Banro and USAID Artisanal Mining Support a Positive Step

Friday, 20 December, 2013

Artisanal mining is often the elephant in the room during discussions concerning CSR. Alongside nationalization, it is the pariah of the mining industry, an issue that goes beyond CSR, tangled in deep socio-economic specificities and often resulting zero-sum stand offs.

The issue is highly sensitive: artisanal miners risk their lives searching for valuable minerals because they live in poverty, but they are often competing with large, domestic or foreign mining companies for the same mineralization. Corporations can lose millions through artisanal mining meaning they are compelled to deploy security measures to protect their asset, but in that act, they are preventing income to some of the poorest people in the world; the situation is exacerbated when the company is foreign, as the perceived injustice is enhanced.

Violence frequently erupts with shootings, human rights abuses and coercion abundant when artisanal miners, security forces and endemic poverty mix. Sometimes artisanal miners fight the company, sometimes they fight each other.

The situation recalls another major social lesion: the drug trade. A black market, illegal economy, unregulated and often violent, artisanal mining resembles the underworld of drugs. And like the drug trade, there are two proposed cures: ‘formalize’ it through legalization and commercialization, or wage ‘war’ against it by seeking to simply eradicate the participants, as the US has been doing on drugs for the past 15 years, with horrendous consequences.

                                                                       

The parallel between the drugs trade and artisanal mining goes further, as the mining industry, like governments, adopt contradictory and multilateral approaches with no unified strategy. But it seems that in both sectors, the ‘formalization’ approach is coming into ascendancy. With Colorado’s Amendment 64, and Uruguay’s recent full legalization, legalizing and formalizing drugs is making ground.

So too in mining, and gold producer Banro’s recent announcement that they are partnering USAID to formalize 3000 Congolese artisanal miners is a massive humanitarian step. Banro is a clear leader in its community work, perhaps incentivized by their location in the troubled Congolese Kivu provinces. But this ambitious plan is potentially their best yet, and could provide a universal model for the future.

“USAID and Banro have each pledged $2 million for the artisanal mining program, which will used to relocate workers and formalize the trade so the gold can be certified as conflict-free…the support could be extended to other mining companies in the region.”

Banro will grant concessions on some of their land licenses for artisanal miners to explore and mine in a regulated, safe environment. The money pledged will go towards the costs involved in setting such a framework up: "The goal is to find an alternative site for small-scale miners to dig on Banro’s land concession and promote other sources of income-generation".

“The mining sector will be the engine of growth in Congo and our goal is to build public-private partnerships ensuring that as it develops it will promote transparency, rule of law, help fight corruption and ensure that benefits of economic opportunity accrue to the poor,” said Rajiv Shah of USAID.

The move would be welcomed by the ICMM whose pilot paper in artisanal mining ‘Working Together’, provides a comprehensive outline of the issues and solutions to the problem; it’s well worth a look. So far Ghana and Peru are the only two notable examples of governments taking serious strides to formalize artisanal mining, with mixed results. Will this number be expanded in the coming years, as the formalization becomes more popular?

(image courtesy of Africa at freedigitalphotos.net)