83% of the world’s mining workforce relies on Artisanal and Small Scale mines for their livelihood. That comes to roughly 40.5 million people. These people were vulnerable before COVID-19 and even more so now. As gold prices rise, so does exploitation and violence for these miners.
We call on industry, government and civil society to urgently work together to support and protect these vulnerable communities.
Introduction to Artisanal & Small Scale Gold Mining
The artisanal and small-scale (ASM) mining sector has seen tremendous growth over the past decade. This report will look at some of the key themes seen in this sector, comparing data collected from GDL refiners with statistics collated by Metals Focus.
According to their market analysis, ASM gold production has risen from around 400 tonnes in 2010 to an estimated 560 tonnes last year, with growth averaging 3.6% per annum.
To put this into perspective, over the same timeframe, global gold mine production (covering both formal and informal supplies) has risen by a more modest 2.4% per annum, from 2,794 tonnes in 2010 to an estimated 3,467 tonnes in 2019.
Despite the substantial volume of ASM gold being delivered to the market, it is perhaps surprising the small quantity of this material that is being processed by LBMA GDL Refiners. The reason for this is that, even though the LBMA looks to encourage refiners to engage with responsible ASM Miners, it is often reputationally risky to do so.
ASM: an opportunity for GDL refiners?
Definition of ASM
Before looking at how the LBMA is encouraging greater industry engagement with ASM it is important to first define it. While there is no universal definition, the OECD Due Diligence Guidelines define ASM as: “formal or informal mining operations with predominantly simplified forms of exploration, extraction, processing and transportation. ASM is normally low capital intensive and uses high labour-intensive technology.” According to this definition, “ASM can include men and women working on an individual basis as well as those working in family groups, in partnerships, or as members of cooperatives or other types of legal associations and enterprises involving hundreds or even thousands of miners.”
These individuals are typically looking for alluvial gold, which means newly mined gold found in sand or gravel deposits. Usually this is in the form of dust or occasionally nuggets, which is easily transported and already in concentrated form. Alluvial gold therefore tends to be visible to the naked eye. Finally, alluvial gold can be easily melted and/or semi-refined into small ingots, often up to a purity of 85-92%.
Why Does ASM Gold Matter?
83% of the world’s mining workforce relies on ASM mines for their livelihood. That comes to roughly 40.5 million people, which means that nearly six times more people are involved in ASM mining than in large scale mining. This hints at the significant economic impact ASM can have.
Equally though, it is important to recognise how dangerous this work frequently is, and that it is often some of the most vulnerable people in society who are engaged in ASM.
Call for Ongoing & Emergency COVID-19 Action
More effort and support is required for LBMA Good Delivery Refiners and Large Scale Miners to engage responsibly with the ASM sector. This needs to come from a range of stakeholders, including industry, consumers, governments and NGOs. This has been identified by the global community prior to the COVID-19 Crisis, and remains part of the LBMA’s long term strategic engagement.
Civil society has issued a Call to Action urging emergency action for vulnerable artisanal and small-scale (ASM) mining communities and supply chains. In times of heightened risks in global mineral supply chains, the carrying out of due diligence and support for on-the-ground, OECD-aligned initiatives remain more important than ever. In its capacity as Vice Chair of the Multi-Stakeholder Group (MSG) of the OECD Responsible Mineral Supply Chains Forum, LBMA urges its membership and all stakeholders to act now to support these projects.
For more information contact: email@example.com.
Overview of Global Supply
Metals Focus’ supply-side research also highlights why ASM continues to be such an important part of the gold market. Their analysis first looks at trends in global gold supply, comparing changes in supply over the past decade and their expectations out to 2024, as shown in Figure 1.
Figure 1: Changing Profile of Global Gold Supply
2010 vs 2018