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Formalizing Liberia’s Artisanal Mining Sector, A Step in the Right Direction

Making improved Artisanal Mining a priority: Liberia’s Ministry of Lands, Mines and Energy launches a Regulatory Roadmap for the formalization of the West African country’s artisanal mining sector. The comprehensive policy document, based on a participatory consultative process and containing concrete and fully budgeted implementation activities, sets the course towards realizing both the revenue and the livelihood potentials of a long-neglected sector. 

Background

Artisanal mining (AM) didn’t receive a lot of attention in many countries for a long time, as its importance for the national economy was dwarfed by the contributions of large-scale mining.  However, in recent times and also boosted by the throttling-down of many large-scale mining projects due to the decline in commodity market prices, government authorities and the development community are setting the spotlight on this long neglected sector.

It is estimated that about 100.000 people are engaged in the artisanal mining sector of Liberia.[1] Artisanal mining of predominantly gold and diamonds contributes to Liberia’s national economy through royalties and taxes paid by licensed dealers and through income generated by those working in the sector, most of whom are rural dwellers.[2] Despite the sector’s mostly informal nature, the Central Bank of Liberia reports that in 2015, official export figures for diamonds worth 30.2 million USD were exported from Liberia, making up about 18% of all official mineral exports (iron ore, gold, and diamonds).[3] Prior to the commencement of operations of the first industrial gold mine in 2014, all gold and diamonds exported from the country were mined by artisanal miners – today this still remains the case for diamonds. This clearly shows the significant contribution of the artisanal mining sector to the Liberian economy and society.  

However, the sector remains largely under-regulated; previous studies commissioned by USAID put the proportion of miners without license at approximately 95%.[4] This informal nature of Liberia’s artisanal mining sector presents further risks of smuggling of minerals and inflow of illicit money.  The result of this lack of formalization are the loss of potential revenues from the sector as well as negative impacts on the health & safety of those engaged in mining activities, the environment - and thus potentially on the livelihood of others - as well as social distortions, ranging from drug abuse to conflicts between migrant miners and host communities.

Legally, the artisanal mining sector is restricted to Liberians. Section 4.2(h) of the Mineral and Mining Law of Liberia (2000) limits artisanal mining rights (Class C license) to Liberian citizens only. However, foreigners from mostly West African countries participate in AM activities as well – as manual laborers, so-called shovel boys, working the claims of license holders, as well as in other roles – or illegally, without licenses.

Barriers for entering into legal mining activities include, amongst others, high cost of mining licenses and that they can only be obtained in the capital city, lack of access to financing, limited knowledge on better mineral recovery techniques and mineral valuation as well as nontransparent supply chains.

The Process of Formalizing Artisanal Mining in Liberia – Developing the Roadmap

Given the economic significance of the AM sector and acknowledging the need for action in order to properly manage the sector, Liberia’s Ministry of Lands, Mines, and Energy (MLME) began a process of formalizing the AM sector in 2014, with the support of the Regional Resource Governance in West Africa Program, funded by the German and Australian governments and implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH as well as with initial support from UNDP. As an important milestone, this process has now resulted in a Regulatory Roadmap that clearly outlines the ground works, strategies, and resources that are required to formalize the AM sector in Liberia.

The process of developing the Artisanal Mining Regulatory Roadmap (AMRR) involved several community and regional level engagements. As a first step, pre-assessments of artisanal mining communities were held in regions of the country with known intensive gold and diamond mining activities with the objective of collecting baseline data, while at the same time building stakeholder awareness about the AM formalization process. Following the successful conduct of these pre-assessments, regional level consultations were held with all relevant stakeholders (amongst others were miners, shovel-boys, local leaders and authorities, government agencies and civil society). The purpose was to gather a comprehensive range of inputs and perspectives regarding the formalization themes as well as to better understand the different roles of the various actors involved along the artisanal mining value chain. As a final step in preparation of the Roadmap, policy sessions were held with senior officials of the MLME, to critically look at key thematic policy areas considered crucial for the formalization process and to develop adequate policy responses.

 

The AM Regulatory Roadmap - and what’s next?

The Roadmap itself offers the background of Liberia’s AM sector, outlining some of the challenges currently faced by artisanal miners, the current state of affairs of the legal and regulatory framework, and which specific initiatives need to be undertaken to improve the management of the sector. The AMRR outlines eight (8) key policy areas which are expected to serve as foundation of the formalization process. These are:

  1. Decentralization of MLME Governance Structures:

  2. Improvement of Accessibility to Licenses for Artisanal Mining

  3. Tracing and Reporting of Mineral Production and Sale

  4. Piloting of Artisanal Mining Umbrella Organizations / Cooperatives

  5. Improvement of Artisanal Mining Environment Management Practices

  6. Enhancement of Artisanal Mining Health, Safety and Security Practices

  7. Demonstration of Social Responsibility by Artisanal Miners

  8. Extension of Spatial Mapping Exercises and Supply-chain Analyses

     

These key policy areas are translated into concrete activities, including associated costs. The essential next steps will now be to roll out the specific activities under each of these thematic areas as indicated. Generally, the success of the entire formalization efforts will hugely depend on financial and technical support from stakeholders, including the Government of Liberia and development partners. As a first step, the Spatial Mapping Exercise and Supply-chain Analysis was piloted in three regions of the country. With support from GIZ, teams of mostly young geologist and MLME staff went out into the field to collect GIS data on mining activities and to further explore the mechanics and dynamics of the sector, in order to start a database of AM related information that will support a fact-based, sustainable, transparent and accountable management of the sector.

Formalizing the AM sector in Liberia is certainly a challenging task. However, the development and subsequent launch of the AMRR is a large step in the right direction, because the benefits of a formalized AM sector in Liberia could be enormous – increased government revenues and better opportunities and improved livelihood for many rural citizens.

Contacts:

Republic of Liberia
Ministry of Lands, Mines and Energy
Hon. Stephen Dorbor
Deputy Minister for Planning and Development
sbdorbor@yahoo.com

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
Regional Resource Governance in West Africa Program
Dr. Mark Mattner
Program Director
mark.mattner@giz.de

Website: https://www.giz.de/en/worldwide/15792.html



[1] World Bank Report 2012: Artisanal Mining in Critical Ecosystems. A Look at Gabon, Liberia and Madagascar. (Online). http://www.profor.info/sites/profor.info/files/docs/ASM-brochure.pdf


 


[2] There is yet to be a clear-cut and unanimously accepted definition of artisanal mining. This is partly due to the fact that countries tend to define the term differently.  Liberia’s Ministry of Mines’ Officials define artisanal mining as mining activities carried out by local populations using a high degree of manual labor and simple tools such as pickaxes, cutlasses, shovels, etc.


[3] Central Bank of Liberia: Annual Report 2015, Monrovia, January 2016. Online: https://cbl.org.lr/doc/annualreport2015.pdf


 


[4] Shefa Siegel (2014): Conceptual Background for Resource Governance in Liberia’s Smallholder Mining Sector

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