Possible Impacts of COVID-19 on Artisanal Gold Mining Communities

This is an ongoing article on Artisanal and Small-Scale Gold Mining (ASGM) Communities and how they may be affected by COVID-19. There will be regular UPDATES of this article on the Artisanal Gold Council's Blog that accompany developments of COVID-19 and as new information and thinking about its impacts on ASGM arise. www.artisanalgold.org

Update: March 28; Prevalence section - case numbers; Income and Markets section – Capital flows through Dubai’s Gold Market are impaired (video)Update: March 27; Income and Markets section – buying price for ASGM gold could crashHow could the COVID-19 pandemic affect ASGM communities?

Prevalence:

COVID-19 is present in most Artisanal and Small-Scale Gold Mining countries already and can be anticipated to follow a similar exponential growth pattern as has been observed in China, Iran or Italy if current control measures fail. COVID-19 is currently spreading rapidly in many countries in Asia and Latin America that have large ASGM sectors, for example (as of March 28 [1]): Indonesia (1,155 cases), Philippines (1,075), Brazil (3,904 cases) or Ecuador (1,823 cases). The number of reported cases in Sub-Saharan African countries is rising (e.g., Burkina Faso: 207, Ghana: 141). Reported case numbers, however, may be underreported and can change rapidly, with exponential increases as currently observable in the United States. The pattern emerging in ASGM countries appears to be similar to elsewhere and can be described as exponential where there appear to be few cases and then suddenly many. One aspect that may change this pattern is that some countries in Africa have lessons from Ebola and had therefore started airport screening as early as January, e.g. Sudan.

Health sector response:

The healthcare systems of many ASGM countries – and especially in remote ASGM areas – have fewer resources and therefore a lower capacity to respond to a COVID-19 outbreak. In many ASGM countries, the healthcare system will experience difficulties in handling the pandemic, especially if the incidence (the number of newly diagnosed cases per day) increases rapidly. This applies to several aspects including: (i) the ability to conduct tests and identify cases, which requires laboratory capacity and a sufficient workforce with adequate disease knowledge; (ii) the ability to isolate affected populations; and (iii) the ability to treat severe cases of COVID-19 that require hospitalization and respiratory support. Furthermore, misinformation, lack of information, or the inability to follow recommendations due to infrastructural barriers like a lack of water supply, hand sanitizers, soaps, disinfectants and tissue papers, could contribute to a rapid spread of the virus in some ASGM countries and more so in some ASGM communities.

Vulnerability of ASGM communities:

ASGM communities are highly vulnerable to COVID-19 outbreaks due to low healthcare capacities, underlying occupational health risks, and livelihood-related risk factors. While the remoteness of some ASGM communities might delay initial exposure to the virus, most communities are connected to urban centers and other areas through migrant workers, goods and services supply chains, and the gold trade. ASGM communities are therefore at risk of a COVID-19 outbreak, particularly if the outbreak in the respective country is poorly controlled. COVID-19 tends to be most severe in people aged 60 plus years and people with underlying health conditions. The ASGM workforce tends to consist of younger workers (16 to 40 years) and healthy, young workers might only suffer from mild symptoms. However, underlying conditions related to occupational health risks, esp. silicosis as obstructive lung disease, but also mercury-induced organ damage, can increase the severity of the course of the COVID-19 disease. In poverty-driven ASGM communities, livelihood-related risk factors such as malnutrition, infectious diseases, and lack of hygiene, can also increase the severity of COVID-19, causing a higher mortality rate.

Income and Markets:

The outbreak of COVID-19 in ASGM communities will likely affect the productivity of mine sites and therefore miner and community income. Generally, it is expected that productivity and hence income will drop due to increasing logistical complications with supply chains, labour disruptions, and potentially government-mandated lockdowns whether in ASGM communities or in centres that service ASGM communities. In some cases, miners might take more risks to try to extract more gold in order to pay for increased healthcare costs within their household (e.g., COVID-19-related hospitalizations) or for increasing food and goods prices. As COVID-19 affects the global economy, including the gold price and the price and availability of goods, it will dynamically affect the income of ASGM miners and their communities.Update:There is in fact a chance that the ASGM sector is shut down and that there will be a diminishing market for the miners' gold due to the disruption of global air networks which are the backbone for large parts of the ASGM gold trade. Capital flows through Dubai’s Gold Market are impaired as it is currently shuttered and disinfected (video). This could crash the buying price and cause a net transfer of wealth away from miners and communities.Shawn Blore (AGC) points out that most of Africa’s ASGM gold is transported via courier's hand-carrying gold. With Emirates no longer flying, and the UAE not allowing people to enter, that market is effectively frozen. Gold is a cash business and since most African exporters work with their own capital, they rely on quick turnover on their gold stocks to continue purchasing. As a result, we may see a situation where, despite record-high gold prices, African gold miners will have little demand for their product and local buying prices crash. It could be a huge disruption in the ASGM supply chain.Judith Karangi, who works in Tazania with the Sustainable Development Goal Africa Independent Assessment (SDGAIA) has already begun to see this. ASGM supply chain disruption is causing shifts in prices, with the field buying price of gold going down and the cost of goods going up.

Poverty-induced increase in ASGM activities:

A possible increase in the ASGM population could lead to a dilution of incomes. As unemployment grows and incomes drop in ASGM countries (as is expected in non-ASGM countries), an increasing number of households could be pushed into trying to make a living through ASGM. This may lead to increased migration into ASGM sites and potentially an increase in occupational accidents due to ‘unskilled’ persons entering the ASGM business, and likely lead to increased tensions in ASGM communities due to increased competition over resources.

Child labour:

COVID-19 in ASGM countries could lead to increased child and youth labour. Children and youth seem to be less vulnerable to COVID-19. Child and youth labour might be on the rise in some affected countries to support the household income or to replace sick or deceased household members at an ASGM site.

Mercury use:

COVID-19 may lead to increased mercury use if desperation grows in ASGM communities. An economic shock to ASGM communities does not provide the economic space to work towards the elimination of mercury use that is required for income-deprived communities to make the transition to better practices. Though non-mercury methods can be more profitable, they require more knowledge and investment which will be in shorter supply due to the disruptions caused by COVID-19.[1] https://www.arcgis.com/apps/opsdashboard/index.html#/85320e2ea5424dfaaa75ae62e5c06e61