The successful integration of a number of artisanal and small-scale mining (ASM) operations in the Democratic Republic of Congo (DRC) has been driven by cooperation with large-scale miners (LSMs), refiners, traders and the embedding of traceability measures, says natural resource transformation nongovernmental and nonprofit organisation IMPACT.
The DRC is a mining hotspot in Africa, known a rich source of gold and battery metal commodities.
But it is also known for its many illegal small-scale and informal miners, who sometimes overrun legitimate and licensed mine sites and prospects, thus making it challenging to establish and sustain a legal and legitimate artisanal mining sector.
Regions within the country are renowned for violence and lawlessness as rebel groups and governmental forces vie for control in violent skirmishes.
In this regard, IMPACT executive director Joanne Lebert notes that it is important to realise that it is not the entire DRC that is off limits or volatile and that legal artisanal mining can take place in parts of the DRC, as has been the case in the past couple of years.
She was a panellist in a webinar hosted by precious metals authority, the London Bullion Market Association (LBMA), on the topic 'Responsible sourcing of ASM: From risk to opportunity'.
The LBMA notes that emergency support is needed for ASMs, which have been hit especially hard by the Covid-19 pandemic, as people are seeking to exploit ASMs during this time of crisis with price discounts and other unregulated measures.
According to the LBMA, 83% of the world's mining workforce relies on ASM mines for their livelihood, representing about 40.5-million people.
“These people were vulnerable before Covid-19 and are even more so now. As gold prices rise, so does exploitation and violence for these miners,” notes the LBMA in a statement.
In the DRC, IMPACT is running its Just Gold initiative, which is one of the organisation's signature projects. It is an incentive-based approach to traceability and due diligence for conflict-free and legal artisanal gold, from mine-site to market, in alignment with regional / international standards applicable to conflict-affected and high-risk areas.
“When we talk about ‘incentive-based’, we mean an immediate reward for artisanal miners and supply chain actors upstream who, especially in conflict-affected areas, are really living on a knife's edge of survival,” says Lebert.
This, she adds, incentivises ASMs to operate and trade legally, transparently and in alignment with standards through the ability to receive an immediate incentive.
The type of incentives provided by IMPACT work to improve ASMs who want to operate and trade in an environment-friendly manner that does not abuse human rights, while also giving them higher yields, which results in more cash in their pockets.
“We are allies to them to advance fiscal reform and harmonisation,” she notes.
Further, Lebert points out that fiscal reform, taxes and fees that are adapted to ASMs is of critical importance.
“Over the course of the past few years, what has proven to be most effective is not only a better price [for mined minerals], but pricing transparency.” She explains that miners and supply chain actors upstream want to know how the commodity price is calculated to know how they fit in the global supply chain, in addition to knowing that ASMs are being treated fairly, and that they can negotiate on fair terms.
Between 2017 and 2019, IMPACT supported supply chain actors in the DRC and helped develop a cooperative, in particular to produce, trade and eventually export responsible artisanal gold to the international market. This resulted in about 24 kg worth of ASM gold being exported, a portion of which ended up in jewellery traded in Toronto, Canada, by a fair-trade jewellery company that has partnered with IMPACT.
“This is the first of its kind in the DRC,” says Lebert.
In terms of exporting and marketing legal ASM gold from the DRC, IMPACT has managed to incorporate, with recent shipments of ASM gold, data to reinforce traceability of that gold to ensure it was mined and sold through legitimate and legal channels.
“That data is of critical importance – it accompanies the shipment and product, and there is evidence it improves food security, literacy, economic and conflict resilience, social cohesion, gender equality,” she states.
LSMs also have a critically important role to play in ensuring the future viability of ASMs and to build on the current successes experienced in the ASM industry. Lebert says LSMs should help find solutions to ASM's problems and be a solution-provider in this situation.
This is because LSMs are operating in many countries, including the DRC and they have figured out the sometimes complex operating, trading and logistics environment of such jurisdictions.
Although she does not suggest that LSMs buy ASMs, Lebert posits that LSMs enable ASMs to piggyback on the systems and structures developed by LSMs to enable ASMs to scale-up to a start-up level, and once that threshold of commercial-viability is reached, then essentially ASMs can take off on their own.
“LSMs have a role to play to help ASMs economise to make them more commercially viable until they can stand on their own.”