In this blog, I reflect on the conditions necessary for mineral processing plants to responsibly source raw ore from artisanal and small-scale mining (ASM) operations. Typically, in this business model, plant owners also hold mining or concession titles but outsource the mining/extraction stage and, thereby legally detaching themselves from the miners. These miners bear the greatest occupational safety and health risks in performing underground work and effectively work as subcontractors without benefits or oversight. Since plants lack control over the mining/extraction stage, they face challenges in influencing occupational safety and health conditions for miners. They also may not be able to prevent the infiltration of illegal ore from unreported mining sites into their supply chain. To fulfill the environmental and economic value proposition derived from mineral sales, plants need a specialized management system to exert supply chain influence, complemented by independent monitoring and assurance mechanisms tied to training and incentives.

Processing plants are key actors in ASM supply chains and, as aggregators and exporters, often play the role of linking where the mineral is produced with where the mineral is refined and used. They not only act as the first mineral aggregators in the chain but are increasingly taking on the role of mining concession holders. The more sophisticated plants possess industrial facilities to process ore through cyanide leaching and/or flotation. In Ecuador, at least 171 processing plants collect mineral extracted by artisanal miner associations and small-scale organizations from the mining districts of Zaruma-Portovelo, Chinapintza, Nambija, Camilo Ponce Enriquez, and the Cordillera del Condor. In Peru, estimating the number of plants is more challenging, as they are often officially registered as mining companies. However, field reports suggest at least 88 industrial-scale plants exist. 

Plants offer artisanal miners a business model that is both environmentally and financially attractive, providing mercury-free processing that, in turn, could increase miner income via improved mineral recovery. Some studies assert that artisanal miners could recover up to 90% of the gold contained in their raw ore, compared to only 30% achieved through amalgamation. However, this surplus would be shared between the plant and miner. Instead of processing the ore themselves, miners could sell to plants at a higher profit, allowing “miners to mine and processors to process”. This narrative has caught the attention of academics and certification initiatives interested in scaling the supply of responsibly-sourced ASM gold. 

The idea of labeling gold from processing plants as responsible mined remains controversial. While some plants have exclusive buying relationships from miners and hold mining titles, they often contractually detach themselves from the risks of underground operations, instead opting for approaches that make miners provide compliance documentation when delivering ore to the plant. This approach lets plants evade responsibility for these workers even though many effectively work as employees for companies which may have the same owners as the owners of plants. Although this practice is legal in many Global South countries, it contravenes ILO Convention 176, which mandates equal treatment for employees of contractors or subcontractors compared to direct employees. In this context, real miners—essentially subcontractors of the plants—become entirely invisible, along with their working conditions, medical insurance, and labor rights. 

Despite these challenges, international cooperation’s interest in promoting the plant business model has grown. It promises a potential pathway to meet Minamata Convention commitments, which could be driven by economic incentives from a more efficient recovery process. From the perspective of public policy design for ASM, economic incentives have proven effective in influencing artisanal miners’ decisions. The Fairmined certification is a living example that some miners are willing to comply with improvement plans and audits if it leads them to fair markets with better prices and premiums for community investment. 

However, getting artisanal miners to sell their mineral to plants won’t depend solely on economic incentives. Social conflicts between mineral suppliers and plants have eroded mutual trust, limiting the ability of economic incentives to foster harmonious trade relationships. Over the past three years of field missions in Peru, Colombia, and Ecuador, I have witnessed various situations, from fraud and lack of transparency in metallurgical content assessment and payment to verbal agreements that keep artisanal miners informal, thus limiting free-market participation. I have also heard accounts of violent confrontations over access to mining deposits and roadblocks that hinder water access and the free transportation of mineral. 

This does not mean the odds are stacked against achieving harmonious and fair relations between artisanal miners and processing plants. Rather, future interventions should adopt a more holistic approach, considering the social context and human rights situation in the plants’ areas of influence, if the expected results in changing miners’ behavior on mineral processing choices are to be achieved. Below, I propose four conditions that should be met for responsible sourcing initiatives to declare ASM minerals processed by beneficiation plants as responsibly sourced. Depending on each context, some of these conditions might take precedence, while others may be less relevant. 

1. Association and Formalization of Artisanal Miners Operating within the Plant-Concessioned Mining Areas

The association and formalization of artisanal miners operating within plant-concessioned mining areas are essential for the success of this model. Association is key for miners to accumulate the minimum mineral volumes required for efficient plant processing and to distribute the costs of legalization and compliance with voluntary standards. 

Formalization, on the other hand, grants miners the freedom to invoice and decide where to process their mineral, while obligating the concession/mining title holder to assume responsibility for implementing and overseeing environmental and occupational health and safety standards on the workplace. By formalizing, authorized mining areas and miners would be recognized, and they could become strategic allies in preventing the invasion of outsiders attracted by mining rushes. 

