ASGM and COVID-19: Policy Responses to the Pandemic

By Shawn Blore - April 27, 2020

Posted in: Categories COVID-19 Tagged as: Tags Policy

POLICY RESPONSES

The COVID-19 pandemic has frozen ASM supply chains worldwide, drastically reducing ASM producers’ incomes and leaving already fragile ASM communities even more vulnerable. Below is an annotated list of the policy responses that have so far been developed to address this challenge.  Papers are listed in alphabetical order by organization name.

(Readers – if there are any gaps in this list do please let us know. We will attempt to update this page as the COVID crisis evolves)

ARM

Image from ARM

Impact of COVID-19 on artisanal and small-scale mining

Apr 6, 2020, by Alliance for Responsible Mining

• Focused on the situation in Colombia, where COVID-19 quarantine measures have had severe effects on country’s 400,000 artisanal miners, many of which already vulnerable
• Colombia Decree Law 457 of 2020 permits the continuation of activities related to the production and export of minerals, but appears to apply only to coal
• Both informal and formalized ASM miners prevented from mining, by combination of roadblocks and lack of sales outlets (esp. for gold)
• To mitigate the situation, ARM recommends measures related to distribution of aid to miners and measures to re-start stalled ASM exploitation. Details include
• Assuring that humanitarian aid earmarked for vulnerable populations reaches eligible ASM practitioners, taking into account their often-remote locations and their ethnicity
• Assuring that subsistence miners not eligible for humanitarian aid for reasons of age or family status receive assistance from other more appropriate programs
• Assure the continuation of ASM activity as long as possible by
  • Providing security to communities threatened by armed groups
  • Distributing guidelines for hygiene and protection during the sourcing, trade and transport of minerals
  • Authorizing air transport of minerals
  • Ensuring continued functioning of government departments involved with processing trade and transport of minerals (esp. Nat. Mining Agency and National Customs Office)
  • Having Colombian Central Bank develop gold buying scheme to temporarily take the place of closed international markets
  • Allowing small scale mining coops equal access to support programs provided to companies and agricultural sector
  • Extending all mining licenses and concessions until normalcy returns

Photo from IMPACT

IMPACT

COVID-19 & ASM: Illicit Traders Cashing in on Vulnerable Miners in Conflict-Prone Areas

April 10, 2020, by Alan Martin, Sechaba Consulting and Joanne Lebert

• Notes disruption of ASGM supply chain and its effects on ASGM miners in DRC – prices falling 30-50%, 90% of gold buying houses in Ituri province closed
• Indications that with traditional supply chains broken, even more illegitimate actors possibly stepping in to DRC
  • Cargo flights from Nairobi to Gulf states mooted as a possible route for gold exports from Africa
• Predicts that border closings, lack of liquidity will have three security related impacts in DRC
  • Economy will become even more informal
  • New buyers will arrive in gold producing areas to disturb old patterns
  • Armed groups and political elites will begin competing for control of gold fields and access to new buyers
• Possibility exists that armed groups will move to take control of artisanal mines, including those previously certified as conflict free in DRC
• Argues that any short-term relaxation in standards of responsible sourcing likely to work to miners’ disadvantage in long term
• Response to pandemic needs to consider both short term urgency and longer-term conditions

Levin Sources

Graphic from Levin Sources

ASM, responsible sourcing and COVID-19 – An initial analysis

April 2, 2020, by Adam Rolfe and Levin Sources experts

• An early look at impacts of COVID-19 and its impacts on ASM and mineral supply chains
• Finance critical in keeping mineral supply chains open
• Ruptured supply chains could well be reconfigured
  • consciously by well-intentioned actors catalysing reforms i.e. increased formalisation
  • or by illicit and criminal groups.
• Disjunct between ASM mineral prices and world markets
  • Gold price up even as ASM price falls
  • Cobalt down 10% spot, and far more in ASM
• Opportunity as some refiners go off-line for responsible ASGM producers to find other markets.
  • Given due diligence overhead, planning/discussion of this possibility should begin ASAP
• Data critical to guiding interventions. Calls for mobilising local networks and sharing data widely.
• Threat to ASM formalization
  • domestically from gov’t attention/spending going to other areas (i.e. public health)
  • internationally from funders re-considering priorities
• Vulnerable groups likely to be hit hardest
  • ASM communities live hand to mouth and thus are especially vulnerable
• LSM-ASM conflicts could increase as mines reduce/suspend operations cut back on ESG (Env. soc. Gov.) during downturn

Six reasons why COVID-19 response planning should prioritise ASM communities

April 21, 2020, by Adam Rolfe and Estelle Levin-Nally, with contributions from Holger Grundel

• Argues ASM communities deserve priority response to COVID-19 crisis because

1. ASM health characteristics – in particular pre-existing respiratory disease, malnutrition and lack of access to health care – make ASM communities especially vulnerable
2. ASM sector a likely vector for Coronavirus spread, as miners likely to continue to mine and traders to trade, all of which implies contract, travel and movement.
3. Significant portion of ASM lies in conflict and high-risk areas, which are likely to become even more unstable as governments channel scant resources to deal with pandemic and armed groups move to take advantage of power vacuum
4. Poverty increasing in ASM communities, a result of food prices rising just as incomes drop from falling mineral prices.
5. Traditional financing of ASM -especially pre-financing networks – likely to un-ravel as liquidity freezes up and buyers go for short-term quick wins. Result will be much less finance available for ASM
6. Covid pandemic will push ASM producers into closer contact with wildlife, increasing chances of another crossover event leading to another pandemic

planet GOLD

ASGM in the time of COVID-19: How to reactivate artisanal and small-scale gold mining in Peru?

Photo from planetGOLD Peru

April 7, 2020, by Franco Arista, planetGOLD Peru

• Notes high rate of informality in Peru’s workforce (72% or 12.5 million workers)
• Notes the high rate of ASGM workers in Peru’s Economically Active Population (as high as 74% in Madre de Dios)
• ASGM largely frozen by border closings, local restrictions of movement, difficulty of moving money (lack of liquidity)
• Responses: Ministry of Finance support to SME’s including formalized ASGM operations
  • Includes salary support for workers
• Highlights Chilean govt response
  • includes stabilisation fund for copper prices via national mining company (ENAMI)
  • Govt gold purchasing (50% of value on sale, 25% 12 days later)
  • Mining registry renewals delayed until April 30
• Recommendations for Peru
  • Form COVID-19 advisory group from public/private sector to advise on reactivating industry
  • Mining Assets (public Peruvian company) should sign express agreements with new ASGM trading companies to ensure gold bought at fair price
  • Central Bank should purchase gold from licensed traders (temporary measure)
    • Govt of Ecuador as model
  • Supervise gold trading points to ensure miners/traders get fair price
  • Extend line of credit for MSME’s already approved by govt to include formalized miners and those in process of formalization
  • Ensure that govt bonuses (support measures) be made available to pallaqueras and cachorreros (categories of informal mine workers comprising some 12,000 people) in the Puno region.
  • Develop awareness campaigns on sanitary measures for mining work during COVID-19
  • Promote remote education

The Sentry

Graphic from The Sentry

Targeted Network Sanctions in Africa and the COVID-19 Pandemic

April 22, 2020, By Hilary Mossberg

• Argues that calls for easing sanctions in the face of COVD-19 pandemic are misguided, at least when it comes to targeted network sanctions of the kind applied to South Sudan and the Democratic Republic of the Congo
• Targeted network sanctions freeze the assets of individuals and their networks of proxies engaged in kleptocratic behaviour.
• Targeted sanctions likely to assist in COVID-19 assistance, as will prevent or deter theft of medical aid