Artisanal and Small-scale Mining

The World Gold Council supports the responsible mining and trading of gold from all legitimate sources, including Artisanal and Small-scale Mining (ASM).  We believe that the responsible development of gold resources from both Large-scale Mining (LSM) and ASM has the potential to bring broad social and economic benefits to individuals, communities and countries. 

ASM, with low levels of capital investment and mechanisation, is very different in nature to LSM. Large-scale Mining is governed by host authorities through a wide range of regulatory controls, permits and inspections and is subject to an array of health, safety, social and environmental standards. Leading LSM operators also adopt many international standards, including, for example, disclosure of payments to government and due-diligence related to gold and conflict.

ASM is practiced in many forms and globally provides livelihoods to a significant population who otherwise may not be economically active.  However, ASM is also often poorly regulated by local authorities, either due to an absence of a regulatory framework or a lack of capacity to enforce existing frameworks. ASM is also often viewed as contributing to social conflict, human rights violations, environmental degradation, and commonly lacks adequate health and safety practices. Even so, ASM production is an important component of the global gold industry and the poor practices often found in the ASM sector negatively impact the global reputation of gold mining.

ASM mining often occurs in locations where there is no LSM mining and the large-scale mining community has an extremely limited ability to influence ASM activities. On those occasions where ASM and LSM do occur in the same geographic area, there can be mutual benefits to both sectors working collaboratively towards more positive and sustainable outcomes.

The World Gold Council supports responsible ASM that demonstrates appropriate environmental, safety and labour practices and is not linked to conflict. We support access to international markets for gold from responsible ASM. We recognise the efforts of organizations which are playing a key role in seeking to improve ASM conditions and enable access to markets, including some civil society organisations, the international development community, and the LBMA, whose Responsible Gold Guidance sets out criteria for refineries on the due-diligence process they should put in place for accepting ASM gold.

We do not support gold mining activities that are controlled by criminal elements or armed groups, or activities which are in and of themselves criminal. It is important that a distinction be made between those criminal activities as compared with traditional, artisanal livelihoods associated with mining. 

ASM and Conflict

Where there are concerns related to criminal activities and armed groups, the large-scale mining industry has a responsibility to ensure that their own activities do not support such activities. It is however unrealistic for large-scale mining companies to engage with ASM actors linked to criminal activities before governments have made commitments to prevent these criminal activities and taken decisive action. The international development community, the large-scale mining industry, civil society and others have a role to play in encouraging governments to make such commitments. 

In addition to concerns related to criminal activities and armed groups, large-scale mining companies also have concerns if they are asked assume responsibility for environmental liabilities caused by others; and concerns about reputational damage arising from an association with unacceptable social practices. National governments and other actors can create frameworks to help address these concerns and in turn facilitate engagement of large-scale mining in the improvement of the ASM sector.

OECD Due-Diligence Guidance on Responsible Mineral Chains and Application for ASM

The World Gold Council, working through a consultative, multi-stakeholder process, published the Conflict-Free Gold Standard in October 2012. This is intended to provide support to large scale gold mines in operationalising the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

We strongly support the OECD Due Diligence Guidance and were closely involved in the drafting of the Supplement on Gold. The Supplement aims to strike a difficult balance. On the one hand, it seeks to raise due diligence standards; on the other, it seeks to ensure that ASM producers who may find it difficult to meet these standards are not excluded from the formal market. If the Guidance is to be effective in meeting its objectives over the medium term, this tension needs to be addressed and the capacities of ASM producers to meet due diligence requirements raised. It should be noted that all indications are that the vast majority of ASM producers are not linked to unlawful, armed conflict.     

ASM and LSM

LSM companies can play an important role in supporting and facilitating dialogue and engagement on ASM issues. The role of LSM companies will vary according to the local context. However, there are a number of approaches that LSM companies follow that will include consideration of Artisanal and Small-scale Mining including:

•    recognising legitimate artisanal and small-scale miners as stakeholders, including when undertaking impact assessments and considering social investment priorities;
•    fairly compensating legitimate artisanal and small-scale miners if they are displaced by large-scale mines and, as appropriate, promote alternative livelihood schemes;
•    observing the UN Guiding Principles on Business and Human Rights in their interactions with ASM and local communities, including through the provision of appropriate grievance mechanisms;  
•    observing the Voluntary Principles on Security and Human Rights in implementing security strategies to protect their people, assets and other interests.

ASM Definitions

There are many different forms and understandings of artisanal and small-scale mining. We use the following means:

Alternative livelihoods: the development of different sources of income for individuals and families who are engaged in illegal mining or other illegal activities which have damaging social or environmental impacts in order to help divert them from these livelihoods. 

Artisanal and Small-scale Mining (ASM): ASM is a collective term embracing both small scale and artisanal mining. It covers formal or informal mining which is characterised by low capital intensity and high labour intensity and relatively simple methods for exploration, extraction and processing.  ASM can involve men and women working on an individual basis as well as those working in family groups, in partnerships or as members of co-operatives or other types of association. This does not include activities which are criminal, such as trespassing or armed incursions into active mining areas to steal mined or processed materials, or organized schemes involving employees to steal refined or processed material. 

Formalisation:  Formalisation is a process that seeks to integrate ASM into the formal economy through regulatory and policy reforms designed to address many of the negative associations of ASM. Legalisation is an important dimension of this process. 

Illegal Mining:  illegal mining refers to mining or processing activities which run contrary to nationally or regionally applicable laws, including mining in areas allocated for use by other rights holders (where the rights holder has not given their permission for such exploitation) or where the methods used for extraction are in breach of accepted social and environmental laws or regulations.      

Large-scale Mining (LSM): Large-scale mining refers to gold mining operations that are not considered to be artisanal or small-scale.

Legitimate Artisanal and Small-scale Mining: The OECD Supplement on Gold raises the issue of ‘legitimacy’ and notes that this can be context specific. We understand ‘legitimate’ ASM to refer to artisanal and small-scale mining which is undertaken consistent with applicable laws – i.e. where ASM activities are conducted within a legal framework and where artisanal miners can establish a right to mine in an area; or where a legal framework covering ASM does not exist or where such activity is undertaken in good faith and does not run counter to the legitimate property rights of others and occurs with due regard to the environment, safety, health and human rights.