The Transformative Power of Fair Trade Gold Mining in Kenya and Tanzania
I just came back from visiting small scale gold miners in Kenya and Tanzania that are seeking fair trade certification. The trip was sponsored by Fair Trade International, funded by a grant from the UK charity, Comic Relief. On site, I met with colleagues in from England and Africa, who have been working hard over the past two years to build an understanding of standards at the mine. Part of the purpose of the visit was also to bring jewelers and miners together to discuss what was needed to bring fairtrade gold to market.
First, a bit of background on small scale gold mining. Small scale mining produces as much 25% of the world’s gold supply. The image below is typical of what you’d see at one of these mines in Tanzania—a mix of people around water, dirt, diesel and machinery.
In the developing world, small scale gold mining is subsistence based, almost always illegal, unregulated, and extremely toxic. A small scale gold mine can look like destroyed river banks or patches of toxic tailings in the middle of a rainforest. Sometimes it is done part time, to supplement or substitute for agricultural. Amost universally, it is considered huge problem in the developing world. Annually, small scale gold mine spills 1400 metric tons of mercury into the environment– mercury is,one of the most dangerous of all neuro-toxins.
Fair Trade gold works with small producers. What is considered small versus medium or large is not yet clearly defined. One benefit of small scale mining is that it employes a lot of people. Worldwide, 60% of the gold is produced by large mining companies that might pay a small royalty to a government and export the gold out. Large scale mining employes about 700,000 people. Worldwide, small scale gold mining is done by 25 million people. This potentially could be a a huge amount of money entering the local economies in producer communities.
Fair trade succeeds in transforming small scale gold miners from a resource curse into in an environmentally responsible business initiative that alleviates poverty. The operations I saw employed forty to sixty people. They might produce between three quarters of a kilo and a kilo of gold a month. Fair trade gold is not charity. Fair trade provides a certification structure and credibility that allows fair business between empowered producers and ethical international business people.
Below, Greg Valerio introduces us to the first mine in Tanzania. Greg started the fair trade gold movement and currently directs Fair Trade’s international gold program. In the background is Gonzaga Mungai who leads the Fair Trade Gold Africa team; Tina Mwasha, Tanzania’s first woman mining engineer. She devotes herself to helping small miners understand what must be done to do their work safely and achieve fair trade standards.
While some small scale gold mining involves digging big pits, what we saw in the mines up for fair trade certification were shafts, as shown to the left. As for the shafts themselves, though they are reinforced with timber.
The miners digs along gold veins and 50 kilo sacs of ore are hauled up from the holes, as shown. Once a vein of ore is discovered, the miners follow it horizontally. How far they depends the go depends upon the type of ore that they are digging. Cave ins are not uncommon. I spoke with one of the local miners who told me the story how he was trying to take care of a number of orphaned children of dead miners
Here’s a close up of rock ore. When you hold it, it feels much heavier than a normal piece of rock.
The amount of gold in a piece of ore varies, but a typical amount would be an ounce of gold per ton of rock, which may take a day to dig. But these numbers really depend upon the particulars in a given site. Some of the mines we visited had more than one pit going. There are thirty-one grams of gold in a troy ounce and each one of these bags in the photo below might contain a gram or more of gold.
Often the rock that is hauled up needs to be dried out. Shown below is a woman spreading out the ore to dry in the sun.
The next step, as shown below, is crushing the ore into fine powder, which involves machinery. When you walk on to an active site, you’ll hear the loud noise of the tumbler as shown in the tent in the background.
After the rock is crushed, the gold concentrated in the dirt. This is done through sluices in containment ponds, as shown below.
The next step involves mixing the gold with mercury. Mercury attaches to the gold and forms an amalgamation. The photo to the left below shows how it is typically done. The man is mixing mercury and the concentrated dirt with his bare hands. The second shows a safe method by a worker at one of the mines trying to attain fair trade certification.
Now, the gold ends up looking like this, as shown below. This photo was from a mining group that was not committed to working toward fair trade gold certification. Mercury is so toxic that if someone broke a mercury thermometer in a high school science class they’d call a hazmat team in! People who work with mercury do not really believe that it is that dangerous.
Next, the typical unregulated miners would take the gold and mercury and put it in a pan to burn off the mercury. This releases methyl mercury, a high dangerous toxic gas that stays in the environment. The pan they used to cook off the mercury is often utilized for cooking afterwards. However, with fair trade mines, a mercury retort, as shown below, is used which cools the gas and converts it back into mercury which can be reused.
I’ve had discussions with environmentalists and no one feels good about the mercury issue. But it is very difficult to get small scale miners to abandoned mercury. Over time, with fair trade, the goal is to get small scale miners off mercury completely. But in building capacity and employing best practices, we have to start with where the miners are. Using cyanide is a better practice. It is also possible to get the gold without chemicals. To do this requires equipment that costs about $20,000. However, this “eco gold” gets an even higher premium.
Once the miners get their gold, they sell it, often the same day. A small scale gold miner might make between a half a kilo and kilo of gold a month. Depending upon how pure the gold is, and the international spot price, a kilo of gold might have a value gold would have a value of between $40,000 and $45,000.
But the gold miners don’t know the true value of their ore and they are never fairly paid for their efforts. They sell to middle men who buy their gold at up to 30% under its real value. Also, because refining methods are not that efficient, miners can leave another 20% of their gold in their tailings. They don’t have the equipment to get the full value of their ore. The miners from Uganda told us stories of how when they were selling their gold, they were often marked and robbed.
Because of the overhead and the underselling of the gold, the miners who typically make between $100 and $300 a month cannot prosper. When fair trade gold standards are in place, gold is purchased initially at 95% and eventually at 98%. There’s also a $2000 premium paid back to the miners per kilo which can be used any way that the community chooses.
This additional income means families are able to better support themselves. There’s more money in the local community for schools and other programs to improve their lives. When we visited, the miners were very excited and eager to learn how to enter the system. Below the remarkably passionate Willy Hamilton, from the Company of Master Jewellers in the UK explains to these woman the benefits of fair trade and how committed he is to bring it into the market in England.
There is also the issue of documentation and logistics. This is a huge leap that is being facilitated by Alan Frampton, of Cred Jewellers, the world’s leading fair trade jeweller and buyer of fair trade gold. Alan, shown with Tanzania mining leaders, has been instrumental in the process. Typically, a miner sells the gold soon after he gets it, but Alan has offered to front the miners some money for labor so that they can accumulate a kilo of gold, which is the minimal amount required for economical shipping.
With more funds, the miners are able to better support themselves and buy equipment that will make their operations more efficient and safer. Once their projects are underway and other miners see that they can make more money and have greater safety by following fair trade gold standards and principles, they too will naturally want to join in. Slowly, over the next five to ten years, we could see a profound shift in entire small scale gold mining communities in Kenya and Tanzania. Greater prosperity and safer working conditions.
Our fair trade trip was also about building a greater community and recognizing how we share common values around social and economic justice. To listen to the miner’s stories and meet the people on the ground from Africa was so moving and inspirational. Below is the group from Kenya and Uganda.
As a jeweller, when I have this gold, I can point to the hole from which it was actually dug and say that the wedding ring is profoundly helping small scale miners in Africa live a much happier and healthier life. For the customer, what could be better than wearing wedding ring that in its very sourcing represents a more beautiful world that we all want to see?
Together, with fair trade gold, we can accomplish a remarkable transformation.
