimulating growth in other areas of the economy within and outside
mining areas (Shen and Gunson, 2006; ILO, 1999). Mining operations are usually locally
owned and thus all the money generated tends to remain in the community generating
local purchasing power which in turn triggers various production chains leading to
demand for and supply of locally produced goods and services (Pedro, 2004; Andrew,
2003). Furthermore, artisanal mining tends to be geographically widespread and therefore
encourages geopolitical development (Avila, 2003), as well as catalysing rapid small and
medium enterprises (SMEs) development (Pedro, 2004). Artisanal mining activities have
in some instances attracted large-scale investment and infrastructure development, thereby
opening up little-known areas for economic development.
20
Finally, artisanal mining contributes to government revenue through direct and indirect
taxes, and thus contributes to the national gross domestic product (GDP) (Hinton, 2006;
Bunker, 1984). The few operators who are registered contribute through license fees
whereas the illegal miners contribute through sales and unclaimed value added tax (VAT)
returns on inputs they buy. In fact for some governments, the inertia to move quickly on
formalising the sector has been motivated by huge benefits from unclaimed VAT refunds
(Hentschel et al., 2002).
Unless illegally marketed, the high-value minerals mined by artisanal miners are bought
by government marketing agencies, and thus contribute to generating the much needed
foreign currency (Hilson, 2001). Estimates show that in SSA, the sector generates about
US$1.0 Billion annually from legally traded and marketed gold and gemstones (ILO,
1999; Hilson, 2002b). DDI (2005) adds that artisanal miners produce US$ 1.0 Billion or
more worth of diamonds each year. Therefore, if the sector was fully formalised it would
generate even more income which could be used for development in the region.
2.3 BENEFITS OF FORMALISING ARTISANAL MINING
The overall objective of formalising artisanal mining is to make it operate as an organised
and co-ordinated sector (MMSD, 2002; Bugnosen, 2003). As an informal entity artisanal
mining is not recognised by most governments and hence lacks assistance for
development. For this reason the sector continues to develop in isolation and chaotic
manner (Pedro, 2004). At a workshop held in Lima in 2003, participants identified two
strategic objectives for formalisation of artisanal mining; to turn it into a formal, organised
and profitable activity that uses efficient technologies, and is socially and environmentally
responsible; and to make it develop within the context of governance, legality,
participation and respect for diversity (Barreto, 2003).
21
Therefore, if these objectives are to be met, the challenge is for governments to focus on
enhancing and reinforcing artisanal mining‟s positive aspects while minimising its
negative impacts (Fisher, 2007). In this regard, a total of 36 African countries have
formalised the artisanal operations or are in the process of doing so (Ibid, 2007). Specific
administrative and technical offices to provide assistance to the sector have also been
established. However, regardless of all these efforts illegality continues to reign in the
sector hence rendering it to be largely informal. Kambani (2003c) estimates that more than
50% of all small-scale mining activities operate illegally. The biggest challenge therefore
is how to successfully integrate artisanal mining into the “mainstream economic, fiscal,
regulatory and legal regimes” (Fisher, 2007:736).
For many governments formalisation of ASM has just concentrated on provision of the
legal framework and issuance of mining licenses. Barreto (2003) argues that in order to
succeed in transforming ASM into a viable sector capable of contributing to the
development of the economy, formalisation must cover a wide concept that transcends
regulations and licensing. Governments must take a holistic approach that focuses and
addresses issues that reflect the needs and nature of the sector (DDI, 2005).
2.3.1 MINERS’ PERSPECTIVES ON FORMALISATION
For the majority of artisanal miners formalisation offers numerous prospects. First, miners
expect an improvement in accessibility to credit facilities, markets and technology. Every
artisanal miner wishes to upgrade oneself from being subsistence
9
to a commercial
producer. However, this has not been possible for many miners because they lack access
to credit facilities. The illegal environment in which they operate precludes them from
9
Involves production of minerals sold to earn money just to meet the basic needs.
22
getting bank loans or any other form of financial assistance (Gyan-Baffour, 2003).
Artisanal mining is considered to be a high-risk investment, and financial lending
institutions are not willing to take such risks (Mutemeri and Petersen, 2002). For this
reason, miners are not able to improve their technologies which would enhance their
overall productivity and output (MMSD, 2002). For there to be improvement in
productivity and output, there must be corresponding increases in the efficiency of factors
of production
10
employed. Formalisation would give artisanal mining legitimate status and,
thus enable lending institutions render financial assistance to miners.
Second, as earlier stated OHS is not given much priority in artisanal mining. Unless
operators have previously worked in large mining companies, they are unaware of the
dangers of mining (MMSD, 2002). Thus they do not take precautions like wearing hard
hats and safety boots. In addition, the conditions in which they work are appalling
(Andrew, 2003) and hence the many accidents and disease outbreaks. Furthermore, labour
standards are also poor with unacceptable work practices being so rampant. Yakovleva
(2006) argues that the working conditions especially wages, are not standardised and cites
the example of women who are usually compensated far less than their male counterparts.
Although women are not involved in heavy duties like digging (Hentschel et al., 2003),
their wages are not commensurate to the amount of work they do (Yakovleva, 2006).
However, because of high levels of poverty many people are forced to work in these poor
conditions for very minimal wages just for their survival (D‟Souza and Jennings, 2005).
As regards unacceptable work practices, ILO (1999) argues that artisanal mining involves
child labour with children as young as three years old. The involvement of children in
mining puts them in dangerous working conditions and poses risks to their health
10
Refer to resources used in the extraction and production of mineral ores; capital, plant and equipment and
entrepreneurial skills.
23
(Hentschel et al., 2003). In addition, children are denied the opportunity to go to school
thus condemning them to a future with no employment alternatives other than following
the footprints of their forefathers before them in artisanal mining. Therefore, formalising
artisanal mining would facilitate improved working conditions including decent wages,
and eliminate unacceptable work practices (Hilson, 2002c). Mine owners would not only
be compelled to observe high standards of OHS, but would also ensure that fair and
equitable working conditions are put in place, and that child labour is eradicated.
Third, formalisation offers the benefit of accessing education and skills training. The high
rate of accidents among miners and their communities are mostly due to ignorance of
dangers associated with mining (MMSD, 2002). Since many people involved in artisanal
mining are poorly educated, they lack knowledge about mining and are often unaware of
the risks involved. Furthermore, miners lack technical knowledge on mining operations
and ore assessing techniques. For this reason, many are not able to produce beyond a
subsistence level. Hilson (2002d) argues that for artisanal miners to increase the output of
processed ore, they need technical training and advice on the assessment of ore grades and
mining practices. Moreover, poor education excludes miners from networking with
marketing agencies because they lack marketing and management skills (Mutemeri and
Petersen, 2002; Andrew, 2003). For this reason they are not able to connect themselves to
the best buyers or manage simple accounts for their businesses
Formalisation of artisanal mining would facilitate linkages between governments, local
and international organisations concerned with poverty alleviation such as DFID and GTZ.
