Sand, gravel and salt may have a low price per tonne, but their value for domestic development and their potential for local employment creation is significant, especially when compared to the more talked about minerals like copper and gold. With 70% of the world’s population expected to live in cities by 2050, these humble ‘Development Minerals’ will play a crucial role in building homes and urban environments. The African, Caribbean and Pacific Group of States, supported by the EU and UNDP, have initiated a capacity-building programme to develop this sector sustainably and improve livelihood opportunities. In this Voices & Views we focus on how to improve access to finance for women small scale miners, as well as the benefits of regional knowledge exchange.
What are development minerals?
Also known as ‘low value minerals and materials’ due to their low price by weight, Development Minerals are used in industries such as construction, manufacturing, infrastructure and rural development. Crucially, they are mined, processed, manufactured and used domestically. They include:
In the following video, Dr Daniel Franks and Caroline Ngonze outline the ACP-EU Developmet Minerals Programme and how it addresses challenges in the sector:
The development community’s engagement in mining has tended to focus on two main areas. First, the large-scale mining of metals and energy minerals, which is dominated by multi-national mining companies. Here, donors work on improving transparency and regulation, resolving local-level conflict and addressing environmental issues. The second area is the small-scale mining of export commodities such as gold, gemstones, and so-called technology metals (tin, tungsten and tantalum). Here, donors tend to work on the environmental challenges caused by chemicals used in the extraction process, the association of minerals’ extraction with civil conflict, and occupational health and safety issues.
Yet millions of people in developing countries earn their living through another kind of mining – extracting Development Minerals. “It’s the majority of the mining sector, mostly made up of small and medium-sized businesses,” said Dr Daniel Franks, Chief Technical Advisor for the ACP-EU Development Minerals Programme. “We are talking about the livelihoods of millions of youth and women, who make up the vast majority of artisanal and small scale miners in Africa. The development community has never worked in this sector in this way before.”
The sector’s value proposition is pretty much the opposite of high-value mining, according to Dr Franks. While high value minerals and metals enrich the extractor and government but create few jobs and little ‘trickle-down’ wealth, Development Minerals “are mined, processed, manufactured and used locally, so they benefit domestic economies,” said Dr Franks. “You’re not going to get large amounts of Foreign Direct Investment, royalties and primary taxation, but you are supporting local economies from the ground up. These commodities fuel downstream domestic businesses, producing windows, houses, roads and bridges.” They are also generally inert, so don’t require environmentally damaging chemical extraction, and are sometimes renewable (eg. salt).
The ACP-EU Development Minerals Programme is an initiative of the African, Caribbean and Pacific Group of States, funded by the EU and UNDP. It is a three-year programme worth €13.1 million which aims to develop capacity and share best practices within the sector. The programme supports the Africa Mining Vision put forward in 2009 by the African Union to harness the continent’s mineral wealth to alleviate poverty.
The role of the ACP Group of States was crucial in the design of the programme. “This programme may not have existed were it not for having the perspective of the development recipients themselves in designing it,” said Dr Franks. “It meant the recipients are choosing topics that will lead to better outcomes for their own development. The first thing they wanted to do was this work on low value mining, as these commodities lead to structural transformation, industrialization, and would lead to their own development.”
Now half way through its three-year span, the programme operates at both a regional policy level and at national level, with 40 ACP countries participating. Six of these are receiving in-depth support – Uganda, Guinea, Zambia, Cameroon, Jamaica and Fiji. Each has a coordinator working hand in hand with the programme’s technical advisors, addressing challenges such as:
- an uncertain legal and regulatory environment
- a lack of publicly available geological data, which exacerbates wasteful exploration and puts off investors
- inadequate oversight of environmental, social, health and safety issues
- weak or non-existent technical extension services such as skills training, capacity building, access to technology, finance, appropriate equipment, investment information and markets
Enabling Women in Mining – Access to Finance
The programme pays particular attention to the needs of women in the sector, who face additional legal and practical barriers as entrepreneurs. For instance, in Kenya, despite women owning 48% of micro and small enterprises, they access only 7% of credit. The situation is similar in Uganda where women own 38% of all registered enterprises but access only 9% of formal finance. “It is important to ensure the voices of women in this sector are heard and they are at the table to make decisions,” said Caroline Ngonze, Programme Specialist at UNDP. “Because we all know that if you are not part of the discussion at the table, you are probably on the menu!”
One of the key challenges identified by women was their countries’ legal and policy frameworks, which hinder their access to finance. “For example the family code in Niger requires a husband’s permission for a woman to open and deposit money in an account; and DRC’s family code, which was recently repealed in June 2016, had the same barriers. Women could not sign contracts or agreements, or open bank accounts, without authorization from a husband,” said Ngonze.
Women’s access to finance is often further hindered by lack of technical know-how, according to Ngonze. “Many women indicated that they didn’t know how to do feasibility studies, put together a bankable project with an environmental impact assessment and geo-data reserves, so that became a huge barrier – as formal microfinance institutions won’t lend you money without this standard set of documents.”
The women also lacked what Ngonze describes as technical ‘know-who’ – who to approach to access financing. And these two problems were frequently compounded by women’s lack of substantive collateral, such as land, property or infrastructure.
The programme supports these women with technical training and inventive ways around the problem of collateral. “If they don’t have collateral, they can use geo-data,” said Ngonze. One major component of the programme is training participants from geological surveyors, academia and other private sector Geographic Information System (GIS) entities to perform geo-mapping so they can create an inventory of reserves under the land. “This kind of geo-data will be pivotal for women in business to say, this is the geo-data for my land, there are reserves, and once it is extracted I will be able to pay back the loans. This is one innovative way the programme is assisting women in this sector to access financing,” said Ngonze.
Women in the sector also proposed that previous credit history be used when applying for a loan, for example their gas and electricity or mobile phone bills to show a pattern of repayment. “These are some of the ingenious avenues being used currently, for example in Rwanda with credit reference bureaus,” said Ngonze.
Regional knowledge exchange
At the regional level, an important part of the programme is knowledge exchange through workshops and field trips. “As there hasn’t been a lot of development community focus in the past, the best practices come from the people involved in the sector,” said Dr Franks.
At a training session for quarry managers in Carrara, Italy, home of Michelangelo’s favoured marble, one participant from Madagascar came up with a potentially transformative idea. “He had a small granite quarry company, and he had an idea at our training to produce cobblestones – which are cut blocks - to construct rural roads in Madagascar,” said Dr Franks. “The unpaved roads there are not fit in the wet season to transport food, so his return to work project was to develop cobblestones to pave roads to help food security. His programme, which is ambitious and amazing, is looking for finance, and he’s already demonstrating the proof of concept by self-financing a number of kilometers of road.”
A similar project in Ethiopia employed half a million people to pave thousands of kilometers of road with cobblestones. “It started when a mayor from Ethiopia traveled to Europe and saw many cities are built on cobblestones, and thought - why not bring that back,” said Dr Franks. And the idea is spreading further: “When we went to the Caribbean and held workshops there, it was the first time many stakeholders had thought to use cobblestones as a road building material. So we’re sharing the ideas people had and capturing them in knowledge products, so we have them available for wider use.”
For more information about the programme, visit developmentminerals.org.