Modern Mining December 2023

multiple technical specialists, a menagerie of docu ments, a social and labour plan, water use licence, waste management licence, environmental authori sation and mining works programme, to name just a few of the obligatory regulatory requirements that come at considerable cost. The regulatory burden and associated costs continue to accumulate once a mining right has been secured and mining activities commence. The variety of mine health and safety requirements, various reporting obligations, regular audits and financial provisioning requirements that could run far into the millions, mean that smaller mining companies are never free of the financial burdens of the mining regulatory system. To the mining giants of the world, listed compa nies and mid-tier miners, these administratively and financially weighty procedures are at most, a minor inconvenience when the prize is the potentially handsome profits the mining industry has historically produced. In fact, for the most part, the strict regu lation of larger players to some extent is beneficial for a sustainable environment and climate, and the protection of local host communities. However, for ASMs who, likely, do not have the funding necessary to traverse these strict proce dures and commence with profit producing mining operations, the regulatory and financial burden is too heavy to bear. The uniform application of the current regulatory framework creates barriers to entry for ASMs and allows large scale operators to maintain a stranglehold on the industry. Let’s look at illegal mining in South Africa The regulatory barriers to entry are discouraging for ASMs and disincentivise their engagement with the formal sector, only adding fuel to the fire that is the informal or rather, illegal mining sector in South Africa. Illegal miners, known locally as ‘Zama Zamas’, have long been a nightmare for the South African mining industry and, recently, the criminality that sur rounds these illegal mining formations means they are a bane for communities in general. Not only do Zama Zamas place themselves at substantial risk while conducting illicit mining activities, they also pose a threat to the safety of legal mining workers, the environment, and urban and rural communities in general. A report by the Transnational Alliance to Combat Illicit Trade (TRACIT) demonstrates the scale of the damage caused by illegal mining in South Africa:  A 2017 report by the Minerals Council South Africa estimates that the annual commercial value of illegal mining and illicit dealings in precious met als and diamonds is about R7 billion, including heightened security costs to protect mines from incursions by syndicates.  There are between 8 000 and 30 000 illegal miners reported to work in South Africa, including

common reports of child labour and other human rights abuses.  Illegal gold mining operations have become a major challenge for legitimate companies, with as much as 5% of South Africa’s annual gold produc tion lost to illicit activities.  Estimates place the illegal mining and export of chrome ore at nearly 1 million tonnes per year – more than 10% of South Africa’s legal chrome output. This underground industry has been robbing South Africa of important tax revenue, royalties and foreign exchange earnings, while costing legitimate mining companies billions in production loss and increased security expenditure, as well as creating a burgeoning organised criminal enterprise that law enforcement is increasingly struggling to reign in. There’s a huge economical upside to artisanal mining ASMs will often exploit smaller mineral deposits that are uneconomical for large-scale mining operations, utilising basic equipment and simple technology. Freeing ASMs from the regulatory constraints of the current regime could create an avenue for illegal miners to lawfully participate in the mining industry, allow the government to regulate and benefit from the increased activity in the sector, create much needed jobs in the country, combat urban migration and alleviate the strain on local police forces. This change will not require a total revision of the current regulatory framework, rather a targeted reform, consisting of a relaxation of the legisla tive requirements. This will facilitate access to the

Ghana has demonstrated the potential of the ASM sector, having legalised small-scale mining in 1989.

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