Artisanal and small-scale gold mining (ASGM) accounts for 20% of global annual gold supply as well as 80% of the total labour in bullion production although conditions and environmental standards are often poor, with miners often exploited and proceeds fuelling war, conflict and illicit financial flows.
These are the findings of the World Gold Council (WGC), which believes that instituting responsible sourcing standards for the industry would be helpful in strengthening global gold supply chains.
“The introduction of legally enforceable and mandatory responsible sourcing rules in all jurisdictions would mark an important step in strengthening global gold supply chains, alongside measures to introduce and expand domestic frameworks that facilitate the integration of ASGM within them,” said the WGC.
South Africa, Zimbabwe, Mali, the DRC and others are among the African continent’s top gold producers.
However, artisanal miners, popularly known as Zama Zamas in SA and amakorokoza in Zimbabwe, have also been disturbing formal mining areas and often invading closed mines, thereby posing environmental and safety hazards.
Yet artisanal “millions of livelihoods depend on artisanal miners but working conditions and environmental standards are often poor” and dangerous. The miners are also exploited while child labour is rampant.
“Many employed in the sector have no choice or viable economic alternative. There is growing contribution of illegal mining to international crime, corruption and conflict,” noted the report by WGC.
Despite the risks and dangers, the allure of gold has always been glittering for artisanal miners. Over the last two years, the international gold price has increased by over 40%.
According to David Tait, CEO for the WGC, “sustained high gold prices provide an additional incentive for participation” in artisanal gold mining.
“The reality for those involved in ASGM is rarely prosperity. The sector is more likely to be associated with environmental degradation, the use of mercury, child labour, and poor safety controls,” said Tait.
Data from 2019 showed that vast amounts of gold were smuggled out of Africa yearly.
This includes 25 tons smuggled from South Africa worth over $1 billion, 30 tons from Sudan and 20 tons from Zimbabwe, worth over $500 million.
More than 20 tons was smuggled from Mali, more than 10 tons from Burkina Faso and the DRC respectively, and 8 tonnes from Ghana.
Some South African banks have previously been named in “serious allegations of serial bribery” involving gold dealings and smuggling.The South African banks were said to have been involved in facilitating the “laundering of gold and the illicit profits from the sale of gold from Zimbabwe and South Africa” via Dubai.
The WGC said it believed that South Africa’s assumption of the G20 Presidency in 2025 will help to emphasize the importance of putting in place standards that prevent illicit financial flows and protect the environment from hazards related to gold smuggling.
“These important economic and geopolitical groupings offer an opportunity to exercise convening power to take further and additional implementation and enforcement action to safeguard ASGM communities, and prevent illicit financial flows from the gold sector from exacerbating international security threats,” said the WGC.
“Having agreed in principle to prevent Russia funding its war effort through profits from gold, G7 and G20 countries need to do more in this space, in eight key respects.”