1.1 A Dual Gold Mining Economy?
The history of mining is often presented as a linear evolution from pre-modern and traditional forms of mining, towards capital-intensive industrial mining undertaken by large (multinational) mining companies (see, e.g., Lynch 2004). At first glance, trends in the gold mining industry seem to corroborate this view. A process of consolidation that started in the early 2000s concentrated power in the hands of a small number of “major miners” (Humphreys 2015). By 2017, only five companies (Barrick Gold, Newmont Mining, AngloGold Ashanti, Kinross Gold, and Goldcorp) were responsible for nearly one-fifth of newly mined gold (Thomson Reuters 2018). Since the gold mining boom of the 1980s, the gold mining industry has also expanded from its historical core (constituted by South Africa, the USA, Australia, Canada, and Russia) into “new gold mining destinations” such as China, Peru, Ghana, and Indonesia. As illustrated by the following description of the first fully automated underground gold mine in Mali, the industry is also witnessing profound technological change and is on the verge of entering the digital age:
The Syama mine, located 300km southeast of Mali’s capital Bamako, has total reserves of 2.9 million ounces of gold. Work on the deep drilling program at the mine began in late 2015, ensuring the new, low levels of the mine are designed with automation in mind. (…) Throughout the mine there will be a fibre-optic network, ensuring that the autonomous haulage trucks and other elements are in constant contact with the control centres above ground. (…) The advantages of automating a mine are clear, as the technology increases efficiency and improves safety. (Mining Technology 2018)
Yet in many new gold mining destinations, the expansion of industrial gold mining is accompanied by an equally dramatic increase of what is widely referred to as artisanal and small-scale gold mining (ASGM). Across the globe, up to thirty million people may now be involved in small-scale, low-tech, labor-intensive gold mining, producing up to one-fifth of the global gold supply (IGF 2017). This expansion of ASGM is having a deeply transformative impact on mineral-rich regions across the globe, providing opportunities to people from different walks of life:
The gold rush is only four months old in Nathenje, Malawi, but already there are thousands of prospectors digging, shoveling and sifting soil in the age-old search for a nugget that will transform their lives. Using rudimentary picks and shovels, villagers from the nearby settlements of Lumwira and Dzondi have been joined by other Malawians from across the country, more experienced in gold panning. An informal system of bosses and employees has also sprung up, alongside a makeshift collection of plastic shelters offering basic accommodation. (AFP 2018)
Despite its central importance for local livelihoods as well as the global supply of gold, and despite its far-reaching social and environmental impacts (not least in terms of mercury pollution), the lion’s share of ASGM-activities persists without any form of government recognition, let alone regulation. In a bid to re-assert control over mineral wealth, some governments are now taking drastic measures to quell the expansion of what is often referred to as “illegal” mining:
In an operation that lasted a couple of days and that involved four airplanes, police officials, forest rangers and the National Guard, Brazilian authorities dismantled a number of open-pit gold and cassiterite mines operating illegally in the heart of the Amazon. (…) A $200,000-shotgun, eight hydraulic excavators, four motor pumps and other equipment were seized and destroyed. (…) According to official information, illegal mining in the remote area generates profits of at least $120,000 per month. (Leotaud 2018)
The opportunities and challenges associated with the global expansion of (gold) mining have been widely debated in development studies (e.g., Bebbington et al. 2008; Kemp 2009; Gamu et al. 2015). This literature is underpinned by dualist views of the gold mining economy, which is seen as bifurcated between two distinct sectors. On one side, we find a gold mining industry that is seen as a vehicle for neoliberal globalization and that has entered into an unholy alliance with “landlord” states in an attempt to monopolize access to mineral-bearing land (Emel et al. 2011). On the other side, we find a rudimentary ASGM-sector that operates “in the margins” (Fisher 2007) of the global economy and that functions as an “informal safety net” (Aizawa 2016) for the rural poor (Hilson and Garforth 2012). This image of a dual gold mining economy is reinforced by empirical accounts of conflicts between mining companies and ASGM-operators, who often have no choice but to operate “illegally” inside company concessions (see, e.g., Carstens and Hilson 2009; Okoh 2014; Patel et al. 2016) (Table 1.1).
Table 1.1
A dual gold mining economy?
Artisanal and small-scale gold mining | Industrial gold mining | |
|---|---|---|
Main actors | Poor (rural) communities | Mining companies |
Driving force | Poverty/subsistence | Profit/accumulation |
Type of operations | Rudimentary gold panning and tunneling activities | Large open-pit and underground mining operations |
Technology use | Minimal use of technology | Extensive use of modern technology |
Factor intensity | Labor-intensive | Capital-intensive |
Regulatory situation | Informal—criminalized by state | Formal—protected by state |
1.2 Diversity and Connectivity
While intuitively appealing, this image of a dual gold mining economy fails to do justice to empirical realities on the ground. As demonstrated by the “snapshots” from Malawi and Brazil, rather than constituting homogeneous and mutually exclusive categories, ASGM and industrial gold mining now harbor a wide range of gold mining practices with varying degrees of capital and labor intensity and various levels of (technology). While many ASGM-activities remain entirely informal, a growing number of ASGM-activities now operate with at least some degree of government recognition—even if only a tacit recognition from local government officials (Verbrugge 2015). Within the gold mining industry, in addition to major mining companies that operate massive, capital-intensive mining projects, we find a considerable number of “mid-tier” and “junior” firms that focus on smaller exploration and mining activities (Dougherty 2013). Moreover, the practice of subcontracting tasks in the supply chain makes major mining companies increasingly reliant upon specialized service providers and labor hire companies, which in some occasions operate at the brink of informality.
Dualist views of gold mining also fail to make sense of the complex interactions and linkages that may exist between ASGM and industrial mining. While there may indeed be conflict and antagonism, in many other cases there may be a degree of mutual tolerance, which is sometimes facilitated by personal relationships between people involved in ASGM and/or industrial gold mining. More fundamentally, knowledge and (technology) transfers between industrial gold mining and ASGM may contribute to their mutual strengthening. In a growing number of cases, we are even witnessing the emergence of full-blown production and marketing agreements:
Gran Colombia’s chief executive officer, Lombardo Paredes, said the company would now incorporate additional small mining collectives into its contract mining model. (…) Currently, over 2,500 informal miners operate within the company’s title. Over the next few months, the company will negotiate specific operating contracts with each of the mining collectives that have interests in Gran Colombia’s property. (Jamasmie 2017)
And even where there exist no such direct linkages between ASGM and industrial mining, a substantial share of the gold produced by informal ASGM still finds its way into official gold trading circuits. Connecting ASGM to global gold markets are a wide range of intermediaries, who often operate in the twilight zone between the formal and the informal economy:
Traditionally –even in a formalized supply chain – small local traders buy from artisanal miners and sell on to big national exporte...