GOXI

sharing in governance of extractive industries

The Transformative Power of Fair Trade Gold Mining in Kenya and Tanzania

     I just came back from visiting small scale gold miners in Kenya and Tanzania that are seeking fair trade certification.  The trip was sponsored by Fair Trade International, funded by a grant from the UK charity, Comic Relief.  On site, I met with colleagues in from England and Africa, who have been working hard over the past two years to build an understanding of standards at the mine.  Part of the purpose of the visit was also to bring jewelers and miners together to discuss what was needed to bring fairtrade gold to market.

     First, a bit of background on small scale gold mining.   Small scale mining produces as much 25% of the world’s gold supply.  The image below is typical of what you’d see at one of these mines in Tanzania—a mix of people around water, dirt, diesel and machinery.

Photo B

     In the developing world, small scale gold mining is subsistence based, almost always illegal, unregulated, and extremely toxic.   A small scale gold mine can look like destroyed river banks or patches of toxic tailings in the middle of a rainforest.   Sometimes it is done part time, to supplement or substitute for agricultural.  Almost universally, it is considered huge problem in the developing world.  Annually, small scale gold mine spills 1400 metric tons of mercury into the environment– mercury is,one of the most dangerous of all neuron-toxins.

     Fair Trade gold  works with small producers.  What is considered small versus medium or large is not yet clearly defined.  One benefit of small scale  mining is that it employes a lot of people.  Worldwide, 60% of the gold is produced by large mining companies that might pay a small royalty to a government and export the gold out.  Large scale mining employes about 700,000 people.  Worldwide, small scale gold mining is done by 25 million people.   This potentially could be a a huge amount of money entering the local economies in producer communities.

     Fair trade succeeds in transforming small scale gold miners from a resource curse into in an environmentally responsible business initiative that alleviates poverty.  The operations I saw employed forty to sixty people.  They might produce between three quarters of a kilo and a kilo of gold a month.  Fair trade gold is not charity.  Fair trade provides a certification structure and credibility that allows fair business between empowered producers and ethical international business people.

     Below, Greg Valerio introduces us to the first mine in Tanzania.  Greg started the fair trade gold movement and currently directs Fair Trade’s international gold program.  In the background is Gonzaga Mungai who leads the Fair Trade Gold Africa team;  Tina Mwasha, Tanzania’s first woman mining engineer.  She devotes herself to helping small miners understand what must be done to do their work safely and achieve fair trade standards.

photo b1

PHOTO B-3     While some small scale gold mining involves digging big pits,  what we saw in the mines up for fair trade certification were shafts, as shown to the left.  As for the shafts themselves, though they are reinforced with timber.

 

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     The miners digs along gold veins and 50 kilo sacs of ore are hauled up from the holes, as shown.  Once a vein of ore is discovered, the miners follow it horizontally. How far they depends the go depends upon the type of ore that they are digging.  Cave ins are not uncommon.  I spoke with one of the local miners who told me the story how he was trying to take care of a number of orphaned children of dead miners.

     Here’s a close up of rock ore.  When you hold it, it feels much heavier than a normal piece of rock.

PHOTO I

     The amount of gold in a piece of ore varies, but a typical amount would be an ounce of gold per ton of rock, which may take a day to dig.  But these numbers really depend upon the particulars in a given site.  Some of the mines we visited had more than one pit going.   There are thirty-one grams of gold in a troy ounce and each one of these bags in the photo below might contain a gram or more of gold.

PHOTO C

     Often the rock that is hauled up needs to be dried out.  Shown below is a woman spreading out the ore to dry in the sun.

PHOTO G

     The next step, as shown below,  is crushing the ore into fine powder, which involves machinery.  When you walk on to an active site, you’ll hear the loud noise of the tumbler as shown in the tent in the background.

PHOTO J

     After the rock is crushed, the gold concentrated in the dirt.  This is done through sluices in containment ponds, as shown below.

PHOTO R

     The next step involves mixing the gold with mercury.   Mercury attaches to the gold and forms an amalgamation.   The photo to the left below shows how it is typically done.  The man is mixing mercury and the concentrated dirt with his bare hands. Mercury is so toxic that if someone broke a mercury thermometer in a high school science class they’d call a hazmat team in!   People who work with mercury do not really believe that it is that dangerous.

