REVIEW OF THE SMALL-SCALE MINING POLICY AND LICENSING PRACTICES IN - PowerPoint PPT Presentation

REVIEW OF THE SMALL-SCALE MINING POLICY AND LICENSING PRACTICES IN THE ASIA-PACIFIC COUNTRIES By EDMUND M BUGNOSEN BUGNOSEN MINERALS ENGINEERING 80A Belgrave Road London E17 8QG United Kingdom emails: edbugnosen@yahoo.co.uk <> edbugnosen@ntlworld.com CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006

DEFINING SMALL-SCALE MINING Difficult and elusive International Workshop on the Importance of Mining to Industrial Development held in Bandung (1982) formed a working group to define small-scale mining. The group failed to provide a definition. Conclusion: the definition of small-scale mining is highly dependent upon the policy, practice and other conditions of a given country. CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006

SOME DEFINITIONS • mining activities, relying heavily on manual labour using simple implements and methods and do not use explosives or heavy mining equipment. (Philippines) • a single unit of operation with minimal investment of not more than ten million pesos (about £100,000) and producing no more than 50,000 metric tons of run-of- mine ore per year by heavy reliance on manual labour without the use of sophisticated mining equipment (Philippines) • determined by the Government based upon the amount of capital investment, the type of mineral, the area and the amount of mineral reserves. Artisanal mining refers to mining occupation carried out by manual means with non-mechanized tools. Part-time artisanal miner refers to one who mines occasionally and does not solely depend on mining for employment. (PDR Lao) • prospecting and mining in an area designated doe small-scale mining, which uses specialised technologies and methods not involving substantial expenditure (Ghana) • single unit mining operation having an annual production of unprocessed materials of 50,000 metric tons, or less as measured at the entrance of the mine ( UN, 1972) CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006

COMMON UNDERSTANDING/CONCEPT • Proponents - citizens of the country concerned • Operational structure - individuals, groups, cooperatives even established companies • Capitalization - limited • Production - limited • Mining - use of explosives, machineries and equipment not allowed • Processing – application of sophisticated techniques is restricted or not allowed • General work practice allowed – manual labour CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006

ASM - broad meaning the ‘bottom-end’ of the mining sector > mainly in the hands of nationals > undertaken as means of livelihood or as a business enterprise > includes legal and illegal operations CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006

PROPONENTS MINING SECTOR top LARGE-SCALE MINING • International corporate mining houses • State owned/controlled companies • Junior mining/exploration companies • Local mining companies ARTISANAL AND SMALL-SCALE MINING • Local companies ASM • Cooperatives (formal & informal) • Partnerships (informal) bottom • Individuals CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006

POLICY - DIVERSE PURPOSE GOALS • generate employment opportunities • improve living conditions in the rural areas • stop environmental destruction SPECIFIC OBJECTIVES • curb illegal mining and stop smuggling of mineral products • address erosion and siltation of water courses • develop and exploit existing small mineral deposits • promote mining that does not involve substantial expenditures • contribute to foreign exchange earnings • provide mechanisms of collecting government revenues • control mining rights of cultural minorities within their lands • encourage private citizen prospectors CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006

POLICY FEATURES/ISSUES • Access to mineral lands > segregating and declaring specific ASM sites > mandatory reduction of exploration permit areas • Relations with mining companies (large-scale mining) > permitting within existing mining claims > contract mining • Safety > safety rules and regulations • Marketing > Licensing buyers > Government buyers • Environmental protection > environmental protection plans and programmes > posting of surety bonds to ensure compliance • Institutional support > Specific government office for ASM > Management by local/regional government > Licensing and permitting procedures CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006

LICENSING PRACTICES • Informal or undocumented license • Strata licensing • Group permitting • Licensing by minerals • Staggered or single licence • Overlapping/double permits • National and local government licence CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006

COUNTRY LICENCE/ AREA DURATION QUALIFIED APPLICANTS PERMIT PDR Lao artisanal licence to be specified 1 year Lao nationals ssm licence 5 sq. km. 5 years no restrictions Indonesia peoples mining permit 1 ha for individuals 5 years Indonesian nationals who resides in the up to 25 hectares for area cooperatives Papua New informal licence within own land PNG national land owners Guinea alluvial licence 5 hectares 5 years landowner PNG nationals mining lease 60 hectares 20 years no restrictions Philippines gemstone permit to be specified 1 year Filipino nationals commercial guano permit 5 hectares 1 year Filipino nationals living in the are gratuitous guano permit 2 tons limit upon extraction of -do- volume commercial sand and 5 hectares 1 year Filipino nationals gravel permit industrial sand and gravel 5-20 hectares 5 years Filipino nationals or 60% Filipino owned permit companies ssm permit to be specified 2 years -do- ssm contract 20 hectares 2 years Filipino nationals or co-operatives CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006

COUNTRIES LICENCES PROVISIONS PDR Lao artisanal licence non-exclusive right, may be cancelled when considered inappropriate for economic development ssm licence transferable Indonesia peoples mining permit working not more than 25 metres deep, use of heavy equipment not allowed , use of explosives and cyanide not allowed, applicable in designated or established areas only Papua New informal licence non-transferable, only non-mechanised operation allowed Guinea alluvial licence transferable, but only to other land-owners, extraction is limited to a certain depth to be specified mining lease transferable Philippines gemstone permit manual gathering only, no tools and explosives allowed, transferable commercial guano permit Transferable, no explosives allowed, one permit per cave gratuitous guano permit only for personal use of holder commercial sand and gravel Transferable, no processing allowed permit industrial sand and gravel Transferable, processing allowed permit ssm permit transferable, licence holder to produce within 12 months, working limited to 50 metres vertical depth, need separate permit for processing ssm contract depth of working is limited, to be specified, need separate permit for processing, non-transferable CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006

Provisions of Small-scale Mining Permits/Licences Other countries COUNTRY LICENSE/PERMIT AREA DURATION QUALIFIED APPLICANTS (Year) Uganda Location licence To be specified 2 Ugandan nationals or 51% Ugandan owned Tanzania claim to be specified 1 Tanzanian nationals Ghana ssm gold licence 3-25 acres 3-5 Ghanaian nationals depending legal personality Zambia ssm licence 400 hectares 10 no restrictions gemstone licence 400 hectares 10 no restrictions artisanal licence 5 hectares 2 Zambian nationals Brazil ssm licence 50 hectares 5 Brazilian nationals Ethiopia artisanal licence 5,000 sq.m. 1 Ethiopian nationals ssm licence depends on type 10, or life no restrictions of mineral of deposit CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006

GENERAL OBSERVATIONS • Mining policy focused on attracting capital from foreign investors >>> biased towards large-scale mining >>> control rather than develop/enhance ASM >>> maintain/relegate ASM as low capital/simple mining operation • ASM support institutions suffer from funding and personnel • Segregating specific ASM sites seem not working • ASM permitting within existing mining claims (allowing two different mining rights over one area) is not successful. • Staggered licensing practices (one for mining, one for processing and another for marketing) not helpful • Restrictive provisions of the different ASM permits and licenses hinder the development of viable and well planned operations >>>>>> many ASM operate outside the legal framework CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006

REMARKS/RECOMMENDATIONS • Policy makers need to consider, understand and accept ASM as long-term economic activity that needs to be developed, sustained and allowed to grow or improve … mining need not always be “big”! • More focus on developing ASM as a business enterprise • Do away with restrictive ASM permit provisions CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006

Thank you Thank you CASM Asia-Pacific Meeting, Bandung, Indonesia, November 2006