Case Study 08 (Spanish):
Case Study 08: Formalizing Artisanal Mining at Fruta del Norte

THE ISSUE: Approximately 15 million people in more than 70 countries earn their livelihoods through artisanal and small-scale (ASM) gold mining. Because much of this activity is informal, conducted by unlicensed groups and individuals, there are no direct measures of gold produced by artisanals; however, estimates range from 8% to 15% of annual gold production worldwide. While the sector is an essential source of wealth in the informal economy, most ASM activities are unregulated and may be undertaken without adequate regard for the health and safety of the miners or for the environment. ASM also represents a potential liability to mining companies when these mining activities encroach on legally held concessions. How can large-scale and ASM mining co-exist in a safe and harmonious relationship?

THE KINROSS WAY

Artisanal mining (ASM) is not an issue at many of Kinross’ operations, but where it is, we look to minimize the potential for conflict, safeguard our employees, ensure the security and integrity of our operations, and respect both the legal and human rights of artisanal miners. Because the context is so different in each area, we take a site-specific approach. Kinross’ FDN development in southeast Ecuador, where informal mining has been underway for decades, offers a good case study of one site-specific approach.

Fruta del Norte (FDN) is a hardrock deposit quite unlike the alluvial deposits typically mined by ASM methods in Ecuador, and, prior to its discovery by Aurelian in 2006, the deposit was not known to or mined by artisanal miners. However, there were ASM activities on other areas of the concessions acquired by Aurelian in 2003, and those activities have been the subject of a long strategy of non-confrontation on the part of Kinross.

Appreciating the economic importance of ASM activities in the region, Kinross was interested in developing constructive and inclusive mechanisms to formalize the ASM operations, create a basis for productive relationships with the miners, and support the Ecuadorian government’s recently adopted regulations to guide a country-wide formalization process for mining activities.

After the Ecuadorian government enacted its new Mining Law and associated regulations in late 2009, Kinross worked with the Ministry for Non-renewable Natural Resources to develop a strategy for formalization of ASM activity on its concessions. In 2010, an aerial study of FDN found 42 unregistered surface, underground and alluvial operations and a significant inventory of equipment and structures to support them.

In consultation with government agencies and local authorities, public safety bodies, neighbour communities and the informal miners themselves, Kinross developed a strategy founded on dialogue, respect for the law, human rights principles, and best international practices. Its goals were to:

  • Identify and confirm ASM mining activities on Kinross concessions; 
  • Develop mechanisms to legalize artisanal and small-scale miners with a long-standing presence in the region; and
  • Initiate training programs focused on legal and institutional frameworks, and health, safety and environmental considerations, among others.

The strategy has been successful in engaging multiple stakeholders to help address ASM mining issues, provide training and support for safer processes, and allow Kinross to develop its concessions unimpeded.

Between 2010 and mid-2012, Kinross and its stakeholders completed the following:

  • Formalized eight artisanal mining operations, benefiting approximately 50 miners, with another 12 to 15 operations in different stages of formalization in 2012;
  • Inspected 25 additional artisanal operations to assess the possibility of formalizing them;
  • Relinquished 54 hectares of its Zarza concession for small-scale underground mines near FDN (retaining exploration rights for Kinross) and 24 hectares in its Victoriana concession for barite exploitation to allow small mining groups and associations to legally register and undertake operations on them;
  • Developed a workshop on mining law and institutions for artisanal miners; and
  • Implemented an environment, health and safety training workshop for artisanal miners.

In addition to Kinross’ initiatives, other companies have initiated formalization processes and the government is in the process to formalize about 1,000 artisanal miners to date in non-concession “free” areas in the province.

The successes to date in formalizing ASM within the FDN project area give rise to the potential for future challenges. These include consideration of miner certification, and how to deal with increased immigration of artisanal miners wishing to capitalize on the economic security of formalized operations, including those who may not be aligned with Kinross’ procedures and government mining policy. Kinross’ FDN Corporate Responsibility and Community Development teams are incorporating these concerns into their annual site strategies with the goal of developing participatory solutions as needed with government, local authorities and communities, and other stakeholders.

> Go to Addressing the Issues