     The second shows a safe method by a worker amalgamating gold with mercury at one of the mines trying to attain fair trade certification.  Not how he is wearing protective gear.

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Photo L

 

     Now, the gold ends up looking like this, as shown below.  This photo was from a mining group that was not committed to working toward fair trade gold certification. 

PHOTO S

     Next, the typical unregulated miners would take the gold and mercury and put it in a pan to burn off the mercury.  This releases methyl mercury, a high dangerous toxic gas that stays in the environment.  The pan they used to cook off the mercury is often utilized for cooking afterwards.  However, with fair trade mines, a mercury retort, as shown below, is used which cools the gas and converts it back into mercury which can be reused.

Photo M

     I’ve had discussions with environmentalists and no one feels good about the mercury issue.  But it is very difficult to get small scale miners to abandoned mercury.  Over time,  with fair trade, the goal is to get small scale miners off mercury completely.  But in building capacity and employing best practices, we have to start with where the miners are.  Using cyanide is a better practice.  It is also possible to get the gold without chemicals. To do this requires equipment that costs about $20,000.  However, this “eco gold” gets an even higher premium.

     Once the miners get their gold, they sell it, often the same day.  A small scale gold miner might make between a half a kilo and kilo of gold a month.  Depending upon how pure the gold is, and the international spot price, a kilo of gold might have a value gold would have a value of between $40,000 and $45,000.

     But the gold miners don’t know the true value of their ore and they are never fairly paid for their efforts. They sell to middle men who buy their gold at up to 30% under its real value.  Also, because refining methods are not that efficient, miners can leave another 20% of their gold in their tailings.  They don’t have the equipment to get the full value of their ore. The miners from Uganda told us stories of how when they were selling their gold, they were often marked and robbed.

Because of the overhead and the underselling of the gold, the miners who typically make between $100 and $300 a month cannot prosper.   When fair trade gold standards are in place, gold is purchased initially at 95% and eventually at 98%.  There’s also a $2000 premium paid back to the miners per kilo which can be used any way that the community chooses.

     This additional income means families are able to better support themselves.  There’s more money in the local community for schools and other programs to improve their lives.  When we visited, the miners were very excited and eager to learn how to enter the system.  Below the remarkably passionate Willy Hamilton, from the Company of Master Jewellers in the UK explains to these woman the benefits of fair trade and how committed he is to bring it into the market in England.

Photo T

     There is also the issue of documentation and logistics.   This is a huge leap that is being facilitated by Alan Frampton, of Cred Jewellers, the world’s leading fair trade jeweller and buyer of fair trade gold.    Alan, shown with Tanzania mining leaders, has been instrumental in the process.  Typically, a miner sells the gold soon after he gets it, but Alan has offered to front the miners some money for labor so that they can accumulate a kilo of gold, which is the minimal amount required for economical shipping.

SONY DSC

     With more funds, the miners are able to better support themselves and buy equipment that will make their operations more efficient and safer.   Once their projects are underway and other miners see that they can make more money and have greater safety by following fair trade gold standards and principles, they too will naturally want to join in.  Slowly, over the next five to ten years, we could see a profound shift in entire small scale gold mining communities in Kenya and Tanzania.  Greater prosperity and safer working conditions.

     Our fair trade trip was also about building a greater community and recognizing how we share common values around social and economic justice.  To listen to the miner’s stories and meet the people on the ground from Africa was so moving and inspirational.  Below is the group from Kenya and Uganda.

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     As an ethical fair trade jeweler, when I have this gold, I can point to the hole from which it was actually dug and say that the wedding ring is profoundly helping small scale miners in Africa live a much happier and healthier life.  For the customer, what could be better than wearing wedding ring that in its very sourcing represents a more beautiful world that we all want to see?

     Together, with fair trade gold, we can accomplish a remarkable transformation.

PHOTO A

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Marc Choyt is shown above with artisan miner, Suleiman Otierno Aliwa, in Kenya.  Marc is Director of Fair Jewelry Action USA an environmental justice and human rights network.  He is also President of Reflective Images, an designer jewelry company based in Santa Fe New Mexico that sells  fair trade gold and unique artisan wedding rings and designer Celtic jewelry.  

