The artisanal and small-scale gold mining (ASGM) sector is severely undercapitalized. The amount of money invested in each unit of gold produced by artisanal and small-scale miners is vastly lower than that available for the industrial formal gold mining sector. While ASGM exploration and production have typically been seen as risky investments, the investment landscape is changing, due in part to increasing consumer and corporate demand for responsibly mined artisanal gold.
Investment Basics for ASGM
To unlock the capital needed for ASGM to become environmentally and socially responsible, the planetGOLD programme is providing more accurate information to financial service providers and investors about this opportunity, while also helping miners to develop and present information in a manner that appeals to investors.
Unlocking capital flows will first require a solid business case that satisfies the requirements of both the investor and those working in ASGM. Developing this business case means understanding the different needs of the investor and the miners, and creating opportunities that address them.
The Opportunity for Impact at Scale
Artisanal and small-scale mining accounts for 20 percent of the global supply of gold and currently generates a combined $25-30 billion each year. With the price and demand for gold consistently rising, investment in the right technologies and training can boost productivity, provide a model for investment at scale, and mitigate environmental and social risks in the gold supply chain—all while significantly reducing global mercury emissions. By capitalizing on improved ASGM practices, investors also have an opportunity to align themselves with the UN’s Sustainable Development Goals, helping to alleviate poverty and environmental degradation in rural economies.
The wide array of investor and finance mechanisms that may be available to small- scale miners includes:
- Microfinance Institutions
- Commercial Banks
- National Development Banks
- Socially Responsible Investments (SRI)
- Retail Investors
- Private Equity
- Industry Partners
- Funds/Fund Managers
- Institutional Investors