The African media is rife with stories of illicit artisanal and small-scale miners (ASM) being shot by officials, chased by guard dogs, and brutally killed on diamond fields while trying to find a means to support their families. Granted, the miners’ actions are against the law, but these largely uneducated, desperate and poverty-stricken individuals are willing to take the risk in order to secure an income. They have no other training, their skills are limited, and the career market is hardly ripe with opportunities.
Even more disturbing is that many of the mining sites on which ASM workers trespass lie fallow. The large-scale mining operations that own the property have already picked over and plundered the grounds, and the small number of carats that remain are not economically viable for big companies to remove.
“Conflict arises between artisanal…and large-scale miners when, for example, [the latter] leaves a site, and then small-scale miners move in to go through the tailings,” says Ian Rowe, director of DDI@Resolve — a responsible-sourcing program established last July when the Diamond Development Initiative (DDI) merged with the nongovernmental organization (NGO) Resolve. “Large-scale miners still have ownership of the operation, and more often than not, they [aren’t] happy to see increasing numbers of artisanal miners come in to clean up after them.”
In countries that contain a large number of impoverished communities, allowing artisanal mining would seem like an ideal way to let its citizens make a living. So why aren’t more governments legalizing the sector?
The weight of stigma
Artisanal mining of various minerals supports more than 44 million people worldwide, according to Delve, a global ASM data platform that American NGO Pact and the World Bank have developed. Of that number, approximately 1.5 million people earn their living from diamond mining, says Feriel Zerouki, senior vice president of international relations and ethical initiatives at De Beers.
Zerouki is also general manager of De Beers’ GemFair sourcing program, which helps ASM workers operate ethically and secures a route to market for their goods. The problem, she believes, is that the ASM sector suffers from the stigma of its connection with human-rights abuses and child labor.
“Legal recognition is the first step toward using the artisanal mining sector as a force for good, and a force for development,” she asserts. “But the artisanal mining sector has been stigmatized in the past. Many people feel that it’s a story of despair, when it’s not. I think, personally, it’s a huge story of development. It’s a livelihood issue.”
However, sometimes the reasons governments won’t legalize the sector are less obvious, and more difficult to solve. Because many artisanal miners are from poor towns, they don’t have access to proper education. This means governments need to set up programs to teach them how to register properly, obtain a license, and mine economically, while also staying abreast of the oversight and reporting necessary to secure Kimberley Process (KP) approval so their diamonds can travel through legal export channels to premium markets like the US and China.
In Sierra Leone, one of the countries where GemFair operates, artisanal mining has been legal since 2009, but there are often issues with large mining companies.
“We ask large-scale miners to encourage artisanal miners to operate within their concession,” says Mohamed Gaima, regional manager at the country’s National Minerals Agency. “But we have some instances where we have licenses issued to big companies, and some of them will not give us the permission to legally issue artisanal mining licenses within their concession.”
Outside forces can also have an impact on the sector. In Lesotho, artisanal mining had been legal since the 1950s, but the country prohibited it in 2004 for environmental reasons. Lesotho has a program through which it sells approximately 18,000 liters of water per second to neighboring South Africa, explains Lesotho mining commissioner Pheello Tjatja, and the practices associated with artisanal mining were leading to water pollution.
“That was the main reason for illegalizing artisanal mining,” he asserts. “At the time, we were not very clued up on environmental controls as a country. But now, with the mining and environmental expertise we have in the ministry, and [the] new environmental laws we [have] introduced, we think we can solve the problems we had before.”
Turning the tide
In November, Lesotho took its first steps toward repealing the prohibition by passing the diamond amnesty law, which allows artisanal miners who have obtained diamonds illegally to declare them to the government without repercussions.
“We determined that if we reintroduced diamond digging while people still have [illegal] diamonds in their hands, they are going to pretend that they mined them from the new deposits that we intend to allocate them, which will skew our numbers and distort our diamond data,” Tjatja says.
GemFair, which is already well-established and making great strides in Sierra Leone, plans to expand its reach to Guinea, Liberia and the Ivory Coast, while DDI@Resolve is working to legalize mining in the Democratic Republic of Congo.
However, with artisanal mining still prohibited in diamond-rich countries such as Angola, Zimbabwe and South Africa, the question is whether it is feasible for all nations to legalize the practice. Are the methods of the Sierra Leone and Lesotho governments, GemFair, DDI@Resolve and other organizations exportable as a whole?
Rowe believes the answer is yes. It is both possible and desirable to establish a formal system in all of these locations, he says, because of the “advantages it offers not only to artisanal miners, but also to large-scale miners and…governments in terms of reducing conflict, putting in place safe labor practices, avoiding environmental degradation and minimizing criminality. These are all key.”
No simple task
Unfortunately, the road to legalizing artisanal mining is complex and often fraught with difficulties that governments must address first.
