According to our estimates, the average values of social and environmental damage generated by illegal artisanal and small-scale gold mining in Brazil range from USD 182,000 to almost USD 390,000 per kilo of gold extracted, which represents more than double the ore’s market value. This sum was obtained by the Mining Impacts Calculator, an online tool that estimates the impacts, in monetary values, of artisanal small-scale gold mining. The tool was developed in 2021 by the Conservation Strategy Fund in partnership with the Federal Public Prosecutors of Brazil.
The valuation takes into account the damage generated, using a series of parameters to set a generalizable value transfer formula:
- By deforestation caused by the construction of infrastructure and excavation in the mined areas. We analyze the loss of ecosystem services such as: direct land-use (timber and non-timber forest products), bioprospecting, carbon storage, water services, species habitat, and recreation.
- By siltation in rivers and the worsening of water quality. We use the restoration cost method to assess values related to land degradation and take into consideration two components: filling the pit; and the removal of the sediments from rivers as a consequence of excavation.
- By contamination of the environment by mercury and its consequences on human health. We connect several points in the literature based on hypotheses regarding average use of mercury per kilogram of gold mined, mercury dispersion in water, its transformation into methylmercury, absorption by fish and humans, and the consequences of contamination are evaluated by dose-response functions relating to mercury concentrations in hair and the development of the following health outcomes.
The formula relates input variables, such as mining size, pit depth, gold extraction productivity, and other context variables, such as population density, per capita income, average daily fish consumption, and transportation cost for restoration, to monetary average output impact values.
In April, we released an unprecedented sum, obtained with the help of the Calculator and combining three different studies in a course by CSF, which estimates the socioeconomic damages of the activity during the year 2020, specifically in three regions of indigenous occupation: the Yanomami Indigenous Land, the Tapajós River Basin, where the Munduruku Indigenous Land is located, and the Madeira River. The result was more than USD 1.02 billion in annual losses, which can be attributed mainly to health problems caused by mercury.
One of these studies, already finished and published in the International Journal of Environmental Research and Public Health, revealed that in the Yanomami territory alone 5 km² were exploited by mining in 2020, spilling approximately 32 kg of mercury into rivers. That will affect up to 44,000 people in the coming years. It is estimated that, of these, 307 people might develop hypertension problems, 85 might have acute myocardial infarction and four children might be born with cognitive impairment.
Uses of the Calculator
We believe the Mining Impacts Calculator is an adjustable methodology that can support other countries dealing with ASGM, apart from Brazil. The tool is now being adapted for Peru and Colombia as part of the Amazon Sustainable Landscapes Program - World Bank Group. We also just won as a finalist the Artisanal Mining Grand Challenge, a prize from Conservation X Labs to adapt it for Ecuador.
And the benefits of the Calculator use are several. Firstly, mirroring the Brazilian experience, it can be used as a methodology to properly assess the financial penalties for individuals and companies that committed infractions related to illegal mining activities, helping government agencies to propose compensations and set penalties. That could result in:
- Reduction of arbitrariness in valuation;
- Increase of the probability of holding offenders accountable for their actions;
- Discouragement of the expansion of new illegal gold mining;
- Reduction of negative environmental and health effects of gold mining on communities and miners.
Besides, the Calculator can support agencies’ claims for additional resources for conservation, command and control. With it, it is possible to estimate the cost of governmental inaction: how much should the government invest to prevent social losses before they occur?
Finally, and maybe most importantly, this methodology can support regulatory changes towards extraction techniques with no mercury, by showing the costs of using mercury on human lives, an irreparable loss.