Modern Mining May 2016

COMMENT

Informal mining – a curse or a blessing for Africa?

T he problems that AngloGold Ashanti has been experiencing at its Obuasi mine in Ghana highlight the scale of informal mining in Af- rica and the challenges it presents to both governments and the formal mining sector on the continent. As many readers will already know, the Obuasi site was invaded by hundreds of ille- gal miners in early February this year, forcing AngloGold Ashanti to declare force majeure and withdraw all non-essential employees from the mine. The incursion followed the withdrawal of military protection from the mine on 2 February, a decision which appar- ently mystified AngloGold Ashanti at the time. Its repeated attempts to get clarification – and action – from the Ghanaian authorities have failed and it has now invoked the dispute res- olution provisions in its Mining Lease in an effort to resolve the situation. Obuasi has not really been producing gold on any significant scale since the end of 2014 when AngloGold Ashanti halted the loss-mak- ing underground operations at the mine – so the actual impact on production is negligible. Nevertheless, and as the company points out, the continued occupation of the lease area threatens the long-term viability of the mine and “significantly undermines investor confidence”. The problems at Obuasi are hardly unique and I would venture to say that there are scarcely any mines in Africa – outside of Botswana, Namibia, South Africa and Zambia – that are not affected by the problem of informal and/or illegal mining to a lesser or greater degree. Artisanal miners are known by many names around Africa – for example, they are ‘galam- sey’ in Ghana, ‘zama zamas’ in South Africa and ‘makorokoza’ in Zimbabwe – but, wherever they operate, their activities, whether legal or not, tend to be characterised by poor – often non-existent – safety standards, environmental degradation and grossly inefficient exploitation of orebodies, as well as unacceptable practices such as child labour. Despite the undoubted downside of infor- mal mining, I get the impression that there is a growing body of opinion that views it sympa- thetically. Here in South Africa, for example, we’ve recently had a conference with the theme ‘Artisanal miners are not criminals’ which was hosted by ActionAid South Africa and Mining Affected Communities United in Action (MACUA). Although I didn’t attend myself, I gather that various speakers – many of

them artisanal miners – pointed out that infor- mal mining is literally the only way in which many people in South Africa can earn a living. The keynote speaker, ActionAid’s Christopher Rutledge, described informal miners as “hon- est, hardworking unemployed citizens who eke out a living from minerals which at a constitu- tional level belong to all citizens.” Of course, one would expect organisations such as ActionAid to adopt the position they do on informal mining. More surprising perhaps is a recent article in The Economist , which also looks at informal mining in a positive light. Entitled ‘In praise of small miners’, the article argues that small-scale mining is not a curse. “Globally, artisanal mines employ about ten times as many people as industrial ones,” it says. “Moreover, small mining towns are less affected by the commodity boom-and-bust cycle than are towns that depend on large-scale capital investment. Big foreign mining firms tend to retrench quickly when markets turn down; small local miners tend to keep digging. Also, small miners’ earnings tend to be spent locally. In central Mozambique, for instance, increased legalisation of formerly illicit gold mining over a decade has led to a farming renaissance in many villages, alongside booms in construction and trade.” Worldwide, the World Bank estimates that at least 20 million people – a significant num- ber of them in Africa – engage in artisanal and small-scale mining in about 50 countries. Gold is probably the main mineral mined, although diamonds and other gemstones, copper/cobalt, coal and coltan are also important. I’ve visited artisanal mining operations in several African countries over the years – including Ghana, Tanzania, Zimbabwe (where I was manhandled by a group of illegal min- ers I tried to photograph) and the DRC – and I can’t say that I was ever impressed by what I saw. But informal mining is a phenomenon that’s not going to go away – indeed, it’s almost inevitable that it will grow in scale. Certainly mining companies need to recog- nise this reality and have strategies in place to address it. Some problems – such as those that AngloGold Ashanti has faced at Obuasi – seem particularly intractable but balancing this is the fact that a handful of companies seem to have been remarkably successful in dealing with ‘artisanals’, offering some hope that the formal and informal mining sectors can – for the most part – successfully co-exist in Africa. Arthur Tassell

Informal mining is a phenomenon that’s not going to go away – indeed, it’s almost inevitable that it will grow in scale.

May 2016  MODERN MINING  3