SA Gold Expert: Bring Informal Miners Into the Mainstream Supply Chain 

Cape Town, 28 April, 2015 – More effort should go towards helping African informal gold miners formalize their activities and become part of the mainstream gold supply chain. This is in the best interest of all parties involved, argued South African gold expert Bernard Stern in his address during the recent Dubai Precious Metals Conference, which was themed ‘Engaging with Africa’.  On paper, Africa's total gold production is estimated at some 600 tons per annum, of which the bulk is mined in South Africa (168 tonnes in 2014), followed by countries like Ghana (104), Tanzania (50.8), Mali (48.6), Burkina faso (38.9) and the Democratic Republic of Congo (38.5). The amount of gold mined in Africa is likely to be much more as the above figure excludes gold mined by artisanal and informal gold miners. The scope of informal gold in Africa is difficult to determine as most small-scale miners in Africa operate under the radar, said Bernard Stern, co-founder and CEO of South Africa's oldest privately owned precious metal refinery Metal Concentrators (MetCon). “The metal they dig up and sell to informal dealers, seldom ends up in the books, metal reports, and government statistics,” he explained.  The Communities, Artisanal and Small-Scale Mining (CASM), a World Bank initiative, estimates that globally, artisanal mining accounts for some 330 tonnes of gold per year. That is just over half of all the metal dug up in Africa. “The number of informal miners in Africa is huge,” said Stern. “During the conference in Dubai, I spoke to a representative from the DRC. He told me that his province alone harbors some 300.000 artisanal miners. This is just one province in one country.” Stern said that helping Congo's informal miners and their counterparts elsewhere on the continent such as South Africa, is in the best interest of everyone. “Firstly, it would improve the existence of informal gold miners, whose lives are often characterized by exploitation, hazardous working conditions, and chronic poverty,” he said. “In the DRC for instance, informal miners often receive a low price for what they extract, whilst facing systemic exploitation. Mining sites in this part of the world are often controlled by powerful individuals, political figures, and armed groups.” “They work in extremely dangerous conditions, usually without any safety equipment. Serious and fatal accidents on mine sites are regularly reported,” a 2013 Amnesty International report states, adding that artisanal miners are often subjected to threats, physical assault and ill-treatment at the hands of mining police and security guards. Making artisanal gold miners part of the mainstream supply chain has benefits for the extractors, Stern said: “This allows them to get better prices for their gold. This improves their cashflow and being part of the formal economy improves their access to, for instance, loans and other financial services. Governments and NGOs should assist the informal miners to enter the mainstream by assisting them to form cooperatives. This would enable them to sell larger quantities and become formal entities.”   Governments too will benefit from this, he added. “The production and sale of artisanal gold happens under the radar, is cash-based, doesn't end up in the books, and therefore won't contribute to the development of the continent. We are talking about 330 tonnes of gold per year, globally,” Stern said. “That is almost 12% of the world's total annual output.” Whilst absorbing informal miners into the mainstream supply chain, governments and civil society should join hands and teach miners sustainable and safe techniques. “Not only does this help prevent accidents like we have had in the past, as artisanal gold mining can be dangerous, these techniques are also more efficient than most artisanal miners are using. This will aid them in their production,” Stern said. In the case of South Africa, increasing the gold production is vitally important for the economy. Stern: “We need all the gold we can get. An analyst from Goldfields said during the Dubai conference that our gold mines have a remaining life span of 20 years, and that gold production is already taking knocks.” From that point of view, more should be done to push the gold recycling sector, he added: “Africa, per annum, recycles just over 50 tons of gold. South Africa could increase recycling locally if government restricted the export of gold scrap and only allowed the export of refined or beneficiated gold.