It is hoped that these organisations would provide artisanal miners with access to
education and skills training in areas necessary for their operations. As the adage states, an
educated nation is a wealthy nation so will an educated artisanal mining sector be a pool
of wealth contributing to the development of national economies.
24
Finally, miners hope to have access to secure tenure. Lack of security of tenure
11
is the
biggest problem that artisanal miners face and is perhaps the main driving force behind
illegal mining in SSA (Hilson and Potter, 2003). The issuance of large concessions (on
land already inhabited by artisanal miners) to LSM companies by governments has caused
serious shortages of suitable land available to artisanal miners (Obara and Jenkins, 2006;
Hilson and Potter, 2003). Sometimes governments give alternative land to miners but
usually the plots are not geologically surveyed and the land has no mineral deposits
(Hilson and Maponga, 2004). Inaccessibility to suitable land therefore becomes a
disincentive and for this reason, artisanal miners‟ ability to register is restricted.
2.3.2 GOVERNMENT’S PERSPECTIVES ON FORMALISATION
Formalisation of ASM also has benefits for governments. First, where artisanal mining is
organised and co-ordinated, it becomes easier to detect illegal activities. Therefore, for
governments formalisation promises the prospect of eradicating and curbing illegal mining
and trading, and smuggling. Illegal mining breeds numerous problems. For instance, in
some SSA countries illegally mined and traded valuable minerals have sponsored conflict
and civil wars (USAID, 2005). In Liberia, Angola, Sierra Leone and the Democratic
Republic of Congo (DRC), proceeds from black diamond
12
have provided funding for
procurement of weapons and other resources used in both intra- and inter-state conflicts
(Hofstatter, 2001; Renner, 2003). In the DRC, coltan
13
has also been identified as another
source of potential conflict as different groups fight for its control (Mustapha et al., 2007).
In addition, illegal trading and smuggling denies governments of large sums of money.
Kambani (2003c) estimates that in Zambia, DRC and Zimbabwe, high unit value minerals
11
Encompasses access to land and mineral rights; transferability of rights, and period of tenure.
12
Refers to diamond mined and traded illegally and often used to finance clandestine activities
13
Refers to columbite-tantalite, which when refined into tantalum, is used in electronic equipment especially
mobile phones.
(See http://www.survivorsrightsinternational.org/drc/DRCpetition.pdf )
25
valued at US$ 200-300 million, 400 million and 3 million respectively, have been traded
illegally. Therefore, it is in every government‟s interest to curb illegal mining and illegal
trading.
Second, formalisation of ASM would enable governments broaden their revenue bases
(Bugnosen, 2003). In many SSA countries, very few people are in formal employment
following various economic restructuring programmes. This means that the tax burden lies
on very few people who are also heavily taxed. If the ASM sector were formalised, it
would be eligible to pay taxes for all its employees hence contributing directly to
government tax revenues. Government would then be able to provide better services to
mining communities using part of the tax revenue, provided there is equitable sharing of
resources.
Third, formalisation of artisanal mining renders legitimacy of its existence and would thus
enable governments to provide miners with access to secure land and mineral rights
(Philips, 2007). McMahon et al. (1999) argue that the establishment of well-defined
property rights would be more helpful as miners would use their rights as collateral to
access credit elsewhere. In addition, inefficient and environmentally unsound techniques
are often a direct result of inadequate property rights (Gyan-Baffour, 2003), but having
secure rights would encourage miners to be environmentally responsible as the penalties
would have already been stipulated to them in the agreements. Furthermore, access to
secure claims would not only act as an incentive for miners to invest in their operations
but also to operate within the confines of the sector‟s legal framework.
26
Fourth, formalising the ASM sector would enable government provide extension services
14
to miners thereby helping them improve their production capacity and incomes. Granville
(2001) cites Tanzania where extension services have worked for the benefit of miners.
There are twenty mine offices which offer extension services to small-scale miners. In
Zimbabwe, mine geologists are available to offer free geological information to miners. In
addition geologists undertake routine visits to mine sites to help miners with geological
issues (Ibid, 2001).
Finally, governments hope to foster environmental responsibility among miners.
Environmental degradation is one major concern discussed in many forums (Hilson,
2002b), and perhaps a major reason why many interest groups advocate for banning
artisanal mining. The most serious environment impacts include cyanide and mercury
contamination, acid rain damage (ARD) from tailings, deforestation and landscape
destruction among others (McMahon et al., 1999). Philips (2007) states that formulating
sound environmental regulations and policies alongside providing miners with training in
environmental issues would ensure environmental responsibility among them. Hilson
(2002b) adds that effective monitoring and enforcement programmes are fundamental to
fostering environmental responsibility among miners.
2.4 CONCLUSION
The unprecedented growth and expansion of ASM activities in SSA in the last twenty
years have been attributed to various factors including economic reforms that have seen
many SOEs privatised; liberal economic policies undertaken by individual governments;
and fluctuations in the global mining industry and market. While the mining sector
reforms have opened up the mining sectors and created many opportunities for MNCs,
14
Include mining practices, environmental management, business management and administration, and legal
issues
27
they have also caused an economic segmentation between SSM and LSM, making the sub-
sectors develop apart from each other. In the meantime, another duality within SSM has
developed comprising registered operators and illegal operators called artisanal miners.
Although, the relationship between registered operators and artisanal miners is more
symbiotic than confrontational as it often is between LSM and SSM.
Despite the many positive contributions of artisanal mining; employment creation, tax
revenue and foreign currency needs, and catalysing local economic development, it also
causes a host of problems. The problems include environmental degradation, poor health
and safety standards, socio-cultural fragmentation and child labour. These are some of the
reasons governments seek to formalise artisanal mining so that it operates in an organised
and co-ordinated manner, and also the same reasons advocates call for its banning.
However, governments have recognised the immense contributions of artisanal mining to
national economies. Hence, banning it would be totally inappropriate. Instead, formalising
artisanal mining would help create a conducive environment for it to develop into an
organised sub-sector and contribute to sustainable development and livelihoods.
