How should a large mine best manage risks arising from Artisanal and Small-scale Mining? Here is how we approach it at Levin Sources.
At Levin Sources we’ve been helping mining companies handle artisanal and small-scale mining on and around their concessions since 2007. From Sierra Leone and Ghana to Senegal, Mali and Ivory Coast to Mozambique and DRC, for gold, copper-cobalt, diamonds, and coloured gemstones, we have helped small, mid-size, and large mining companies build value by preventing issues arising from ASM and helping secure the licence to operate with local stakeholders.
As part of our desire to empower mining companies to work better with ASM, we have developed a set of approaches that companies can adopt according to their values, risk profile, and the ASM situation they’re confronting. Our approach to managing LSM-ASM relations rests on 4 main pillars, usually brought together under a tailored ASM management system:
- Security and asset protection, including a monitoring and reporting system, emergency procedures and security Standard Operating Procedures aligned with the UN Voluntary Principles
- Compliance and reputational management, including documenting or preventing impacts caused by ASM (environmental, health and safety, etc), and establishing an internal chain of custody
- Strategic community engagement and investment through integrating ASM stakeholders and recognising and supporting ASM as a viable and safe livelihood
- Broader strategic interventions, such as supporting national or international initiatives on ASM formalisation
We commonly use this four-pillar approach when our client’s goal is to choose a model where peaceful co-existence is the ultimate goal. This model usually consists of defining different ‘security zones’ and different types of ASM activity, and devising a response plan for each. This often includes a ‘no go zone’, where voluntary departure is negotiated or displacement/resettlement takes place as last resort, and a mitigation hierarchy is applied to all actions. This model avoids escalation and keeps costs manageable, but needs to be based on an extremely thorough understanding of the local ASM context and dynamics. This model has worked best with clients that are hesitant to engage with ASM on a broader scale.
Besides the co-existence model, there are also other LSM-ASM management models that rest on these four pillars and can be successful and innovative if the context is right. Some companies choose a cohabitation model, which can take two separate forms. One is where the LSM company supports the establishment of a viable ASM zone or mine in the surrounding area, but outside of their concession. This is usually done as part of a multi-stakeholder initiative, together with the authorities and civil society, which supports the ASM operator with formalisation and getting a permit, organisational capacity, or technical assistance. A second option is where a company cedes part of their permit area to an ASM operator under a formal agreement. This may be a part of the concession that is of less interest to the company but is still exploitable by ASM. This option helps improve relationships and protects the most valuable asset, but is only possible in certain legal contexts. In both options, a company can choose to work with the government and other partners to support the ASM operator proactively, by helping them to become formalised, and to make their practices safer, efficient, and more environmentally friendly.
A collaboration model takes this one step further and consists of leasing part of the concession to an ASM operator, and/or buying their product back through off-take or tributary arrangements. This usually involves a formal contract with the ASM as a supplier, including minimum standards of operation, a chain of custody system, and direct support for the ASM operator to help them operate responsibly and achieve the required standards, e.g. increasing occupational health and safety, reducing environmental impacts, or addressing child labour and other social issues. Often, a multi-stakeholder partnership between the company, Government, civil society organisations and the ASM operator is necessary to put this in place. This model comes with higher legal and due diligence requirements, but can be an innovative way to create a win-win situation for both LSM and ASM (and help improve ASM’s operational practices).
Unfortunately, the initial instinct of many LSM companies faced with ASM on and around their concession is to apply none of these models, and instead choose a path of confrontation and exclusion. In this scenario, mining companies only deal with ASM through a security-led approach, using forced evictions as the main tool, and not applying any of the other four pillars of an ASM management system. We have seen that this can lead to human rights violations, increases tensions, and can result in violence against staff and assets, loss of license to operate, reputational damage, as well as potentially huge costs.
In some cases, clients bring us in when it’s too late – when people have died, when community relations are so deteriorated that it is disrupting operations, or when human rights have already been violated. We therefore encourage LSM companies to consider ASM as a material issue and one of their salient human rights risks, which should be dealt with from the beginning and as an integrated part of other management systems throughout the mine life cycle
The models presented above are a synthesis of our experience, but each case of an LSM-ASM relationship is different. We are keenly aware of this and always adapt to the context to generate win-win solutions. To learn more about how others have used our services, check out our case studies with Gemfields and Metalkol.
Additional resources:
- Owen, J.R. and Kemp, D. (2019) A large-scale perspective on small-scale mining. Centre for Social Responsibility in Mining, Sustainable Minerals Institute, The University of Queensland: Brisbane.
- World Bank, CommDev, ICMM 2011: Working Together – How large-scale mining can engage with artisanal and small-scale miners.
- World Bank. 2009. Mining Together : Large-Scale Mining Meets Artisanal Mining, A Guide for Action. Washington, DC.
- IRMA chapter on ASM
- GRI / ICMM Mining and Metals Sector Supplement, Indicator MM8 on ASM
Find out more about our work on LSM-ASM relationship in the Extractive Hub newsletter here.