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Comment by Antipas Massawe on May 28, 2014 at 14:06

Greg, thanks for your very honest advice and willingness to participate in the modernization of small scale gold mining in Tanzania practically. Tanzania is the gemstone, gold and tourist center in the region, meaning the country is also the most appropriate base for jewelers in the region as well. Bring all of them and they won’t regret.

You are very right that the fault belief of Governments in large scale against small scale gold mining is to blame for the underdevelopment of potentials in small scale gold mining in the region. In Tanzania for example small scale gold mining which dominate in major gold Districts like Lupa and Mpanda in South Western Tanzania has yet to take up its deserved lead in gold production within the region due to mining rules which prohibit the highly skilled and experienced foreign small scale gold miners to engage with their Tanzanian counterparts through small scale mining in the country.

The only way local small scale gold miners could engage partnerships with foreigners is to convert their small scale mineral rights into large scale rights which are subjected to stringent rules foreign small scale miners shy away from. The skills and experiences the highly skilled  and experienced foreign small scale would brought in through partnerships with the Tanzanian small scale gold miners  would enabled the sector to access financial services for the modernization to enhance productivity, efficiency in ore and gold recovery and mitigation of environmental pollution.

Small scale gold miners in Tanzania are discarding the low grade ore because the backward methods restrictive mining rules have tied them to won’t process and recover from such ore profitably and most of the gold in the high grade ore they process is left in the tailings, most which are left in small amounts here and there in the bush where they scatter as waste over the ground never to be recovered for reprocessing to recover the gold left in again.

 I strongly belief that allowing the highly skilled and experienced foreign small scale gold miners to engage with their Tanzanian counterparts through partnerships in small scale gold mining in the country constitutes the most effective foundation in the transformation of East African small scale gold mining into a leading gold mining sector in terms of production and contribution to economies in the region.

A great mistake was made by African countries like Ghana when they chased away small scale gold miners from China instead of devising rules which would enabled their participation in the local small scale gold mining sector to contribute positively in the modernization of the sectors and more  in their economies.

It was a bad treatment to the small scale gold miners from China because implication is that the African countries would welcome the super rich foreigners only and reject the others who are similar to the struggling small scale gold miners in Tanzania.

Comment by Greg Valerio on May 28, 2014 at 9:15

Dr. Antipas is correct, the potential for ASM across East Africa is huge. As I see it governments in the region are captive to two problems. 1) They believe the lobbying done by Large scale miners whose basic narrative is large is good and small is bad - trust us and we will help your country to grow economically. This simply does not happen, LSM has little or no positive social impact that is sustainable or detached from their profits. Secondly we in the progressive development set, have failed to demonstrate working models of good practice. This is why I am now so encouraged by the work of Fairtrade Africa. They are demonstrating the potential, through working models, that ASM can be a force for the good for the whole community, environment and nation as a whole.

Comment by Antipas Massawe on May 27, 2014 at 8:44

The potential in small scale is many times that in large scale gold mining in East Africa (especially in Tanzania) but yet to take it’s deserved lead in gold production in the region due to lack of access to financing and methods which are not effective in terms of productivity and in ore and gold recovery, and which poison the environment with mercury. It is a huge potential in the small scale gold mining sector still waiting for others to farm in with the financing to enable appraisal of reserves and their attractiveness for the investing of financial institutions and /or individuals in the exploitation which would be highly productive and efficient in ore and gold recovery, and friendly to the environment. The farm in could enable small scale mining clusters to share employed professionals, equipment and milling and cynadation plants, and transformation of small scale gold mining into highly productive and efficient small and medium scale mining which leads gold production in East Africa (especially in Tanzania).

Cred Jewellers of UK and Dar NSSF targets small-scale miners - Business - www ...

                                www.theeastafrican.co.ke/...NSSF...small-scale-miners-/-/.../-/index.html)

have shown the way, all other stakeholders should follow.

Transformation to happen simply needs Governments in East Africa to encourage East African small scale miners to share in partnerships with the highly experienced foreign small and medium scale gold miners .

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