“The steps are, I think, very straightforward in terms of what we need to see happen, but they’re more complicated in their execution,” states Rowe.
To begin with, governments need to establish a system that provides these miners with legal standing, he says. This will give them access to the standard rights of any citizen in terms of fair wages, labor, and on-site health and safety, as well as ensuring basic human rights.
In addition, he argues, countries should have a structure in place to formalize the mining process itself, since the regulations and requirements are often prohibitive to ASM workers. In most cases, they don’t have the resources to conduct site evaluations, institute safety requirements and purchase the proper mining licenses to support their operations.
“These are all elements [that] are accessible to large-scale miners, but obviously people that are living on the poverty line [are] never going to be able to meet these criteria,” stresses Rowe.
Problems persist even in Sierra Leone, which has been consistently fine-tuning its artisanal mining sector over the past decade. The sector — which comprised about 1,600 workers in 2019 and accounted for approximately 52% of the country’s rough diamonds in 2016, according to Gaima — is highly dependent on parties known as “supporters.” About 70% of the country’s artisanal miners received full financing from these informal backers, Zerouki claims; of those, 73% repay their debt to their supporters in diamonds.
“This basically creates a situation where the supporters, not the miners, determine the price of a diamond,” she says. “I’m not saying all supporters act this way, but it’s obviously in their interest to depress that price and keep the miner in debt and indebted to them [for] as long as possible. This cycle of dependency and debt creates knock-on effects, but the support is critically important for the [artisanal miners] to remain employed, to feed their families, and to provide the baseline securities that we all take for granted.”
Reaping the benefits
The drawbacks of legalizing artisanal mining are minor compared to the potential advantages governments can gain. To begin with, says Rowe, the move would not only help eliminate conflict between large-scale and artisanal miners, but create a symbiotic relationship.
“Once large-scale miners leave large mines because their machinery no longer picks up enough rough to justify the investment, you can create an employment structure where the companies are, in essence, paying the small-scale miners to do the work they can no longer do,” he explains. “That creates a system which is less about people coming into your house and stealing than it is about you paying to have people come in and do the work you are not able to do.”
Another major plus of decriminalizing artisanal mining is that it would curb black-market diamond selling and smuggling. Not only is this a condition for receiving KP approval, it is a way to increase overall revenue for both countries and governments.
“If it’s not legal, [that’s] a whole sector [a government] can’t count as part of the overall country economy,” points out Rowe. “By formalizing it and putting in legal structures, rules and regulations, you allow it to contribute to your country’s economy. It’s hard to tax something [that] technically doesn’t exist.”
Furthermore, governments that don’t monitor their artisanal mining communities are not aware of how much they are losing because of illicit operations, suggests Gaima. Decriminalizing the sector has enabled Sierra Leone to eliminate much of its black market — a move Lesotho is now working to replicate with its own 200 artisanal miners — and to empower its citizens to improve their circumstances.
“Once diamonds have been exported, the [Sierra Leonean] government takes a royalty from the proceeds,” Gaima continues. “It then gives a portion of that royalty back to the communities in which the artisanal mining was performed, known as the Diamond Area Community Development Fund.”
That money, which is one of the main sources of revenue for artisanal diamond mining communities, goes toward building up the towns and bringing them out of poverty. “Now, when you go to these communities, you can see structures like community health posts, schools that have been updated and rehabilitated, a community hall and multipurpose center — all constructed using those funds.”
A route to transparency
The ability to monitor the flow of artisanally mined diamonds reaches beyond the black market, the KP, and even taxes and royalties.
“With legality and formalization comes transparency and increased accountability, and this is all facilitated by the government’s capacity to monitor what’s happening in terms of the mining industry,” notes Rowe. “Governments, [the] private sector and other stakeholders involved in the supply chain have become more aware of the importance of ensuring that the diamonds passing through their hands have passed through an accountable and responsible system.”
Traceability for rough diamonds is an issue Sierra Leone is currently working to clear up.
“There are several challenges in terms of traceability,” says Gaima. “We definitely report more in terms of the exports compared to what we get from the pits. So what we are now trying to do with our new mining law, which will come into effect early this year, is to form cooperatives, because that will make it easier to supervise operations and provide more traceability — something [that] is very important to us right now.”
Zerouki agrees, asserting that the ability to decisively identify stones’ provenance is extremely important for the future of the diamond industry.
Those who don’t think about it or work to achieve it will find themselves at a disadvantage when it comes to selling their diamonds overseas in the near future, warns Rowe, citing the public’s increasing interest in transparency when it comes to the provenance of diamonds. “People have options now. They have the option of lab-grown, and they also have the option of a natural diamond that can be traced all the way to its point of origin…. Governments that choose to ignore that, I think, are probably doing [themselves a] disservice.”
Article from the Rapaport Magazine - February 2021. To subscribe click here.