Formalization of artisanal and small scale mining

With the example of Colombia and Peru

Artisanal and small scale mining (ASM) is known for the performance of activities with little to no technology use or machinery by individuals, groups or communities, oftentimes informally and located in developing countries. Due to the ambiguity of the artisanal and small scale mining concept, it is difficult to properly estimate its magnitude and the amount of people who work in this sector, either permanently or seasonally. However, according to numbers from DELVE website, the global number of people working in ASM sector worldwide is around 42,654,992, from which 30% consists of women and 70% of men.


miners work in
formalized mines

small scale mining is the
source of income for over

42 million


In 2018

669.400 kg

of gold were produced

Formalized mining

What is the international context of formalized artisanal and small scale mining?

In the Andean area, ASM has found greater challenges concerning compliance of technical and environmental parameters. Nowadays, considering that most ASM organizations supported by ARM under CRAFT and Fairmined standards are formalized, access to mineral commercialization and export is difficult.

Legal status of artisanal and small scale operations varies from country to country. Several artisanal mines have run or still operate without regulation, compliance of health and safety, environmental or technical standards that ensure proper labor practices. This occurs due to the lack of knowledge from the government about ASM situation.

What is known as «artisanal and small scale mining» in Colombian formalization process?

To operate, ASM requires to be formal. In Colombia, formality implies compliance with legal, technical, environmental, economic, social, and labor aspects in order to be recognized as a legal, legitimate, profitable, safe, and environmentally sustainable* activity. The goal for ASM is to make a contribution to the development of communities and their regions.

*determined by mining policies

What is known as «artisanal and small scale mining» in formalization process in Peru?

Formalized mining has to be registered in the Integral Register of Mining Formalization (Registro Integral de Formalización Minera– REINFO), consisting of both natural and legal individuals.

According to the Ministry of Energy and Mines, 88.734 miners are already in this condition. However, there is a significant number of organizations in formalization process that do not have access to such regulation due to external causes.

ARM’s  Formalization approach 

What does CRAFT Code bring to formalization?

CRAFT Code and Fairmined standard are tools for the government and the industry to encourage ASM formalization and recognize the effort and commitment of legitimate men and women miners interested in progressively adopting practices that will help them improve their activity management.

CRAFT Code represents the agreement upon application of due diligence in the sector, and a first step towards formalization as a key element to have access to formal chain supplies.

Fairmined standard grants a premium to ASMs that are formal and comply with the demanding social, environmental, organizational and labor criteria required. It also sets a proposal of continuous improvement to make progress as formal and responsible ASM leaders that make a positive impact on territories.

What have we done for adjusting mining formalization processes?

    • Understand challenges and particular gaps for ASM.
    • Generate discussion spaces including all actors for the construction of a joint vision to strengthen ASM.
    • Incidence in public policies that regulate ASM sector.
    • Enforce abilities of men and women miners to make decisions concerning mining public policies


    What have we done concerning mining development?

    • Support in understanding and sharing mechanisms for mining formalization access for artisanal and small scale miners.
    • Strengthen abilities of officials in local and regional entities concerning ASM understanding.
    • Support on CRAFT Code and Fairmined Standard for 137 ASMOs (among small companies, cooperatives and mining associations).

Formalization in  Colombia

What are the greatest challenges in Colombia for the formal practice of small scale mining?

    Informality in mining sector happens because of limitations that usually are beyond the control of miners, these are some of them:

    1. Lack of proper regulation that is aware of territory reality:
      . No possibility of funding from miners to make the initial investment needed to have access to technical and environmental
      . High vulnerability to risks implicit in Annex 2 of Due Diligence Guide
      (National Mining Agency – Agencia Nacional de Minería, 2016) 
      . Low level of innovation and productivity.

    2. Lack of coordination and articulation from institutions in charge of auditing and tracing mining formalization.
    3. Difficulties in adoption of new technologies to improve mineral exploitation processes, supported on these two aspects:
      . Even when a small scale mining organization complies with all legal obligations, it is usual that it does not have enough
      economic resources to fund the technical, operational, logistic and financial changes necessary to be profitable in the
      and have enough extra for savings. Absence of economic reserves limits investment on improvements and upgrades, and
      that inaction results in fewer feasible resources to improve their practices.
      . Without any help from industrial mining, the State or any other similar institutions, subsistence and small scale miners cannot
      complain with the expensive and complex requirements needed for their formalization
      . They require technical, logistic,
      financial support and enablement of formal chain supplies adapted to every situation and territory.


