What global rules against 'blood gold'? Small miners have to eat
When his fellow miners winch him up from the hole in the desert, Keith Gushure is covered in mud.
Gushure, 21, holds a pick and a hammer. For the past 18 hours he’s been trying to chip, gouge and pry gold out of the 56-foot (17-meter) mine he helped dig, one of a series of deep pockmarks that dot the dry, flat landscape in Umguza, Zimbabwe, 230 miles (372 kilometers) southwest of the capital Harare.
Despite the parching heat, Gushure is smiling. He’s yanked enough precious metal out of the dark shaft to once again justify spending the past four months away from his wife and baby.
“I have to feed my family,” he said.
Gushure and others like him—the industry euphemism for their back-breaking labor is “artisanal” mining as if they were fine English silversmiths—will have a tougher time selling their gold legitimately under new guidelines from the London Bullion Market Association. That’s because some of their haul could be classified as “blood gold”—produced outside any safety or environmental rules and possibly contributing to such crimes as child labor, slavery and funding illegal arms. International investors have demanded producers conform to responsible mining standards.
On Jan. 1, the London Bullion Market Association is introducinga new version of the guidelines that embrace what’s called environmental, social and governance standards.
“Although miners here want to comply, many won’t be able to,” said Dosman Mangisi, a spokesman for the Zimbabwe Miners Federation. “It’s a noble idea, but it may be too costly for us.”
The LBMA’s Responsible Gold Guidance program, launched in 2012, is mandatory for LBMA-accredited refiners, who are audited annually and are required to report publicly. The program declared its first victory recently in the Democratic Republic of Congo, where insurgents are notorious for selling minerals to support armed rebellion. A “good-delivery” refinery was able to trace its artisanal gold to compliant sources.
On Jan. 1, the association will introduce a new version of the guidelines that embrace what’s called environmental, social and governance standards. Investor appetite for ESG has mushroomed in recent years, with asset managers such as BlackRock Inc. offering an increasing number of funds.
The guidelines are the same for refiners of big producers and small-timers, leaving many artisanal miners, who supply 20 percent of the world’s bullion, out of the equation.
“What’s lacking fundamentally for the miners is skills in drilling, blasting, crushing and environmental-management issues and safety,” Mangisi said. “Fortunately, here there are no recorded incidents of deaths. But this must be addressed.”
“The new guidance is designed to encourage refiners to work more closely with miners to ensure that they are mining responsibly,” LBMA Chief Executive Officer Ruth Crowell said in an email. The association’s core aim is “to seek/encourage year-by-year improvement in those standards rather than applying requirements that only the largest miners can meet.”
Gushure said he wears no protective clothing, not even appropriate boots. The shaft in which he toils has no ventilation or basic lighting aside from the lamp on his forehead. When miners are done with their holes, they just dig the next one, leaving the old mines open, a hazard for careless people or livestock, he said.
“I have to survive,” Gushure said. “I’m a new parent, so I have to put food on the table.”
Small-scale miners account for more than half of Zimbabwe’s gold production and are such a vital part of the economy that the government has turned a blind eye to violations, according to Jee-A van der Linde, an economist at NKC African Economics in Cape Town.
Small-scale miners account for more than half of Zimbabwe’s gold production and are a vital part of the economy.
Under Zimbabwean law, producers are required to sell their gold to Fidelity Printers and Refiners, a unit of the central bank. But “given the scarcity of jobs and Zimbabweans’ inability to follow formal channels, these artisanal miners would probably end up selling their gold on the black market,” van der Linde said. Fidelity didn’t respond to requests for comment.
The industry euphemism for their back-breaking labor is “artisanal” mining, as if they were English silversmiths
For miners there can financial benefits from the program. Thousands of miles away in the isolated southern village of La Llanada, Colombia, members of the Coodmilla mining cooperative are paid the equivalent of $8 for a gram of guideline-compliant gold and $6 for a non-compliant gram, according to Daniel Riascos, the cooperative director.
With the premium, “we’ve been able to fund health, nutrition, work training programs,” Riascos said. “That’s why more of our miners want to become certified.”
Miners now have machines with cables to move buckets of ore from the mine, Riascos said. Before they worked to become compliant, the miners carried the buckets. And the operation now uses water, lessening the dust that plagued the miners and even killed some of them.
The industry was spurred to action, in part, by the failure of Dallas-based Elemetal LLC, previously one of the largest U.S. refineries. In May, the company was sentenced on charges linked to illegally mined gold from Peru. Investors are also on the lookout for illegal sales in Africa and Latin America used to finance the spread of weapons to militant groups.
Investors frown on the use of mercury, a health and environmental hazard, to refine the gold. In southwest Zimbabwe, an arid region punctuated by spindly mopani trees and umbrella-like acacias, Gushure brings his daily take to a refiner that uses no mercury. Some miners walk miles to get there.
The ore is placed in a crusher, which reduces the size to small particles, which are loaded into what’s called a gravity concentrator. Since gold has a higher density than the surrounding rock, the concentrator separates the gold, which will be weighed on a scale smaller than a hand. The miners are paid immediately.
Small-time miners, like the ones in Zimbabwe who worry first about survival, may yet succeed in making their work safer and more friendly to nature, van der Linde said.
Government support, improved mining methods and an increased environmental awareness “will increase the miners’ willingness and ability to conform” to standards, he said.