As a result many governments in SSA have formalised ASM, opening up a window of
opportunity for its organised development and integration into mainstream economic
development. However, despite the presence of legislation illegal mining continues to be a
big problem, with estimates indicating that over 50% of all ASM activities operate
illegally. Two major factors have been identified as contributors to this situation and these
are defective legislative policies and lack of government commitment to ASM.
Notwithstanding, formalisation offers numerous benefits to both miners and governments.
For the artisanal miners formalisation entails improved access to appropriate technology,
markets and credit facilities, access to education and skills training, improved labour
28
standards and OHS, and access to secure tenure. As for governments, formalisation
provides the prospects of eradicating and curbing illegal mining, trading and smuggling,
increased tax revenue and foreign currency. In addition, governments would be able to
institute and regulate OHS, provide extension services to the miners and also foster
environmental responsibility among miners.
29
CHAPTER 3 CHALLENGES FACING FORMALISATION OF ARTISANAL AND
SMALL-SCALE MINING
3.1 INTRODUCTION
Countries which have tried to ban artisanal mining have not succeeded because it is purely
a poverty-driven activity; and likely to go on as long as poverty is around (MMSD, 2002).
If anything closures only breed more illegality as miners would operate „underground‟
15
making contact with government impossible (Burke, 2006). At present artisanal mining is
simply a livelihood strategy adopted by most rural people, who also have a right to
suitable livelihoods and their right to survival must be respected. However, the
environmental problems caused by artisanal mining normally force governments to ban it
through different means like simply neglecting it or even using brutal force (Andrew,
2003). Despite such extreme actions the very problems governments are concerned about
still continue (MMSD, 2002).
Regardless of its illegal status and associated socio-economic and environmental
problems, artisanal mining plays a vital role in the economic development of many SSA
countries. Not only does it provide employment to large numbers of people, it also
contributes to countries‟ revenue base and foreign currency needs, and provides mineral
export base. Governments have recognised the importance of the sector, and have been
prompted to formalise artisanal mining. Formalisation therefore, is the best alternative to
banning artisanal mining entirely. By formalising artisanal mining, it would be able to
operate in an organised and co-ordinated manner (Hentschel et al., 2003).
15
Illegal mining is conducted in places where authorities cannot easily find out who is mining and when the
mining takes place.
30
In addition, legislation to regulate the sector and its activities would be put in place, while
facilitating smooth registration of miners through issuance of licenses and permits, and
also facilitating their subsequent organisation through groups or co-operatives
(Heemskerk, 2005). However, in many countries formalisation of the ASM sector has
been faced with many constraints which pose difficult challenges. As Barreto (2003)
argues many countries have not taken a holistic approach to formalise artisanal mining.
Where legal frameworks exist, they have not been dynamic enough to cope with the
demands of miners. Instead, at the most formalisation has only taken the shape of
registration and issuance of licenses. This section examines the challenges of formalising
artisanal mining from the perspectives of both the miners themselves and the
governments.
3.2 MINERS’ PERSPECTIVES
3.2.1 LACK OF SECURITY OF TENURE
The biggest challenge that artisanal miners face regarding formalisation of artisanal
mining is lack of security of tenure
16
(Hilson and Potter, 2003). Miners lack access to
suitable land and mineral rights (Mutemeri and Petersen, 2002), as most mineralised land
has been awarded to MNCs in concessions. Where land has been allocated to miners it has
not been surveyed geologically or otherwise, and it may be without mineral deposits.
Titles are not given on land without a reconnaissance survey, and therefore miners are not
able to get titles on mining plots awarded to them. This inaccessibility to important factors
of production hinders them from investing into their operations, and thus they are unable
to improve their technology and ultimately their productivity and output. In addition since
16
Security of tenure refers to legal provisions that guarantee miners against undue termination of licenses as
a result of changes in political or administrative governance (Deininger, undated).
31
miners do not have the stakes in the land they mine, they have no incentive for managing
the resources in a sustainable manner (Gyan-Baffour, 2003).
There are many reasons that contribute to insecurity of tenure in SSA. Kambani (2003c)
argues that in some countries the law empowers a head of state to hold land in trust for the
people, because land including everything on and beneath it, is for the people of the land.
This means that land cannot be sold to individuals or companies but can be leased for a
specified period subject to stated conditions. Furthermore, in some countries prospective
miners are expected to apply separately for land and mineral rights. Mutemeri and
Petersen (2002) state that in South Africa, following the enactment of the new Minerals
and Petroleum Bill, ownership of mineral rights rests only with the government as sole
owner. Therefore, one‟s access to land does not give one automatic access to minerals
beneath it; separate permits must be possessed to access both land and mineral resources.
Finally, land administration may exist under a multi-tier
17
system (Hilson and Yakovleva,
2007). This arrangement means that even though miners may have licenses to operate,
these could be revoked under another system, especially with change of political and
administrative systems. Security of tenure is quite instrumental in investment decisions
that miners make. Where it is lacking, miners do not have the incentive to invest into or
even be bothered to register their operations. A significant link has been made between
security of tenure and investment decisions made by individuals. In a study involving
farmers in two farming areas in Ghana
18
conducted by Besley (1995), it has been shown
that to a large extent, security of tenure does influence investment choices and is an
important pre-condition for any land-related investment decision. The study also reveals
that the importance of land rights varies across fields. However, Besley (1995:936) argues
17
A situation where more than one land administrative system exists
18
Anloga and Wassa
32
that “given the importance of investment to long-term poverty alleviation, it is important
to understand what, if anything, governments can do”.
Since artisanal mining has been identified as a viable means to poverty alleviation and
sustainable development (Dreschler, 2001), security of tenure is vital if miners are to be
encouraged to invest into their operations and improve their productivity. Land and
mineral rights given to miners must be transferable as this would enable them to use them
as collateral when getting credit (Deininger, undated). The issue of transferability
19
of
rights is very important especially if partnerships are to be encouraged in the ASM sector.
Therefore, in order to reduce the insecurities artisanal miners are faced with, governments
must formalise artisanal mining. Gyan-Baffour (2003) argues that formalising artisanal
mining would enable miners obtain proper legal titles to the land they mine, and in turn,
they would be more responsive to the environment and other problems associated with
their operations. Furthermore, legal titles would enable miners to use them as collateral
when borrowing from lending institutions, and even open up avenues for partnerships.
3.2.2 COMPLEX REGULATIONS AND REGISTRATION PROCEDURES
The laws and legislative regulations governing small-scale mining are unrealistic and
procedurally complex for artisanal miners to comprehend (Mutemeri and Petersen, 2002).