      1. Absence of legalized access to mining resource due to the absence of free mining formalization areas, lack of incentives to stimulate mining formalization (help on making Territorial Organization Plans, technical, labor and environmental training, etc.), as well as legal access to explosives.
      2. Stigmatization of subsistence and small scale mining, which implies that the financial sector stops its support, leading to legitimacy loss in territories at the same time.[1] In Colombia, illegal extraction of minerals is understood as the practice of exploration or exploitation activities without a certification, or the coverage of one, and without the corresponding environmental instrument.

      What does ARM think about formalization in Colombia?

      Along the years, a series of public policies for promoting small scale mining have been arranged through different legalization and formalization processes.

      The most current is within the National Development Plan (Plan Nacional de Desarrollo 2018-2022). This initiative includes a better understanding of the challenges and dynamics faced by the mining sector, guaranteeing the inclusion of differential elements for ASM.

      Before this:

      • ARM recognizes government efforts and insists on the fact that formalization and mining promotion is a public matter that requires articulation among civil society, state institutions, private sector, large scale mining and ASM.
      • ARM considers that, in order to assess small scale mining properly, it is necessary to identify the main risks of the sector, intending to mitigate legal requirements demanded by the national government.
      • ARM emphasizes that it is essential to stop criminalization of subsistence and small scale miners.
      • ARM suggests that risk management for small scale mining should have a progressive and accessible approach, allowing miners to develop better work practices.
      • ARM is committed to promoting normative and procedural changes in order to acknowledge and distinguish mining dedicated to formalization performing its activity legitimately, from that one deemed as illegal.

        Formalization stories

         Audio files of interviews with miners from three different areas in Colombia, talking about formalization. 


        Formalization in  Peru

        What are the greatest challenges in Peru for the formal practice of small scale mining?

          1. Men and women miners in formalization process work in third party concessions and it is not likely that the concession holder performs exploitation contracts.
          2. Men and women miners in formalization need to have surface terrain authorization, which often implies internal conflicts when formal agreements are required with farming and/or indigenous communities, or individual property assets.
          3. There is not a clear regulatory frame that disposes the use of existing water for subterranean mining operations.
          4. Weak territorial presence of institutions affiliated to mining sector. This implies a delay in administrative processes in different entities (National Superintendence of Customs and Tax Administration, National Superintendence of Regulation of Security Services, Arms, Ammunition and Civil Use Explosives).
          5. Absence of progressive support that allows men and women miners to make progress in the formalization process. Mining and environmental auditing does not consider a previous inspection, thus becoming only sanctioning.
          6. Lack of a coherent State policy that is clear and feasible for small scale mining.
          7. The National Strategy for Action on Illegal Mining has not given any result, not even as a dissuasive measurement.

          What does ARM think about formalization in Peru?

           In the last years, ARM, along with national and regional organizations of miners, made a calling for annual workshops to discuss the issue of mining formalization.

          In 2020, ARM developed a National Action Plan, with the inclusion and participation among miners, women involved in this practice, and the Peruvian government. 

          Before this:

          • ARM recognizes government efforts and insists on the fact that formalization and mining promotion is a public matter that requires articulation of a process with several actors: civil society, government institutions, private sector, large scale mining, and ASM.
          • ARM considers that artisanal and small scale mining should be appreciated for the important social role that it has in extended low-income population sectors.
          • ARM emphasizes that it is essential to stop criminalization of subsistence and small scale miners.
          • ARM suggests that the Peruvian government should consider and value good practices and lessons learned from Fairmined certification in Peru, looking forward to a more inclusive formalization.
          • ARM suggests that the Peruvian government should consider CRAFT Code as a methodology and protocol to facilitate formalization processes and bring miners closer into a formal value chain, according to the Due Diligence criteria of OECD.


              Examples and case studies

              Coexistence of small and large scale mining

              Public position: Basic principles for an adequate coexistence between large and small scale mining

              The experience of Suárez and El Tambo municipalities

              2019. Alliance for Responsible Mining. Case study in the Department of Cauca, Colombia.

              Second version of CRAFT Code is published

              2020. Alliance for Responsible Mining and RESOLVE. Revision of the first CRAFT version published in 2018.

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