Regulating the artisanal mining industry

This article is prompted primarily by the recently launched road map to lifting the ban on small-scale mining.

It focuses on suggesting a win-win collaborative approach in resolving the ‘galamsey’ or artisanal mining problem.

Hopefully it could serve as an input into the road map announced by the Inter-Ministerial Committee on Illegal Mining (IMCIM).

The inherent challenges of artisanal mining (galamsey) are the lack of accountability and mitigating interventions or workable regulatory framework to institute punishment for infractions.

Additionally, the real beneficiaries and offenders in the current galamsey industry are faceless sponsors (investors) who make the bulk of the money without any tax obligations or social responsibility to the State or the community.

The previously announced Multilateral Mining Integrated Programme (MMIP) project outlines some solutions for small-scale mining and the communities affected.

In many ways, the ideas in this article do reflect the objects of the MMIP.

As with the MMIP, the ultimate beneficiaries are the current and future generations benefiting from the revenues of sustainable use of natural resources and good environmental quality.

The direct beneficiaries are the following:
a. Small-scale miners (the artisans);
b. Landowners and traditional authorities;
c. Farmers;
d. Mining communities and communities affected by mining activities;
e. Metropolitan, Municipal and District Assemblies; and
f. Utility service providers e.g. electricity, water, telecommunications.

Illegal mining is not galamsey

Galamsey or artisanal mining is mining by artisans using small tools and implements to gather gold, which they then sell. Galamsey as an act, therefore, can be legal if organised and regulated. However illegal mining, as the name suggests, is any act in mining that contravenes the laws of the land. Therefore, all conditions, methods and acts by miners (large or small, or artisanal) that break a law or regulation are illegal.

So what exactly are we fighting and what is the road map seeking to achieve?

The IMCIM is probably rightly named - a committee on illegal mining -, and that must be the focus: all the illegalities in mining. By focusing as above, we will fix a myriad of problems in mining in general, and consequently improve revenue, as well as sustain/maintain the economic benefits that galamsey (artisanal mining) can bring to a community and the nation.

Accountability frameworks exist in the large-scale corporate mining sector through our minerals law, and the direct supervision of the Minerals Commission (MINCOM), with significant interventions to mitigate, as well as punish any infractions.

It is my held view that we can model a self-sustaining framework for the small-scale and artisanal mining industry.

For the purpose of this piece, I separate small-scale mining from artisanal mining, to make issues clearer, as well as acknowledge that some previous efforts were made.

A collaborative approach - social enterprise framework

I am proposing the formation of a socio-commercial enterprise to operate artisanal mining in a regulated environment, to the direct benefit of the community and the artisans who ply the trade but today, do not receive the financial returns nor have the capacity to be accountable for the effects of their action.

The collaboration would be among the following key stakeholders:
1. The district assemblies
2. Traditional authorities
3. Youth cooperatives (of galamsey youth)
4. Designated large corporate gold mines
5. The University of Mines and Technology (UMaT)

The idea is not exactly new, as variations of it have been implemented in countries such as Tanzania, Zimbabwe and Sierra Leone, with a relatively high degree of success; which guarantees the needed control plus income for the artisans and the local government, while eliminating the faceless and mostly criminally minded sponsors.

Key beneficial elements include:
1. Controlled purchase of the minerals (Gold)
2. Expert advice (Input from professionals)
3. Improved revenue for community and State
4. Inherent commitment and funding for reclamation activities

Conditions precedent

Prior to the implementation of the collaborative framework, it may be necessary to redefine or realign the categories of mining within the sector, as well as enforce some strict measures.

We should define three main categories of corporate mining to be directly under the MINCOM regime, namely large-scale, medium-scale and small-scale mining. Large and medium scale are where all investors, including foreigners, can operate.

The third category, small scale (different from artisanal mining), will remain reserved for Ghanaians, with the requisite funding and resources.

These three categories are only separated by investment and technology thresholds and rigidly regulated by the MINCOM.

Further, we will need to strictly enforce restrictions on foreigners from small-scale and artisanal mining, as well as criminalise any mining activities along rivers and water bodies.

Finally, we have to restrict and regulate all gold-trading activities; only PMMC registered companies and the major mining companies may be allowed to purchase or export gold.

A framework for regulating artisanal mining

Having done this, artisanal mining should now be clearly defined as mining by indigenous citizens of a particular community, with minimal use of equipment and under a cooperative structure registered with a district assembly.

This collaborative process will inch us closer to solving the galamsey problem.
The key stakeholders in this collaborative process will have defined roles and responsibilities.

Summary activities and roles of stakeholders

The district assembly should organise indigenous artisans into legal cooperatives registered with each of the affected district assemblies. Each individual artisan should be documented as taxable economic being, biometrically if possible.

Each of these district cooperatives will partner with a recognised large mining company, whose role will be to sponsor and fund a miniature processing plant for the cooperative, and together with the University of Mines and Technology provide technical support and training.

The district assembly and traditional authorities in that district should form a committee (District Mining Committee or DMC) to manage the cooperative. The DMC will be trained and empowered to manage the technologies and process plants to be deployed, and will retain part of the gold revenue as management fee.

In this arrangement, the concession ownership and licence is vested in the district assemblies which is a recognised state body, and the district assemblies through the DMCs have responsibility for land reclamation and restoration, using allocated funds from gold earnings with advisory service from the partner mining company and the EPA.

The mining company that sponsors the respective cooperatives will have purchase right to gold produced at an agreed price.

The revenue generated will be split by formula among artisans (as salary), DMC for management fee and equipment maintenance.

The net revenue (profit) is retained by the district assemblies for application to development activities.

The writer is an entrepreneur and business executive with over 20 years working experience within the mining industry.