Many miners are poorly educated, and are therefore not likely to understand regulations
unless some interprets them. As a result, some of the miners engage in unacceptable work
practices not out of choice but because they are not able to tell what is good or bad
practice. In addition, the licensing procedures are too bureaucratic and encumbered with
conditions that are more prohibitive and obstructive than productive (Hentschel et al.,
2002; Kambani, 2003).
19
Ability to transfer ownership to another person should one decide to opt out of the business
33
Artisanal miners wishing to register for licenses are subjected to too many bureaucratic
and difficult procedures (Hilson and Potter, 2003). Miners have to visit many offices
moving from one office to another before they can finally get the permit and after long
periods of waiting, a situation that makes the process even more tedious. The whole
process is time consuming and costly on the part of miners who have to spend too much
time visiting registration offices and waiting for licenses. In addition, the costs attached to
securing a mining plot and permit are prohibitively high for miners who do not have
enough money (Obara and Jenkins, 2006). Suitable land for artisanal mining is not readily
available. Therefore to lessen demand, governments tend to charge extremely high prices
for plots. Since miners cannot pay what they do not have, but must go on earning a living,
they rather choose to operate illegally.
These problems act as disincentives for artisanal miners wishing to register and operate
legally (Hilson and Potter, 2003, 2005). However, Obara and Jenkins (2006) argue that the
problems associated with registration and licensing can be solved by making the process
easier and quicker; increasing initial tenure period; and making land available specifically
for small-scale mining
3.2.3 LACK OF ACCESS TO CREDIT FACILITIES
Another challenge for miners regarding formalisation of artisanal mining is inaccessibility
to credit facilities (Mutemeri and Petersen, 2002). Being poverty-driven, artisanal mining
does not generate enough capital of its own for reinvestment and therefore it needs
financial support from lending institutions However, there is reluctance by reputable
investors to engage in the sector because of its volatile and transient nature (DDI, 2005).
For this reason, it fails to attract meaningful credit arrangements because it is considered a
34
high-risk sector (Kambani, 2003c). Besides, lending institutions require borrowers to
provide collateral, but most artisanal miners do not have collateral (Mutemeri and
Petersen, 2002).
Formalisation of artisanal mining therefore, offers a window of opportunity to miners.
Government‟s involvement in ASM through legislation legitimises the sector and offers
credence to it activities (Gibb, 2006). Thus, it would be able to attract credit from external
sources and reputable investors, enabling miners to have access to improved technologies
and maximising mineral recovery (MMSD, 2002). On the other hand, while improved
access to credit gives the miners the opportunity to upgrade and upscale their technologies,
DDI (2005) argues that such improvements could have serious ramifications for the
environment. Improvements in technology could tremendously increase mining activities
thus causing more damage to the environment. Nevertheless, improvement in technology
has some benefits; reduced environmental and health risks if use of toxic chemicals is
minimised and improved efficiency and productivity hence making miners earn more
money for consumption and investment.
3.2.4 LACK OF ACCESS TO MARKETS
Illegal mining and illicit trading and marketing go hand in hand (DDI, 2005). By virtue of
the illegal nature of artisanal mining, miners are not able to access formal markets. For
this reason, in financial terms the sector is dominated by small-time dealers and
middlemen, who also dominate the trading and marketing aspects of most of artisanal
mining. However, in some cases governments have been able to provide market services
through central buying agencies to buy minerals from both registered and illegal miners
(Hilson and Yakovleva, 2007). However, these services have not been adequate in
meeting the needs of miners.
35
Kambani (2003c) argues that first the agencies fix the prices of mineral commodities in
local currency. These prices are not competitive enough and thus, miners do not get value
for their products. Second, since payment is in local currency, miners are faced with the
task of looking for foreign currency when they want to buy equipment for their operations;
this can be a daunting task in countries with strict foreign exchange controls. Finally,
payments to miners are often delayed, a situation which disadvantages miners since they
need their earnings not only for survival but also for ploughing back into the operations
(Kambani, 1995, 2003c).
As a consequence of the problems they go through selling their minerals products to
government, miners become discontented, and thus tend to turn to the black market
20
making it flourish (Hentschel et al., 2002). Although the black market provides ready
market for the miners, it is not meant to benefit them but the middlemen. The system‟s
continued existence has depended on manipulating miners many of whom have been
ripped off (DDI, 2005) and become so heavily indebted that they find themselves working
only to pay off debts to creditors. For this reason, they are not able to produce beyond
subsistence, and hence they are trapped in a vicious cycle of poverty shown in figure 3.1
below (MMSD, 2002; Hilson, 2006).
20
Illegal market and trading systems mostly for high unit value minerals and convertible foreign currencies
36
Figure 3-1: Poverty Trap
Source: Hilson (2006:32)
Formalising artisanal mining without putting corresponding effective and efficient
marketing systems in place would not serve the miners because they would still trade with
middlemen. As long as the existence of middlemen continues, miners would not get the
benefits from their minerals. According to DDI (2005) one way of ensuring that minerals
mined actually benefit miners and their communities is by reducing or eliminating the role
and stranglehold of the middleman. Gyan-Baffour (2003) argues that governments should
offer fair and better prices based on international prices for minerals sold to buying
agencies. Fair prices would serve as an incentive for miners to avoid illegal trading or
smuggling, and sell their minerals to government agencies.
Too many miners
Limited resources
(Land and minerals)
Low productivity
Environmental
degradation,
Health and safety
hazards
Low income
No investment
opportunities
Inappropriate
Technology
37
However, not all government marketing systems have failed to meet the aspirations of
miners. The Shamva Mining Centre (SMC) which was established in 1989 as a joint
initiative between the Zimbabwean Ministry of Mines, ITDG, SSMAZ, GTZ, DFID and
the EU, provides a central milling and processing plant to small-scale gold miners
(Hentschel et al., 2003). In addition the centre provides training and skills in mining,
environmental management, geology, marketing, legal and business administration.
Dreschler (2001) states that as a result of the improvement and efficiency in gold recovery
methods, miners have recorded remarkable increases in their productivity with some
recording as high as 30%. Furthermore, miners need not look for markets on their own for
their gold because the centre provides a ready market for them. Hentschel et al. (2003) add
that the fees which miners are charged for ore processing are directly related to the final
price at which their gold is bought by the Zimbabwe Reserve Bank (ZRB). Provision of a
ready market at the centre has enabled miners to have less dependence on the middlemen.
