Ensuring responsible artisanal mining

A partnership between a blockchain company and technology start-up has seen the birth of a platform that will improve the transparency and traceability of minerals, which will ensure more ethical mining activities

Businesses are under increased pressure to ensure resources are sourced responsibly, but with a large portion of the mining industry in sub-Saharan Africa made up of artisanal (or small-scale) miners, it can be a challenge to ensure ethical mining procedures are followed. Technology start-up Minexx has teamed up with blockchain company Finboot to provide a solution: MineSmart.

The platform provides improved transparency and traceability of minerals to ensure resources are not obtained through child labour or from regions in conflict. On the platform, minerals are certified and tokenised with secure credentials sent across the digital value chain to establish trust. Small-scale miners can then receive a fair price for their minerals.

In an article by Mining Technology, Nish Kotecha, Finboot co-founder, says: “The ability to verify products’ credentials and communicate these in an auditable, immutable and trusted way is blockchain’s core strength.”

In the same article, Minexx founder Marcus Scaramanga notes: “Approximately one in eight people in sub-Saharan African countries is dependent upon artisanal mining, yet the industry is poorly regulated and often lacks transparency and fairness. By integrating Finboot’s technology into our MineSmart platform, we can harness the power of blockchain to track and record mineral origin data securely.”

While this technology can benefit the small-scale miners in South Africa, there first needs to be a push to divert illegal mining activities to legal artisanal mining that forms part of bigger mining operations with a more structured approach to when and where minerals can be mined.

Annually, in South Africa, roughly R14 billion is lost in gold production as a result of an estimated 30 000 illegal miners – dubbed Zama Zamas (“try your luck” in isiZulu). The Department of Mineral Resources estimates that there are as many as 6 000 illegal mining operations scattered across South Africa. Currently, illegal mining in South Africa is disorganised and often controlled by syndicates.

Times Live quotes Alan Martin, a technical adviser and investigative researcher for think tank Enact: “The problem with Zama Zamas is unlike anything seen elsewhere in Africa or beyond. The artisanal mining is principally carried out underground in industrial shafts, not in open pits, as is normally the case.

“While many artisanal and small-scale mining communities navigate a daily combination of unsafe and precarious working conditions, in South Africa Zama Zamas are exposed to extortion, murder, forced migration, money laundering, corruption, racketeering, drugs and prostitution.”

However, by formalising these small-scale miners and equipping them with the technology to trace minerals,
this industry could become a contributing part of the economy.