Sector Programme
Extractives and Development
ASM-Arbeiter in Sierra Leone

Responsible Supply Chains Artisanal and Small-Scale Mining

In many developing countries and emerging economies, mineral resources are not only extracted by industrial mining but also by artisanal and small-scale mining (ASM). It is estimated that more than 100 million people are dependent on artisanal and small-scale mining. This makes ASM a major economic sector and an important source of income. At the same time, ASM is associated with various social and environmental risks. It is not uncommon for raw materials to be extracted illegally under precarious working conditions and with serious environmental consequences. Learn more about the topic of ASM.

Artisanal and small-scale mining (ASM) entails extracting mineral resources from deposits that are partially unsuitable for industrial mining using simple, labour-intensive means and low-tech machinery. The ASM sector has a high potential for economic development. According to by the World Bank, more than 40 million people work in the ASM sector in more than 80 countries worldwide. Taking into account family members, an estimated number of more than 100 million people depend on ASM for their livelihood. As an important source of income, ASM thus makes a significant contribution to securing livelihoods and reducing poverty of the local population, especially in rural areas with few other employment opportunities.

Despite these potentials, ASM is associated with serious risks. The production of mineral resources is often inefficient and sometimes entails the use of environmentally harmful and toxic chemicals. Artisanal and small-scale miners rarely have employment contracts or mining licenses, which means their work is not formalized. They often work in a self-organized manner or under the control of local patrons, sometimes illegally. ASM frequently takes place under precarious working conditions, in disregard of labour, children's or women's rights. In addition, in some regions of the world, ASM of certain minerals is linked to the financing of armed conflict, organized crime, and corruption. The causes of these problems include weak state institutions, inadequate legal frameworks or lack of implementation of regulations, and local power structures.

The formalization of ASM is seen as a crucial process in making better use of the development potential of ASM and minimizing its risks. On the one hand, this involves creating a legal basis for ASM (e.g. issuing licenses) as a foundation for further processes for the economic development of ASM operations (e.g. the provision of access to credit). At the same time, the organizational structures of ASM actors are strengthened (e.g. through forming mining cooperatives) and the provision of further support services seeks to improve operations (e.g. advice on more effective mining operations or the establishment of central processing facilities, the introduction of social and environmental safeguards). German Development Cooperation supports formalization as a multidimensional process for socially and environmentally compatible ASM.

The Sector Programme’s Commitment

The challenges in ASM can only be overcome jointly by governments, the private sector and civil society. The Sector Programme “Extractives and Development” therefore engages in various international and multilateral initiatives to promote responsible ASM that respects human rights and complies with environmental and social standards.

The Federal Ministry for Economic Cooperation and Development (BMZ) is a member of the European Partnership for Responsible Minerals (EPRM) (External link) and with support of the Sector Programme is actively contributing to the different workstreams of the initiative. The EPRM accompanies the implementation of the EU regulation on minerals from conflict-affected and high-risk areas (External link) with the aim of supporting a socially responsible extraction of minerals which contributes to local development. Through project financing, the EPRM supports responsible ASM in conflict and high-risk areas with the aim of improving the living conditions of artisanal and small-scale miners and affected communities and disrupting sources of conflict financing.

The Intergovernmental Forum on Mining, Metals and Sustainable Development (IGF) (External link) is a global cooperation platform that aims to leverage mining for sustainable development and poverty reduction. Consequently, it also works on sustainable ASM. Negative impacts are to be limited and benefits such as poverty reduction, inclusive growth, social development, and environmental protection optimized. The IGF also collaborates with German Development Cooperation, for example in the development of the guide Managing Artisanal and Small-scale Mining (External link) (ASM Guidance) for governments on how best to deal with the risks in ASM from a development perspective.

Furthermore, on behalf of the BMZ, the Sector Programme initiated an exchange of stakeholders in Germany on the topic of a responsible gold supply chain, with ASM of gold playing a central role. The workshop series “Responsible Gold in Germany” promotes the exchange of information between businesses, civil society, science, and development cooperation.

Responsible Supply Chains

Forum Responsible Gold Internal link

The Forum Responsible Gold promotes the exchange of experience and information between industry, civil society, academia and development cooperation and raises public awareness on responsible gold supply chains.

Responsible Supply Chains
Artisanal Gold Mining

European Partnership for Responsible Minerals (EPRM) Internal link

The European Partnership for Responsible Minerals (EPRM (External link)) is a multi-stakeholder initiative dedicated to the promotion of responsible mineral supply chains. The Sector Programme supports the BMZ in its role as member of the initiative.

Responsible Supply Chains

Responsibility along the Supply Chain Internal link

Many consumer products contain raw materials which are extracted in developing countries and emerging economies and associated with significant environmental and human rights risks. Through its activities, the Sector Programme supports the improvement of the conditions along the entire supply chain.

Good Governance
Mining vehicles

Anti-Corruption Internal link

Corruption risks extend along entire mineral value chains in the extractive sector, from bribery in the acquisition of licences to the misappropriation of public funds. Corruption distorts competition, reduces government revenues and undermines development-oriented budget allocation. Get more information on the topic of anti-corruption here.

Good Governance

Illicit Financial Flows Internal link

Combating illicit financial flows is an important concern of German development cooperation. The adoption of the EU Conflict Minerals Regulation will give new impetus to the issue of illicit financial flows in the extractive sector.