The current global crisis caused by Covid-19 has an impact on all the actors in the gold supply chain, from the artisanal and small-scale miners to refiners, manufacturers, brands and consumers.
By: Conny Havel, Head of Supply Chains and Markets at the Alliance for Responsible Mining (ARM)
The current global crisis caused by Covid-19 has an impact on all the actors in the gold supply chain, from the artisanal and small-scale miners to refiners, manufacturers, brands and consumers. The miners are generally the most vulnerable group in this chain and Covid-19 poses additional challenges to their already complex situation. Although gold processing companies currently face their own specific challenges due to the impact of Covid-19 on their markets and clients, they are also aware that those who extract the gold need to be supported, now more than ever, to prevent negative long-term impacts in their communities and their environments. Furthermore, to avert setbacks to hard-earned progress towards more responsible mining practices achieved throughout the last years.
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How does Covid-19 impact artisanal miners and small-scale mining organizations?
Artisanal miners, or subsistence miners
They are mostly people living in rural and mostly remote locations that pan gold or select and process minerals to sustain their families, or as a complementary income for their households. They often have little or no saving capacity and depend on their daily income to make a living. Mostly, they live in situations of extreme vulnerability where alterations in their income can have significant impacts on their livelihoods. Due to Covid-19, many artisanal miners haven’t been able to continue with the mining activity due to lockdowns, prohibition of public gatherings and the closure of mining sites. Some miners were able to continue with mining, but they have been facing difficulties in selling the gold, as many local formal buyers suspended operations. In this case, their only option is to sell their mineral to informal traders at prices that could be up to 50% lower. This isn’t only unfair towards the miners, but also contributes to the black market, does not generate royalties for the states and increases the risk of benefiting illegal groups.
Small-scale mining organizations
They are small businesses with basic infrastructure to mine and process material with a limited production capacity. They often are very important for the local workforce and development. Many of them needed to stop their operations for weeks or months due to lockdowns. As employers, they often are unable to assume the payroll and social security costs of their workers beyond 1 month without operations. Mine workers generally live off a minimum wage and may sustain 2-4 people within their household with this income, therefore when they are laid off, they also face situations of extreme vulnerability as there are hardly any social security nets to support them.
How can the gold industry support the artisanal and small-scale mining sector?
- Set less stringent trading terms, pre-financing, taking over logistic costs (international and local) and paying the best possible price for the gold.
- Donate to the mining communities or give them loans with low interest and longer grace periods.
- If possible, buy higher volumes from artisanal and small-scale mining.
- Do due diligence that contributes to the further development of the miners and their communities.
- Financially support those programs that contribute to the transformation of the sector and assure your future responsible gold supply.
You don’t know how to do so or where to start? Don’t worry, you don’t have to do this on your own. Write us to firstname.lastname@example.org to find out how we can support you.