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The Impact of Small-Scale Mining Operations on Economies and Livelihoods in Low- to Middle-Income Countries

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The Impact of Small-Scale Mining Operations on Economies and Livelihoods in Low- to Middle-Income Countries The Impact of Small-Scale Mining Operations on Economies and Livelihoods in Low- to Middle-Income Countries January 2018 This document is an output from a project funded by the UK Department for International Development (DFID) through the Research for Evidence Division (RED) for the benefit of developing countries. However, the views expressed and information contained in it is not necessarily those of, or endorsed by DFID, which can accept no responsibility for such views or information or for any reliance placed on them. Contacts: Pact Global UK Ravenswood, Baileys Lane Westcombe, Somerset BA4 6EN U.K. +44 (0) 7584651984 [email protected] [email protected] Alliance for Responsible Mining Calle 32 B SUR # 44 A 61 Envigado, Colombia +57 (4) 332 47 11 [email protected] [email protected] Authorship: This report was prepared by Dr Maria Laura Barreto (team leader, legal aspects), Patrick Schein (economic aspects), Dr Jennifer Hinton (technical and social aspects), and Dr Felix Hruschka (context, mapping and compilation) as part of the EARF project ‘Understanding the Economic Contribution of Small-scale Mining in East Africa’ covering Kenya, Rwanda, and Uganda. The authors wish to acknowledge the important research assistance of Elizabeth Echavarria and Marina Ruete from ARM. Special thanks are extended to the project’s Expert Advisors Majala Mlagui (Kenya), Stephen Turyahikayo (Uganda), and Augustin Bida (Rwanda); Pact staff Jacqueline Ndirangu and Ildephonse Niyonsaba; Project Co-Managers Cristina Villegas of Pact and Géraud Brunel of ARM; the DFID EARF leadership who funded this study; and the in-country DFID representatives of Uganda, Kenya, and Rwanda, with whom the researchers met while conducting in-country assessments. About Pact and ARM: International not-for-profit organisations Pact and ARM are jointly responsible for this report’s contents. Both organisations are independent yet partner on a project by project basis to promote and achieve excellence in natural resource management, improve social and environmental responsibility within artisanal and small-scale mining, and assist communities to gain lasting benefit from the more sustainable use of the natural resources around them. Contents Abbreviations and Acronyms .................................................................................................................i Executive Summary...............................................................................................................................iii 1. Introduction ........................................................................................................................................1 1.1. Background ...........................................................................................................................1 1.2. Purpose of this Study ............................................................................................................1 1.3. Methodology ..........................................................................................................................2 1.3.1 Limitations .............................................................................................................2 2. Definition of ASM ...............................................................................................................................3 2.1. Evolution of International Understanding of ASM .................................................................3 2.2. ASM Definitions in East Africa: Kenya, Rwanda, and Uganda .............................................4 2.2.1. Kenya .................................................................................................................4 2.2.2. Rwanda..............................................................................................................4 2.2.3. Uganda ..............................................................................................................5 2.2.4. Comparison of East African ASM Definitions ....................................................5 3. Economic Contributions of ASM .....................................................................................................7 3.1. Employment and Income Generation ...................................................................................9 3.2. Macro-Economic Value Generation ................................................................................... 11 3.2.1. Gross Domestic Product ................................................................................. 11 3.2.2. Export Figures ................................................................................................. 11 3.2.3. Government Revenues ................................................................................... 13 3.3. Micro-Economic Entrepreneurial and/or Livelihoods Aspects of the ASM Sector ............. 14 3.3.1. Effects of Shifts in Livelihoods Activities on ASM .......................................... 14 3.3.2. Positive versus Negative Economic Impacts of ASM ........................................ 14 3.4. Examples of Economic Impact of ASM in East Africa ....................................................... 16 3.4.1. EARF Case Study: Kenya .............................................................................. 17 3.4.2. EARF Case Study: Rwanda ........................................................................... 20 3.4.3. EARF Case Study: Uganda ............................................................................ 22 3.4.4. Summary of Economic Key Indicators ............................................................ 25 4. ASM Formalisation ......................................................................................................................... 25 4.1. Background On and Complexities Surrounding Formalisation of the ASM Sector............ 25 4.2. Examples of Formalisation Experiences ............................................................................ 27 4.2.1. Ghana ............................................................................................................. 27 4.2.2. Mongolia ......................................................................................................... 28 4.2.3. Peru ................................................................................................................ 29 4.2.4. Philippines ...................................................................................................... 29 4.2.5. Tanzania ......................................................................................................... 30 4.3. Formalisation of ASM in the EARF Case Study Countries ................................................ 30 4.3.1. Kenya .............................................................................................................. 30 4.3.2. Rwanda........................................................................................................... 31 4.3.3. Uganda ........................................................................................................... 32 4.4. ASM Commercialisation as an Alternative to ASM Formalisation ..................................... 32 5. Discussion and Lessons Learned ................................................................................................. 33 5.1. Key Points for Understanding the ASM Sector .................................................................. 33 5.2. Identified Gaps and Limitations of this Study ..................................................................... 34 5.3. Findings and Conclusions .................................................................................................. 34 5.4. Recommendations ............................................................................................................. 36 Annex 1: Bibliography......................................................................................................................... 40 Annex 2: Selected Definitions of Artisanal and Small-Scale Mining, Compiled by Hilson & McQuilken 2014 ............................................................................................................................. 51 Annex 3: ASM Countries and Number of ASM Miners According to Different Sources .............. 52 Annex 4: Proxy Indicators for Business Context of ASM Formalisation ....................................... 55 Impact of Small-Scale Mining Operations on Economies and Livelihoods in Low- to Middle-Income Countries Abbreviations and Acronyms 3T tin, tantalum, and tungsten AM artisanal mining ASGM artisanal and small-scale gold mining ASM artisanal and small-scale mining CAR Central African Republic CBO community-based organisation COMIKAGI Coopérative Minière of Kababaru-Gikingo CSO civil society organisation DFID U.K. Department for International Development DRC Democratic Republic of Congo EARF East Africa Research Fund ESIA Environmental and Social Impact Assessment FDI foreign direct investment FECOMIRWA Fédération des Coopératives Minières au Rwanda (Rwandan Federation of Mining Cooperatives) FY fiscal year g gram(s) GDP gross domestic product GLR Great Lakes Region GNI gross national income GOR Government of Rwanda ha hectare(s) HSE health, safety, and environment ICGLR International Conference on the Great Lakes Region ICMM International Council on Mining and Metals IIED International Institute for Environment and Development IISD International
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