SEF Canada is working with artisanal miners in Ecuador to eliminate mercury in gold processing while developing local economies. SEF Canada’s managing director Suzette McFaul discusses the project’s community-driven approach to developing more sustainable practices in artisanal gold mining.
Miners in the Clean Gold project are transitioning from mercury to cyanide-based processing methods. Image courtesy of SEF Canada.
Clean Gold has partnered with the University of British Columbia and others to form a technical "dream team". Image courtesy of SEF Canada.
Artisanal miners often struggle with the brutal economics of small-scale production and accessing markets. Image courtesy of SEF Canada.
McFaul with a worker on-site in Ecuador.
On 16 August, the Minamata Convention on Mercury entered into force, marking the culmination of a years-long effort to come up with an international response to the shared threat of mercury exposure.
While mercury has been used in industrial processes for hundreds of years, its extreme toxicity poses massive public health risks. Mercury poisoning can cause irreparable brain damage and organ failure, and low-level exposure is a significant cause of premature deaths.
The Minamata Convention, named after the Japanese city that has been living for decades with the consequences of a mass mercury poisoning, brings with it tighter controls for the handling of mercury in industry, as well as provisions for what it calls the “phase-out and phase-down of mercury use in products and processes”.
It also means renewed scrutiny on the use of mercury in artisanal and small-scale mining (ASM) in many countries, and artisanal gold mining in particular. Mercury is used extensively in ASM operations, and often in highly unsafe domestic conditions, to process ore and recover gold.
But for small-scale miners working with simple tools and lacking the deep pockets, greater pressure to stop using mercury hasn’t changed the economic fundamentals of their trade. Technical limitations mean that recovery rates are low and the grey market buyers of their gold, often jewellers, offering far below spot value. “And that’s if they don’t get mugged on the way in a cash-based society,” says McFaul.
After being invited to southern Ecuador’s El Oro province in 2014 to see how SEF’s economic development model might help artisanal mining communities, McFaul established Clean Gold Community Solutions (Clean Gold) to take a more holistic approach to improving ASM standards in the region.
The company has partnered with artisanal miners, along with a technical ‘dream team’ led by the University of British Columbia, to make the transition away from mercury processing, while also taking on the upgrade of a local gold processing plant to refine the miners’ products and instilling business development skills to empower the miners as business owners.
The plant, which McFaul says should be up and running “around next week”, will switch out mercury for cyanide in the recovery process, as the latter breaks down much more quickly if released. But the partnership, McFaul stresses, is about more than just replacing a harmful industrial element; it’s about building new, sustainable systems centred around the plant.
In turn, transparency around processing methods and environmental performance facilitates access to markets that will offer close to spot prices for the miners’ gold, rather than the 40-60% of spot price that McFaul says they get from grey market buyers.
At the heart of Clean Gold’s model is prioritising the economic and social health of the whole community that surrounds ASM operations. This starts with only partnering with miners who have invited the company to do so, and developing the local economy is part of the deal.
“The community has to buy in and the community has to win,” says McFaul. “There’s a community foundation that comes out of every Clean Gold project. “The community has to agree, and the miners agree, that part of that community foundation will go into an SEF model to help all the other people in the community.
The approach aims to be the polar opposite of the exploitative, opaque relationships that can characterise mining communities’ interactions with large-scale mining companies. Putting the reins in the hands of the community helps create a virtuous cycle that is key to the wider economic development plan, even if a hands-off approach presents its own challenges.
Clean Gold is keen to expand its methods to ASM communities around the world. Plans are already in place to set up another project in Ecuador next year, and McFaul is hoping that the current plant upgrade and community development scheme will be a strong showcase to help sell the concept to prospective future investors.
If the money can be found, there is apparently no shortage of demand for the Clean Gold model. The company has already visited Guyana, and McFaul says invitations have been extended from neighbouring Colombia, as well as Kenya and Mali.
Certainly there are challenges still to come. If the model is to be a true success on its own terms, it will be vital that miners and local families are as happy with the profit-sharing arrangement as the investors. But if the project in El Oro Province can make its environmental, ethical and business case, it could set a progressive template for cleaning up artisanal gold mining while also encouraging sustainable growth in communities that often live well below the poverty line.