3.2.5 LACK OF GOVERNMENT SUPPORT
There is insufficient institutional support for artisanal miners (Mutemeri and Petersen,
2002). As DDI (2005) states while governments have recognised the immense
contribution of artisanal mining to their economies, little has been done to improve the
working conditions of the miners. Unlike LSM which has received tremendous support
from both governments and the World Bank (Munnik, 2005; Akabzaa and Darimani,
2001), artisanal mining has virtually been ignored in spite of its demonstrated potential to
contribute to the development and growth of local, national and regional economies
(Hilson and Potter, 2003). Although it may be argued that efforts have been made to
improve its operations and even localise its activities, these efforts have not been adequate
to rationalise its transition into the formal economy (Hilson, 2002b).
38
Gyan-Baffour (2003) argues that cycle of poverty into which miners find themselves has
been exacerbated by governments‟ failure to recognise and mainstream artisanal mining
activities. This has been demonstrated in the manner in which registration is handled.
Hilson and Potter (2005) explain that in Ghana artisanal miners may choose to register or
not to register their operations. This laissez-faire attitude towards registration serves as a
stumbling block to formalising the sector. Where there is no commitment even support
cannot be forthcoming. In the meantime illegal mining activities continue and miners
continue to be trapped in the subsistence environment; they are not able to move to a
position where they can make savings and turn mining into a sustainable livelihood
(Labonne, 2003; Hentschel et al., 2002).
Heemskerk (2005) however, argues that miners need not be confined to an unsustainable
subsistence environment. With the right technical and financial support, miners could be
able to shift in status from subsistence mining to a more sustainable microeconomic
environment that promotes savings and investment (see figure 3.2). In the process, the
ASM sector as a whole would also be able to contribute to sustainable development. For
instance, an improvement in technology would enable miners to increase their productivity
and help them earn more income from which they can meet their basic needs but at the
same time making savings or even investing back into the same business or others.
39
Figure 3-2: Transition from unsustainable to sustainable environment
Source: Heemskerk (2005:84)
3.3 GOVERNMENT’S PERSPECTIVES
3.3.1 LACK OF DEMOGRAPHIC INFORMATION
One of the biggest challenges for any government to provide quality services and goods to
people is accurate data. In the case of services provided to ASM, they have tended to be
inefficient and ineffective due to unavailable census data. Many countries lack census data
on artisanal and small-scale miners (Hilson and Maponga, 2004). It is not certain on the
exact numbers of people involved in the sector as there have been no field censuses. For
this reason, Hilson and Maponga (2004) add that even the statistics on ASM used in most
literature is based on crude estimates. The non-availability of comprehensive demographic
information makes it difficult to formulate policies that reflect the needs of the sector, and
as such support programmes put in place to help miners appear to be ineffective.
Dreschler (2001) cites the SMC as one such example where absence of accurate census
data at planning stage has adversely affected the quality of services the centre provides.
Hentschel et al. (2003) argue that although the centre has been successful because it
Unsustainable
Sustainable
Income
Savings
Meeting
basic needs
Investment
40
addressed the real needs of small-scale miners through improvement of their access to
processing technology, it has not been able to adequately meet the expanding demand
pressed upon it by miners. This is mainly due to the growing population of miners within
and far outside the immediate perimeters of the centre. Dreschler (2001) explains that
originally the centre was meant to serve about 43 miners within a 50km radius, but more
have been accessing the centre thereby creating congestion and queues that last up to six
weeks before miners could have their ore processed.
On the other hand, collecting census data on artisanal and small-scale miners is
constrained by many factors. First, artisanal mining activities often take place in the
remotest rural areas of developing countries where transport and communication
infrastructure is almost non-existent (Labonne, 2003; Dreschler, 2001). Faced with
inadequate transport facilities, government institutions are not able to access these places
to conduct censuses especially during the rainy season when roads are almost impassable.
Second, artisanal mining activities are transient in nature and therefore miners tend to be
very mobile in pursuit of mineral ores (DDI, 2005; Kambani, 2003c). As miners have no
fixed location of operation, collecting data about their distribution, gender composition
and other variables, becomes complicated especially when dealing with migrant
populations from far-away locations (Heemskerk, 2005).
In addition, where censuses are conducted under general demographic statistics, artisanal
mining tends to be subsumed under more general headings such as subsistence farming
(Burke, 2006). This is more applicable to seasonal artisanal mining. Finally, government
institutions are constrained by lack of financial resources and manpower to conduct
censuses (Hilson and Maponga, 2004). As a result they resort to using guesswork when
determining the number of people involved in ASM.
41
The absence of key data on the sector has also led to the implementation of inappropriate
laws and regulations obviously not reflecting the needs of the sector (Hilson and
Maponga, 2004). A consequence of inappropriate laws in many countries has been the
procedurally complex licensing schemes often too difficult and costly for artisanal and
small-scale miners (Hentschel et al., 2003; D‟Souza, 2002). For instance in Ghana and
Zimbabwe alike, Hilson and Maponga (2004:26) state that the “licensing procedure is
riddled with bureaucratic procedures to the point where successful completion and review
of an application takes several months”.
3.3.2 UNAVAILABILITY OF GEOLOGICAL INFORMATION
Absence of geographical information on location and distribution of minerals is another
major challenge governments are faced with (Hilson, 2005). Government institutions lack
the capacity and resources (Quiroga, 2002) to undertake geological surveys and produce
geological maps for issuance to prospecting artisanal and small-scale miners. According to
(Hilson and Maponga, 2004:25) geological data is “a necessary prerequisite for
determining, and demarcating locations appropriate for ASM activity”. And yet many
times plots given to miners have been demarcated without conducting any geographical
and geophysical surveys. Most of the times such plots have been found to have no mineral
content. When that happens miners are forced to abandon their concessions and begin to
mine on nearby LSM concessions.
In some cases, countries many have lists of minerals found in the country. However,
despite having a wealth of indigenous mineral resources listed in their databases, there is
no location data available. Hilson and Maponga (2004) argue that if at all geological
information is made available to miners, it is often presented in technical terms too
difficult for them to understand.
42
3.3.3 LACK OF POLITICAL WILL
For the formalisation of ASM to succeed governments must take the leading role and
provide an enabling environment. However, very often governments lack the political will
to legalise ASM sector, especially where land rights are not recognised. Hentschel et al.,
(2003:11) argue that “the lack of political will to create an adequate framework for
legalising ASM may be explained by personal interests related to corruption, money
laundering and similar illegal activities, enabled by the informal status of the ASM sub-
sector”.
Furthermore many officials involved in policy formulation and regulation may also have
personal interests in the sector (Hentschel et al., 2002). In countries with weak governance
structures, officers have wide discretionary powers that allow them to work with little or
no supervision (MMSD, 2002). Very often such officers abuse their powers and engage in
corrupt practices; usually preying on vulnerable individuals. As earlier stated, the
registration procedures are usually bureaucratic, complicated and take too long before
operators can get their licences (Kambani, 2003c). The situation makes miners vulnerable
to extortion in exchange for speedy procession of licenses and permits.
