Up to 40 Tons of Gold ‘mined illegally in Africa yearly’

February 5, 2013 at 10:39

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About 100 tons of gold — equivalent to half South Africa’s annual output — was mined throughout Africa each year by artisanal miners, of which between 20 and 40 tons was extracted through illegal means and possibly fuelled conflict on the continent, Rand Refinery CEO Howard Craig said on Monday.

Speaking at the Mining Indaba in Cape Town, Mr Craig said it was almost impossible for refineries to determine if the gold sent to them from small-scale miners was being used to fuel conflict or crime.

AngloGold Ashanti’s executive vice-president for Africa, Robert Duffy, said his company estimated that between 25kg and 35kg of gold was mined a month by artisanal miners in Tanzania alone.

“It is extremely difficult to determine the scale and the output of these artisanal miners as they are all unregulated,” he said.

Mr Craig and Mr Duffy were part of a panel discussion at the indaba about the World Gold Council’s establishment of a conflict-free gold standard. The aim of the standard is to devise a common approach by producers to show that their gold had been extracted in a manner that did not cause, support or benefit unlawful armed conflict.

It further aims to ensure that gold does not contribute to serious human rights abuses or breaches of international humanitarian law.

It emerged in the discussion that the established producers were grappling with what constituted illegal versus legal and legitimate activities by many small gold miners.

Gold Fields CEO Nick Holland said artisanal mining was a problem that had to be regulated. Even if artisanal miners were removed from an operation they had established, “they would simply pop up somewhere else or return. Artisanal mining is not going to go away as many millions of people rely on this as a means of income,” he said.

Where artisanal mining was not illegal it presented an opportunity for governments to try to harness it and turn it into a sustainable industry, Mr Holland said. He suggested governments mark out land for artisanal mining. “Let’s make them (artisanal miners) accountable. Let’s subject them to health and safety standards…. They have got to pay their tax if they provide income for people who desperately need it, and (we can) get a better handle on where the gold is going”, he said.

Paul Mabolia, co-ordinator of the Promines good governance project in the Democratic Republic of Congo, said artisanal miners usually participated in the industry to survive.

“If there was a viable alternative for them in another activity they would do it,” he said.

A priority in Congo was to cut the link between artisanal miners and illegal activities to ensure they were not funding any wars, Mr Mabolia said. It was important that established miners operated responsibly and within the national, provincial and local laws.

Further, it was important for companies to observe international treaties such as those setting certification standards of gold produced, as set out in the Organisation for Economic Co-operation and Development rules.

Mr Craig said refiners were developing different production streams so that the gold that came from legitimate miners could be traced to the source of origin and be certified as conflict-free.