6, December, 2012

Small-scale and Informal Mining: A Big Problem for Latin American States

Latin America has experienced substantial growth and transformation in small-scale mining, meaning it is often no longer small or artisanal, but rather characterised by high informality and an increasing potential to generate conflicts.

Small-scale and informal mining became a major issue during the late 1970s and 1980s in Latin America. Extensive and easy-to-exploit mineral deposits, especially gold and gems, attracted the interest of small miners and offered an option for earning a living in a context of economic downturn. Large settlements of small-scale and informal miners appeared in Bolivia, Brazil, Colombia, Peru and Venezuela. Countries in the region, however, have not been successful in controlling, regulating or even banning small-scale mining. Poor management of mining rights, overlapping with indigenous land rights, along with environmental pollution, emerging social conflicts and the onset of other illegal activities, were part of the usual set of problems faced by states. Given the complexity of the phenomenon, assessments of the nature of the problem were frequently incomplete, as were the set of solutions to address it. This Brief presents the typical approaches used to address small-scale mining in the region, describing their shortcomings, while also identifying some policy measures that have proven to be more effective. It also presents a new kind of approach that is gaining support in the region, one that moves beyond focusing on the small-scale miners themselves, to addressing higher, more formal links in the mining value chain.

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Key Lessons:

  • While historically policies dealing with small-scale and informal mining have focused on oversight and regulation of the individual miners themselves, more recent initiatives are aiming at further up the gold value chain where there are fewer actors and where most of the rent is generated.
  • Most successful programmes to improve the environmental performance of the small-scale mining sector involve an integral approach that addresses technical, social, economic, legal and organisational aspects.
  • The media can play a key role in exposing corruption and pressuring governments to take action against this pervasive aspect of small-scale mining.
  • Cooperative schemes between formal mining firms and small-scale miners have proved to be an effective way to prevent conflicts and reduce environmental impact.

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