The challenge of improving the position of responsible artisanal and small-scale gold miners needs a multi-stakeholder response

One of the challenges that dominate the annual discussions at the OECD Forum on Responsible Sourcing (being held virtually this week) is how best to strike a balance between ensuring high standards of due diligence around the origins of gold without, in the process, excluding millions of artisanal and small-scale miners from access to formal gold markets. Due diligence costs can be prohibitive for refiners, for example, if they have to check the integrity of gold from dozens of widely-distributed artisanal gold workings. What is increasingly clear is the need for a range of stakeholders to co-operate around due diligence if responsible ASGM actors are not to be marginalised or their production diverted into illicit channels.

On 26th April the World Gold Council and the LBMA brought together a panel to discuss this challenge. The Panel consisted of Bulga Nyamjav of the Central Bank of Mongolia, Cristina Villegas of international NGO Pact, Alan Martin of the LBMA, Shaokai Fan, Head of Central Bank Relationships at the WGC and Phaedon Stamatopoulos, Director of Sourcing and Refining for Argor Heraeus.

Shaokai Fan launched a new WGC research report on the role of central bank ASGM domestic purchase programmes. Based on case studies from Ecuador, Mongolia, the Philippines and Ethiopia (prior to the outbreak of hostilities in Tigray in November 2020), the report highlights the potential for domestic purchase programmes to support formalisation and due diligence, improve social and environmental performance, introduce better technologies and improve the predictability of the prices received by small-scale miners. Bulga Nyamjav then presented the Mongolian Central Bank’s work which has involved the purchase of around 100 tonnes of gold over the last five years. In addition to the impressive headline figure, she shared some of the challenges that have arisen in relation to taxation, accessibility of purchase counters and the availability of banking services to the mining entities.

Alan Martin set out the LBMA’s approach as the oversight body, inter alia, for refinery due diligence standards and also highlighted both the role of aggregators and traders in the ASGM gold market and of processors. Phaedon Stamatopoulos outlined Argor’s range of initiatives to support ASGM market access including through working with central banks and civil society. Cristina Villegas spoke about the work of the Pact Mines to Markets programme. She highlighted eight key recommendations arising from their work including the importance of incentives, tax regimes, processing arrangements and not setting standards at a level that are unreachable in the short term for artisanal and small-scale miners.

Overall, the panel provided a positive and practical framework for the role that a wide range of actors – including host governments, central banks, donors, refiners, large-scale miners and civil society groups - can play in supporting market access for responsible ASGM actors