Small-scale mining — opportunities and challenges

2019-04-18T10:56:03+00:00 April 18th, 2019|Hard Issue|

Small-scale mining offers opportunities, but there are many challenges, writes Kgothatso ‘KayG’ Nhlengetwa.

Artisanal and small-scale mining (ASM) is a worldwide phenomenon that is practiced predominantly in Africa, Asia, and Latin America. It is estimated that 20–30 million people are employed by the sector worldwide. ASM has been on the rise in South Africa following the global trend.

There is no single definition for ASM; it varies from country to country and for different developmental organisations. Artisanal mining is part of the informal sector and is typically identified by rudimentary mining techniques, a large labour force, and poverty. In the case of small-scale mining, there may be some level of mechanisation during both the mining and beneficiation stages of the value chain.

Various laws have been implemented in countries, including South Africa, to govern ASM. Although this is the case, it is often practiced unlawfully. And this is evident by the galamsey in Ghana, the chikorokoza in Zimbabwe, and the zama-zamas in South Africa.

The Africa Mining Vision’s goal for ASM is “to create a mining sector that harnesses the potential of artisanal and small-scale mining to advance integrated and sustainable rural socio-economic development.” There is hidden potential in this complicated sector.

ASM in South Africa: the challenges

A challenge for ASM in South Africa is the lack of understanding the mining activities performed by artisanal and small-scale miners. Activities including mining methods, mineral extraction, processing, and beneficiation have not been well documented. Evidence-based research has not been used in ASM, making it difficult to compare it to its commercial counterpart.

In South Africa, the Mineral and Petroleum Resources Development Act of 2002 (MPRDA) regulates mining in general, including ASM. Section 27 of the Act explains the application for, issuing, and duration of a mining permit. Mining permits are granted if the mineral in question can be mined optimally within a period of two years and the mining area in question does not exceed 1.5 hectares in extent.

Despite the presence of the MPRDA as a regulatory measure for the ASM sector, it is still often practiced informally and illicitly. According to the Minerals Council of South Africa fact sheet of 2018, illegal mining in the country has an annual estimated commercial value of R7-billion. This is a great loss to the economy.

The reason artisanal miners work illegally is caused by various push and pull factors. First is the push factor of the socio-economic climate. The socio-economic status of many individuals in South Africa, both nationals and foreigners, drive them to look for other alternatives, including that of informal employment. Secondly, the pull factor of quick money. Many of the illegal miners are drawn in by the promise of making large sums of money in a short amount of time, but it is often a poverty trap. This is because illegal mining, as explained by the Minerals Council of South Africa, is a cartel-based industry.

Another challenge for ASM in the South African context is the capacity of the Department of Mineral Resources to oversee the sector. The Small-Scale Mining Directorate is mandated to assist small-scale miners in permitting, but this is often a challenge due to the nature of the sector. ASM is widespread, haphazard, informal, and transient.

ASM typically takes place in rural areas and consists of individuals who have limited education; this makes it difficult for them to apply on the Internet using the Small-Scale Mining Directorate’s online application system. Even in areas where there is a regional office that artisanal miners can go to, they are often met with the bureaucracy and red tape of the application process.

Mining is an environmentally invasive activity and damage to the environment is mitigated in the industry by enforcing regulations before, during, and after mining. There are also regulations for the ASM sector that must be met for mining to take place. This includes compliance with the National Environmental Management Act.

ASM in South Africa: opportunities

Looking at the contribution of ASM from other examples like Ghana, the sector has contributed USD460-million between 1989 (when the small-scale gold mining law was promulgated) and 2009; this is according to an academic article by Petra Tschakert. This indicates that the ASM sector in South Africa has potential to add to the economy if ASM is practiced within a regulatory framework that allows it to function lawfully and formally.

The Small-Scale Mining Directorate has differentiated the ASM sector by classifying it into three categories:

  • Artisanal or subsistence mining operations (new entrants);
  • Sub-optimal formal mining operations; and
  • Entrepreneurs with upfront capital.

This differentiation is an indication that the Directorate of Small-Scale Mining understands that the ASM sector is heterogenous and different stakeholders in the sector need to be engaged on different levels. This foundation is a practical way to start the process of formalisation.

Formalisation strategies

Formalisation has been suggested as an avenue to advance ASM but strategies to implement formalisation have not been detailed, nor have case studies been undertaken. But before one can discuss formalisation there must be an understanding of what is meant by formalisation. There are various schools of thought on what is meant by formalisation. The most pertinent aspect of formalisation is a continuous process of integrating already existing ASM systems into legal frameworks that are practical and implementable.

Where ASM is taking place in traditional communities, there are often informal practices. One of these practices is to pay tributes to the chief of the area where mining is taking place. This practice is similar to paying taxes to the state. This arrangement can serve as a starting point to formalise the sector, as there are informal arrangements that can already be paralleled in a regulated and formal manner. Thus, building a legal framework that integrates systems already in place.

Baseline research studies into ASM can provide much-needed insight into the sector. An interdisciplinary and multi-stakeholder collaboration can provide an understanding of ASM from different aspects, thus bringing together knowledge for policy development for ASM.

Making a distinction between invasive illegal mining and community-based informal mining can initiate formalisation. Zama-zamas that invade gold mines are typically trapped within the cartel system. This is a criminal five-tier system according to the Minerals Council of South Africa. While a group of individuals mining in a community with permission from the traditional leaders or community itself allows for the process of permitting to begin.

ASM has the potential to contribute to the economy, but this can only be done if it is firstly acknowledged as an avenue for livelihood and then developed and formalised through multi-stakeholder engagement. Only then can this complex sector be transformed.

Kgothatso ‘KayG’ Nhlengetwa is an independent mining geology researcher specialising in artisanal mining.