2. Signing Standardized Commercial Agreements for Mineral Valuation Terms and Dispute Resolution Mechanisms 

The signing of commercial agreements is essential to standardize mineral valuation terms and establish effective dispute resolution mechanisms. These agreements should include due diligence requirements for mineral sales to reduce the risk of illegal mining infiltration. Furthermore, it is crucial to set standardized rules for mineral valuation and payment to ensure that miners with less education and experience are not defrauded. 

Agreements should also contain protocols defining sampling and analysis techniques, as well as metallurgical laboratories recognized by both parties, including certified labs to turn to in case of disputes. Additionally, specifying mineral collection and transportation sites and authorized transporters is important. By implementing these commercial agreements, the economic value derived from increased processing efficiency can be partially transferred to artisanal miners, promoting a fairer and more equitable relationship between the parties involved.  

In short, I suggest that for this model to be fair, plants will need to have transparent payment tables that detail how they will use metallurgical tests (and/or actual recovery) to pay miners. In our experience, this is not the standard practice in the sector as plants use uncertainty about payment terms to negotiate more favorable deals with more vulnerable groups. 

3. Training in Appropriate Sampling and Metallurgical Testing Techniques for Each Mineral Type 

To become educated consumers of metallurgical testing results, it is essential that miners receive training so that they can understand these results. This training could highlight which sampling and metallurgical testing techniques for each mineral type would be appropriate. Although miners have developed their methods for estimating the economic value of their mineral, such as panning to observe the “pinta” of the ore”, it is necessary to harmonize these practices with the more advanced industrial techniques used by plants, which involve both panning and metallurgical assays. Furthermore, a lack of knowledge regarding suitable methods for mineral valuation, depending on its type (e.g., oxides or sulfides, coarse or fine, free or encapsulated), creates uncertainty and erodes trust in laboratories.  

For this reason, training should not be limited to theoretical explanations but should take a practical approach based on hands-on training and trial and error. This will allow miners to directly experience and learn how sampling techniques and metallurgical tests work, strengthening their skills and increasing their confidence in the mineral valuation process. I highlight that this type of training will likely be expensive to provide to miners and will likely require State / third-party support as well as the participation of expert trainers to adequately reach miner groups. However, increasing miner literacy about the mineral content of their ores (and interpretation of metallurgical test results) is likely essential for creating large-scale, just models of ore-selling: plants and miners must use a common language and negotiate over terms that both parties understand; without miner education in this area, it is hard to imagine this being possible. 

4. Implementing Incentive-Based Monitoring and Assurance Systems to Encourage Progressive Improvement Plans 

The implementation of incentive-based monitoring and assurance systems is crucial to encourage progressive improvement plans in the artisanal mining sector. Acquiring minerals from multiple suppliers increases the risk of illegal mineral infiltration for plants. Therefore, production sites must be continuously monitored, complemented by random inspections to ensure transparency and legality in the supply chain.

Given that artisanal miners often lag behind in meeting standards and regulations, plants must conduct regular assessments and establish clear commitments to implement improvement plans. Rather than a punitive approach for non-compliance, rewarding progress would likely be perceived as fairer by the most vulnerable supply chain actors. 

Moreover, transitioning from high entry criteria to understandable and achievable criteria accompanied by continuously monitored improvement plans is essential. These plans should include clear warnings indicating potential commercial disengagement in case of non-compliance, incentivizing miners to improve their practices and align with required standards.
 

5. Behavior Change will Require Multistakeholder Support and Additional Incentives 

These changes could raise the standards for labor and transparency in the sector, potentially benefiting miners and making products from plants more attractive to high-value markets. However, these changes may be expensive and challenging to implement. 

We call on local governments and the international community to 1) support the sector in making these changes by rewarding positive changes by miners and plants, 2) connect plants and mining groups with NGOs and agencies who can help them make changes, 3) enforce regulation that would crack down on plants which benefit from power imbalances, and which have no interest in making changes, and 4) to document the efforts they make so the global community can learn from both successes and failures. Academia can play a role in helping to document which interventions achieve the desired results and under which conditions. Finally, for these changes to create a virtuous cycle of improvement, we must work together to create larger-scale certifications that would substantially reward actors who created equitable systems with higher mineral prices. 

In conclusion…

While processing plants could play a strategic role in achieving global mercury reduction commitments, we have yet to see a policy design that addresses the issue comprehensively, bringing together all the puzzle pieces mentioned here. The simplistic explanation that miners don’t sell their ores to plants due to ignorance of better recovery methods and lack of trust has become repetitive. Based on my experience in the field, I believe this explanation is largely incorrect; although this may be true for some segments of ASM, the reasons are much more complex when considering the bigger picture. They are related to free-market restrictions, weak associations, contract clarity issues, and a notable lack of arbitration mechanisms for objective mineral valuation and pricing. There is still much work ahead, but I hope that iterating upon the recommendations I provided above may help us take a step in the right direction toward a more responsible and equitable ASM that considers those who enter the mines and put their lives at risk.

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