Finally, governments may not have the incentives for legalising the sector because they
are the sole buyers of the mineral products from registered and unregistered miners alike,
especially in situations where smuggling is not rampant. In countries where value added
tax (VAT) is applied on goods and services, it may serve as a hidden incentive for the
government to maintain and perpetuate the informal status of artisanal miners because
they do not benefit from VAT refunds on the purchases they make (Hentschel et al.,
2002). Miners are subjected to a double payment of VAT; at the producer end when they
43
sell minerals and at the consumer end when they make purchases, hence generating a
double fiscal income for the government.
3.4 CONCLUSION
Banning artisanal mining appears to be the most plausible solution in the short term but it
is not exactly the best option. ASM is a poverty-driven activity whose perpetuity depends
on the presence of high levels of poverty amongst vulnerable people. Therefore, unless
sustainable development is achieved and better livelihood alternatives are available
artisanal mining would continue. In retrospect, banning artisanal mining would only
inspire people to find other ways of evading controls and carry on working because they
must survive (MMSD, 2002).
While appreciating the problems associated with artisanal mining, governments have also
recognised its potential to contribute to economic and sustainable development. For this
reason, many of them have undertaken to formalise ASM. The ultimate goal of
formalisation is to bring order in the organisation and co-ordination of the ASM sector
through legislation. However, the process of formalisation has proved to be a daunting
task for both artisanal miners and governments in SSA. For miners, formalisation has not
addressed their immediate concerns and for this reason the majority of them continue to
operate illegally. Lack of security of tenure coupled with complex registration procedures,
lack of access to factors of production and government support are some of the biggest
challenges they have to overcome to decide on whether or not to legalise their mining
operations.
On the other hand, governments are also daunted with challenges of their own in ensuring
successful integration of the ASM sector into the formal economy. Among other
44
challenges, governments lack census and geological data for them to adequately plan for
the sector. In addition, there is lack of government political will to legalise the ASM sector
especially where land rights are not recognised. The problem has been compounded by
officials with personal interests related to corruption and money laundering, and these
would ensure that the sector remains informal. Sometimes governments may not just be
bothered to formalise artisanal mining because they benefit from unregistered miners‟
unclaimed VAT refunds at both producer and consumer ends especially where there is
minimal smuggling and governments are the sole buyers of the minerals.
45
CHAPTER 4 CONCLUSIONS AND RECOMMENDATIONS
4.1 INTRODUCTION
This chapter concludes the whole study. It thus examines some of the possible ways in
moving forward with the formalisation of ASM in SSA and gives general conclusions
drawn from the study. The chapter also makes recommendations for further research.
4.2 MOVING FORWARD WITH FORMALISATION OF ARTISANAL
MINING
Regardless of the challenges faced in formalising ASM, there are still possible ways in
which the sector could be steered into transformation from being a mostly subsistence-
providing informal sector into a viable sustainable formal sector capable of contributing
positively to sustainable development and growth of national economies.
4.2.1 STAKEHOLDER PARTICIPATION
The fact that ASM continues to operate informally is indicative of weak regulatory
policies
21
which cannot be implemented nor complied with because both the implementers
and the beneficiaries lack their understanding. In turn, such policies lack support and
compliance from the people they are intended for because they do not understand them but
most importantly because they are devoid of their expectations.
There has been a tendency by governments to formulate policies that are not sector-
specific; do not address the needs of relevant sectors. Governments tend to assume that
since miners are poorly educated they would not understand the policies even if they were
consulted. Thus, they make their own decisions on what services to provide to people.
21
Refers to policies that do not reflect the specific needs of the sector.
46
However, Hilson (2005) argues that the ASM sector has many educated people operating
as miners. Some of them have attained tertiary education and are therefore capable of fully
participating in consultative processes regarding the sector. According to the World
Bank,
22
often times the services provided by governments fail to serve the poor in quality,
quantity and affordability. This is mainly because such services are designed on the
assumption that services are inadequate in a given area and therefore must be given to the
people (ADB, 2004).
Heemskerk (2005) argues that in order to legislate good policies for the formalisation of
ASM, all interested stakeholders
23
must be involved in the process. Stakeholder
participation
24
encourages involvement of local people into development processes (Mitlin
and Thompson, 1995; Seddon, 1999); it brings the right people together to share
information and make decisions. The overarching premise for participation is that it
immensely improves the quality of decisions by making the process more efficient and
effective (Roncerel and Boyer, undated). Because it is a consultative process aimed at
consensus building, stakeholder participation enhances opportunities for community
members to voice their views on matters that affect their lives (USAID, 2005; ECA,
2004). For this reason stakeholders are willing to accept and support the outcomes of the
process. In addition, stakeholders have a sense of joint ownership of the decision reached
because they have been part of the decision making process (MMSD, 2002). They
understand exactly what they are doing and why they are doing it.
However, there are some problems with participatory approaches. For instance,
manipulation of beneficiary needs is one major problem (ADB, 2004). Berger-Bartlett and
Craig (2002) argue that Participation may sometimes be used to achieve predetermined
22
See World Development Report 2004
23
People who are likely to be affected by the process; government, miners, civil society.
24
A process through which stakeholders influence and share control over development initiates, decisions
and resources which affect them (World Bank)
47
objectives. Therefore, instead of reflecting beneficiary needs, facilitators would be
advancing their own agendas. In such cases meetings may also be rushed because
facilitators just want an endorsement of „participation‟ from the beneficiaries.
Furthermore, the level of participation of the people may also prove problematic (Mitlin
and Thompson, 1995). If participants are chosen by interest groups (government, NGOs)
then it becomes clear that it is not the interests of the communities being served but those
of the interest group. In addition, Berger-Bartlett and Craig (2002) argue that resorting to
the system of representatives may be also problematic and result in the exclusion of
important stakeholder groups and/ or necessary external expertise.
Community-based development is a complex process (Mitlin and Thompson, 1995) and
for this reason mistrust especially on the part of the communities is bound to arise.
Nevertheless, these problems can be overcome by clearly defining the purpose and
objectives to be achieved from formalising the ASM sector. Everyone involved must be
taken on board and in turn trust would begin to build among stakeholders. Roncerel and
Boyer (undated) argue that although establishing trust is vital it is sometimes slow, but it
has to be established. In addition, for there to be effective participation, there must be
balance of power among the groups involved; processes should recognise principles of
fairness and equity (MMSD, 2002). Finally, representatives of beneficiaries must be
democratically elected by their own people without external influence to ensure effective
representation of the communities (Berger-Bartlett and Craig, 2002).
