Tracking gold from mine-to-market
Wednesday June 07 2017
The Great Lakes region has successfully implemented the first conflict-free artisanal supply chain for tracing gold from mining sites to buyers in the international market.
Partnership Africa Canada (PAC) has developed the Just Gold project to ensure traceability of the precious mineral and formalise the artisanal mining sector at Ituri in eastern Democratic Republic of Congo.
It sets standards that guide miners and suppliers in conflict-affected areas and provides certification that these have been met. Such certification covers all mining in the Great Lakes region.
The Just Gold project offers incentives to encourage gold miners to channel their product through responsible exporters who will ultimately ensure they get fair and transparent prices and technical assistance in return for legal sales.
Miners in DRC are prone to corruption and violence since gold mined by artisans is often a conduit through which armed groups are financed. This inevitably leads to exploitation of mining communities and loss of revenue for government when gold is smuggled.
READ: DR Congo cracks down on gold smugglers
The PAC executive director Joanne Lebert said almost 600 miners have been registered since the Just Gold project began in 2015 in Ituri Province. A successful chain has been established from mining sites up to the eventual exporters.
PAC has researched and analysed the gold supply chain by artisans in order to better understand women’s role in the sector. Armed with these findings, Just Gold has improved awareness of women’s rights, their right to access, control and benefit of resources. It also encourages women to take up leadership roles through skills building and training.
The hardest thing is to prove that gold mined by artisans in eastern DRC is conflict-free so as to ensure gold is sourced from a free people. Miners are taught better exploitation techniques and offered equipment. Gold thus produced must be sold through legal channels.
“In the Just Gold project, the legal conduit for gold is a model trading house that buys gold at competitive, fair and transparent price, packages it, and sells the gold on to a partnered legal exporter,” said Ms Lebert.
The Just Gold project has undertaken a comprehensive environmental impact assessment. It is also promoting sensitisation of miners on safe mining practices that conserve the environment.
She said Partnership Africa Canada will engage international refiners and jewellers to buy the gold directly from the project’s exporters so as to complete the chain of custody from the goldmine to the consumer.
The project currently has one local exporter who has been vetted. Should any risks arise, sales of gold to the exporter can be suspended.
The project is designed to be financially sustainable so that profit margins from gold sales cater for operating costs, traceability and servicing equipment. As volumes rise and global interest increases, miners should also get higher prices.
A percentage is also invested in a managed community development fund to promote local natural resource governance and ensure residents of Ituri who participate in the project are the ultimate beneficiaries of the gold from their mines.
Ms Lebert said PAC plans to implement the project in South Kivu Province using the lessons learned in Ituri to expand operations.
Separately, discussions are ongoing with the DRC government to create a conducive regulatory and legal environment to encourage artisans and small-scale miners to sell gold legally. The ultimate objective would of course be to improve livelihoods and community security.