Since the advent of international efforts to create more responsible sourcing practices and break the link between high-value minerals and deadly conflicts, a lot of lip service has been paid to ensuring that the most vulnerable in the affected mineral supply chains do not carry the oversized brunt of these efforts.

Despite the best of intentions and significant financial and human investments by donor governments, policy makers and technical experts, the reality is that those working within the Artisanal and Small-scale Mining (ASM) sector – including an estimated 40 million gold miners – remain largely cut out of legal markets, criminalised or ignored by their governments, and forced to operate in highly exploitative, legally precarious and unsafe conditions.

This legal, financial and market exclusion becomes a self-fulfilling, and repeating, vortex from which ASM miners can never escape. With limited to no alternatives, they rely on environmentally unsustainable practices, sell their production to buyers in the illicit market who make no due diligence demands and smuggle their gold to trading hubs with less onerous regulations. Once there, this material is recycled into other feedstock, blurring its potentially criminal origins and posing a governance challenge to GDL Refiners that source from these countries.

The ASM Task Force led by LBMA

A critical part of the ASM initiative is the role served by the Task Force. First convened in May 2023, its members represent some of the most knowledgeable and experienced minds in the ASM sector. Some members have created innovative model ASM supply chains in conflict zones, others have formalised ASM miners or navigated often contested co-existence arrangements with ASM miners close to industrial concessions. LBMA is extremely lucky to count on this voluntary body to support us in identifying and defining several foundational elements over the course of the Initiative, including:

  • the credible, yet attainable, due diligence
  • criteria that will underpin a new sourcing framework;
  • incentives that may influence behaviour change;
  • potential unintended consequences;
  • how the standards in the framework could be progressively improved over time;
  • how and who to engage with in identified target countries.

LBMA Outreach

Responses to the ASM Initiative have been positive. LBMA executive members attended the Mining Indaba in Cape Town, the Prospectors and Developers Association of Canada’s annual conference in Toronto, and the OECD Forum on Responsible Minerals in Paris to explain the objectives of the Initiative and seek the support of targeted governments and partners.

At the OECD Forum, LBMA CEO Ruth Crowell met with the Minister of Mines of Ghana and the Deputy Governor of the Central Bank of Ghana to exchange ideas on how their plans to formalise the sector and suppress the illicit trade could be supported by our Initiative.

Since last October’s public launch of the Feasibility Study, several legitimate intermediate refiners and aggregators in both Latin America and Africa have approached LBMA to learn more about how they could be recognised under the Initiative. The assurance scheme run by our industry partner, the Responsible Minerals Initiative (RMI), offers financial support for the costs of RMI’s OECD-aligned RMAP assessments that IRs and aggregators are required to complete prior to achieving RMAP conformance. Once conformant to RMI’s RMAP, these IRs and aggregators should be recognised by GDL Refiners through a cross-recognition agreement between our respective organisations. LBMA and RMI are currently reviewing the cross-recognition document, with a view to strengthening the language and offering more explicit endorsement to ASM material coming through RMI-approved intermediate refiners and aggregators.

Looking Ahead

By year end, LBMA intends to have a revised ASM Toolkit in place for GDL Refiners to begin using in 2024 and a Sourcing Framework for consultation. The Framework will provide guidance to GDL Refiners and their suppliers on credible, yet attainable, ASM-specific due diligence and sourcing requirements that satisfy Refiners’ compliance efforts yet also remove current market barriers that currently prevent ASM material directly entering the legal global supply chain.

As LBMA considers the 10th revision of the Responsible Gold Guidance, a critical element of that process will be to hardwire the ASM framework and toolkit into the new edition.

Changing Perceptions

LBMA is under no illusions that our ambitions may well be dented along the way. Changing the entrenched sourcing practices and business networks of miners, as well as public and industry perceptions of the sector, will take time.

ASM undoubtedly has a PR problem – largely due to its close proximity to a host of serious human rights and environmental threats. But the sector is not homogenous. The complex and dysfunctional scenario in the DRC is not representative of the entire sector. Our initiative aims to focus efforts on the ‘low hanging fruit’ – those countries that are demonstrating promise – and perhaps present an alternative to the current status quo that can be replicated elsewhere.

Once the ASM sourcing and policy framework is inplace, efforts will turn to growing a public awareness and embrace of progressivity – the system by which standards can be incrementally elevated over time. This will involve the whole value chain – including media and campaign NGOs – accepting a certain level of imperfection as the cost of improved sourcing practices and behaviours.

LBMA will work with GDL Refiners to reassure them they will not be abandoned at the first sign of trouble. In turn, Refiners will be encouraged to accept risk mitigation, rather than avoidance, as a critical contribution to their support of responsible supply chains and the broader governance of the global gold sector.