4.2.2 DECENTRALISATION
Like any other business, ASM registration is still centralised in many SSA countries.
Artisanal miners travel long distances to go to the capital cities for registration and
licensing. The situation has both cost and time implications for miners. As Banchirigah
48
(2006) argues, many artisanal miners are willing to legalise their operations and register
for licenses but they are discouraged by the distances they have to travel to the city and the
costs involved in travelling. In addition, a centralised system creates problems of
congestion and breeds corrupt practices (Hilson, 2002d). Some officials may take
advantage of desperate miners who in turn would give them bribes to have their licenses
processed quickly. Thus decentralising registration processes would benefit miners
because distances and travelling costs would be reduced
The concept of decentralisation is not new (Parker, 1995). It has been experimented with
in many parts of the world including SSA and has succeeded in some countries while it
failed in others. Reasons for failure have mainly been attributed to lack of political will.
However, in the era where people are concerned about social justice and equity,
decentralisation offers the opportunity for people at local level to be in touch with
government leadership and be able to decide how they would like to be governed.
Rondinelli (1999:2) defines decentralisation as “the transfer of authority and responsibility
for public functions from the central government to subordinate or quasi-independent
government organisations or the private sector”. Rondinelli also distinguishes between
four categories of decentralisation; administrative, fiscal, economic and political.
However, for the purpose of this thesis focus will be on administrative decentralisation.
Administrative decentralisation seeks to transfer responsibility for planning, financing,
and managing certain public functions from the central government and its agencies to
field units of government agencies, subordinate units of government, usually semi-
autonomous public authorities. It can take the form of deconcentration, delegation or
devolution (Parker, 1995; Rondinelli, 1999).
49
As far as the ASM registration processes are concerned, decentralisation has quite a
number of benefits. First, proximity to artisanal mining communities enables better
mobilisation and more efficient allocation of resources at the local level (Bergh, 2004). It
also means that miners no longer have to travel long distances to the capital city to register
their operations. Second, decentralisation helps to simplify complex bureaucratic
procedures, and increases government officials‟ sensitivity to local conditions and needs
(Rondinelli, 1999). One of the major problems with the ASM registration system has been
the associated bureaucracy and complex paperwork most of which miners do mot
understand. But in a decentralised system, such bureaucracies are minimised. Finally,
decentralisation enhances better opportunities for local residents to participate in decision
making (Bergh, 2004). Seddon (1999) argues that participation is a precondition to
successful decentralisation because it is through participation by local people that
government would get information.
However, decentralisation is not a universal remedy because it does have its shortcomings
(Rondinelli, 1999). Decentralisation may not always be efficient because sometimes
central government may transfer administrative responsibilities to local levels without
corresponding financial resources; hence making equitable distribution or the adequate
provision of services more difficult (Bergh, 2004). In addition, weak administrative or
technical capacity at local levels may result in inefficiency and ineffective delivery of
services to the communities (Rondinelli, 1999; Bergh, 2004). Finally, Bergh (2004:782)
argues that decentralisation may allow functions and benefits to be captured by local elites
instead of increasing accountability at the local level thereby paving way to
“decentralisation of corruption”.
Nevertheless, when compared to other administrative systems in relation to efficiency in
the allocation and distribution of resources, decentralisation is more responsive. Therefore,
50
for decentralisation of the registration process to be successful government must provide
adequate infrastructure in form of district centres meant for ASM administration. The
centres must be fully equipped and adequately staffed to facilitate improved delivery and
quality of services (Hilson, 2002d; Lombe, 2003). In addition, Rondinelli (1999:6) argues
that “there must be a system of accountability based on public and transparent information
that enables communities to monitor the performance of the local government effectively
and to react appropriately to that performance, so that politicians and local officials have
an incentive to be responsive”.
4.2.3 CAPACITY BUILDING
Good policies and regulations are dead in themselves if they are not well implemented.
Many countries in SSA have failed to integrate artisanal mining into the formal economy
due to lack of capacity and resources, lack of political will and government support among
other things (MMSD, 2002). The institutions responsible for ASM are not able to
effectively monitor and enforce regulations thus giving an opportunity to the rapid
proliferation of illegal ASM activities.
Therefore, through capacity building, government institutions can improve their human
resources, organisational and operational capabilities for them to better facilitate the
transition of artisanal mining into the formal economy. However, many government
institutions have undergone capacity building several times and nothing seems to change.
This is because there are no corresponding changes at institutional and government levels.
For this reason many of the good schemes that have been implemented by governments to
support artisanal mining activities have failed to function effectively (Hilson, 2002d).
51
Hilson (2002d) cites the Madini Centre, a government supported facility in Tanzania,
where large sums of money were spent to improve ASM operations. Despite huge
investments into the facility, ASM activities continue operating without being monitored.
In addition, miners are not able to access technical advice or skills training. Another
example of failure to institute institutional changes is with the Ghanaian government.
Even after regularising the ASM sector in 1989 and knowing the extent of the sector, the
government maintained a small work force of 35-40 in the Minerals Commission (Ibid,
2002d). It is certainly not possible for a workforce as small as this to effectively monitor
the activities of ASM and enforce regulations considering that ASM activities are dotted
across the country.
Equipping government institutions with the necessary resources and techniques is the key
to effective monitoring and enforcement of regulations. However, if the miners are still
trapped in their old odd ways of doing business the problems of illegality would continue.
Therefore, there is also need to build capacity in the miners themselves in appropriate
areas such as mining operations, business management, administration and marketing.
Awareness programmes on wider issues such as health and safety, and child labour must
be put in place. However, it must be noted that convincing miners to abandon certain
practices which at their level of production have proved effective can be a difficult process
to do. For instance, amalgamation of gold using mercury has proved to be very effective
for miners. Hinton (2005) argues that because of the effectiveness of the process,
convincing miners to use less mercury due to its associated environmental and human
risks is a difficult process.
Therefore in order to get the message across to the miners, awareness programmes must
be put in place; these must aim to cover broader issues facing their communities. Hilson
(2002d) adds that demonstration programmes must be conducted to show miners other
52
better processing technologies. Miners are bound to learn more from demonstrations
because it is easier to believe what they see more than what they are told.
4.2.4 PARTNERSHIPS
In many cases illegal artisanal mining occurs on MNCs concessions (Haselip and Hilson,
2005). Miners work the surface deposits on concessions as they claim there are no other
alternative sources of livelihood for them (Hilson, 2002e). Although artisanal miners
mostly work deposits which are uneconomic for LSM operations, sometimes they cause
loss of resources by spoiling large deposits suitable for mechanised operations (Burke,
2006). For this reason, MNCs have felt compelled to remove them from their concessions
even if it means using state security. However, evidence has shown that neither
government nor MNCs even with the help of state security can manage to completely
remove illegal miners, especially from land to which they have traditional and ancestral
ties (Hilson, 2002f). Most importantly, as MMSD (2002) explains artisanal is a poverty-
driven activity whose continuity largely depends on the continued existence of poverty
among people.
Therefore, having appreciated the fact that artisanal mining is here to stay, instead of
fighting it, MNCs can begin to forge partnerships between themselves and resident
artisanal miners (Hilson, 2002e; USAID, 2005). Partnerships are a sure way of developing
formal links between these two groups and other stakeholders. Bugnosen (2001) cites the
example of the Baguio City in the Philippines, where a mining partnership exists. The
project called Acupan Contract Mining Project (ACMP) was launched in January 2002
and employs a tripartite mining approach involving government, small-scale miners and
BenguetCorp, a mining corporation (Velez, 2005). According to Bugnosen (2001),
BenguetCorp allows a group of miners to work demarcated portions of its mining land. In
53
addition, the company provides centralised ore processing facilities to miners in return for
exclusive rights to buy the gold off the miners (Velez, 2005).
The ACMP has been a success as indicated by BenguetCorp management (Hilson, 2002e).
This is due to stakeholders fulfilling their roles as per their agreement. For instance, Velez
(2005) explains that the Philippines governments‟ main role has been to facilitate an
enabling environment for the project. Artisanal miners on the one hand have been able to
organise themselves into associations which act as contractors and provide funding for
their mining operations. BenguetCorp, on the other hand has provided processing
facilities, ready market and technical expertise. Velez (2005) adds that the benefits
accrued from ACMP have resulted in low capital and operating costs for the company,
increased earnings for miners and improved tax collection mechanisms for government.
Therefore, from the ACMP, it can be concluded that partnerships offer a good opportunity
for motivating the formalisation of ASM in SSA. However, there must be corresponding
government support and political will as was the case in the Philippines (Bugnosen, 2001),
otherwise the idea of partnerships becomes just rhetoric.
4.3 GENERAL CONCLUSIONS
The main aim of this study was to determine how defective existing legislation contributes
to the exacerbation of illegal mining in SSA. The study has thus revealed that other than
defective legal frameworks, the lack of government commitment towards ASM has also
contributed to the mushrooming of illegal mining activities in SSA. Therefore, this study
confirms the hypothesis which stated that the failure to formalise artisanal and small-
scale mining in Sub-Saharan Africa has been due to defective legislative policies which
have made regulation of the sector difficult.
54
The problem of illegal mining is complex because many forces are at play. Its continued
existence regardless of legislation signifies policy problems more than an act of defiance
or non-compliance by artisanal miners. The failure by artisanal miners to have their
operations legalised are more often obstructed by policies and regulations than their
unwillingness to comply with the same policies and regulations. Governments have not
formulated holistic policies for regulating ASM, but have instead mostly relied on ad-hoc
policies which do not address the sector‟s needs and requirements. Furthermore,
governments‟ lack of commitment to the formalisation of ASM has contributed to illegal
mining. This lack of commitment has been demonstrated through inadequate institutional
support towards ASM as compared to the support given to LSM. As a result, they have
adopted laissez-faire attitudes towards ASM.
For many countries in SSA that have formalised ASM there have been numerous
challenges faced by both miners and governments. The challenges faced by miners have
mainly centred on lack of security of tenure, lack of access to markets, complex and
bureaucratic registration procedures, and lack of government support. These are the most
prominent of the challenges and usually the motivators for illegal mining. On the other
hand, governments‟ challenges have included among others lack of census data, lack of
geological data and the lack of political will.
Notwithstanding these challenges, there are possible ways which could be exploited to
move the formalisation of ASM forward. For instance, the involvement of miners in issues
that affect them would provide policy makers with information that they require to
formulate holistic policies. Stakeholder participation is a more democratic way of
involving beneficiaries and getting consensus on decisions to be made. Although
participation has problems such as time limitation, manipulation and representation, these
55
problems could be overcome by clearly defining the purpose and objectives to be achieved
from formalising the sector, and ensuring that miners themselves choose participants. In
addition, there must be balance of power among the groups involved so that no group
takes the superior role as leader and the others as subordinates.
Decentralisation and participation are said to be symbiotic; the success of decentralised
system depends on the participation of communities. Decentralisation facilitates the
devolution of power from central government to the districts. Therefore, devolving the
registration and administration of ASM to districts offers the prospects of proximity to
registration centres, minimised costs of travel, less bureaucratic procedures and corrupt
practices. As for government, decentralisation would facilitate an effective and equitable
distribution and allocation of resources. It also enables government to gain contact with
miners through effective monitoring and enforcement of regulations.
Lack of capacity and resources has crippled government institutions and hence they are
unable to perform their functional duties. Therefore, capacity building would equip them
through improved human resources, organisational and operational capabilities so that
they are better placed to facilitate the transition of artisanal mining into the formal
economy. However, capacity building must be met with corresponding institutional
changes. At the same time artisanal miners must also be equipped by providing them with
deliberate programmes that offer education and skills training in areas related to their
business, and in other wider issues affecting their communities
Partnerships are another possible stimulant to transforming artisanal mining into a viable
and sustainable economic activity. They offer the hope of external investment into the
ASM sector. However, for partnerships to work, government must provide an enabling
environment in the form of effective and efficient legal framework and secure tenure. In
56
addition, there must be willingness among parties involved; no party should be coerced
into a partnership otherwise it is destined for failure.
Some of the pertinent issues that have come out of this study are unavailability of accurate
census and geological data, and use of inappropriate technology in ASM. These are some
of the major challenges to formalisation of ASM. Therefore there is need to:
Conduct censuses in order to determine the actual numbers of people involved in
ASM. Correct census data would help governments plan adequately for miners
even as they continue to formalise the sector.
Gather geological data on minerals available. Geological information would enable
governments demarcate and allocate plots which have mineral contents to miners,
and hence reduce illegal mining exacerbated by discontentment.
Research into appropriate and affordable environmentally-friendly technologies
which could help miners to improve their production efficiency. Miners continue
to use inappropriate technologies which not only cause damage to the environment
but also to their health.
57
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