Formalising and Enhancing Performance of Artisanal and Small-Scale Gold Mining in Ethiopia

Final report ETH-21156 July 2022
Formalising and
enhancing
performance of
artisanal and small-
scale gold mining in
Ethiopia
Hailu Elias
Atlaw Alemu
A Base Line Study
On
“FORMALISING AND ENHANCING PERFORMANCE OF ARTISANAL AND SMALL-SCALE
GOLD MINING IN ETHIOPIA”
For
The Ministry of Mines of FDRE
July, 2022
Addis Ababa
Acknowledgement
This baseline study was conducted with the approval and involvement of the Ministry of Mines and with
financial support of IGC (International Growth Center) and Ministry of Mines. It is a sequel to the scoping
study undertaken by IGC in 2019. The main report on the baseline study was prepared by a study team
composed of seven researchers and a programmer, who was also the data manger. This report is an abridged
form of the main report produced by the seven researchers in a team.
1. INTRODUCTION ................................................................................................................................... 1
1.1. BACKGROUND AND OBJECTIVE ........................................................................................................ 1
1.2. DATA AND METHODS........................................................................................................................ 3
2. SURVEY FINDINGS ............................................................................................................................. 7
2.1. PROFILE OF SAMPLED GOLD MINERS ................................................................................................ 7
2.2. TECHNOLOGICAL ASPECT OF GOLD MINING ....................................................................................... 8
2.3. ECONOMIC ASPECT OF ARTISANAL AND SMALL SCALE GOLD MINING AND PROCESSING .................... 16
2.3.1 Production ............................................................................................................................. 16
2.3.2 Marketing and sales of gold ................................................................................................. 23
2.4 LEGAL, INSTITUTIONAL AND ORGANIZATIONAL ASPECTS OF GOLD MINING, PROCESSING AND
MARKETING ............................................................................................................................................... 29
2.4.1 Perceptions of miners on existing rules ............................................................................. 29
2.4.2 Institutional and organizational aspects of gold mining, processing and marketing ... 29
2.5 SOCIAL AND ENVIRONMENTAL ASPECTS OF GOLD MINING AND PROCESSING .................................... 31
2.5.1 Gender, child labor and community issues in gold mining .............................................. 32
2.5.2 Environmental aspects of gold mining ............................................................................... 33
2.5.3 Health and safety aspects of gold mining, processing and marketing ........................... 34
3. SUMMARY AND THE WAY FORWARD ........................................................................................... 36
REFERENCES ............................................................................................................................................ 38
i
1. INTRODUCTION
1.1. Background and Objective

Defining Artisanal and small-scale mining (ASM) has remained a point of difference as
Hentschel et al (2003) admit, by then, that common definition of ASM had yet to be
established. In some countries ‘artisanal mining’ is purely manual and on a very small
scale, and ‘small-scale mining’ has some mechanization. In some countries, small-scale
mining is differentiated from artisanal mining by the presence of permanent, fixed
installations. Following Hentschel et al (2003), Artisanal and small-scale mining refers to
“mining by individuals, groups, families or cooperatives with minimal or no mechanization,
often in the informal sector of the market”. In the Ethiopian context, this definition fits the
reality of ASM.
In the report by Hentschel et al (2003), it is generalized that artisanal and small-scale

mining (ASM) is largely a poverty-driven activity in many developing countries, where
about 13 million people in about 30 countries are directly engaged, while 80 to 100 million
people are indirectly depending on ASM. Largely women and children are the participants
in this sector. The report further acknowledges that small-scale mining negatively affects
the environment and can have detrimental consequences to health and safety of workers
and surrounding communities, due mainly to the poor practices in mining and processing.
Because of the fact that Artisanal and small-scale mining is a marginalized activity with
poor regulations, there can be very serious disputes with communities, government
agencies and large-scale mining interests. “Conflicts over access and land-use can be a
particular issue in areas where indigenous or tribal peoples have traditional land rights or
land-use patterns”(ibid). Child labor, access to health care and education are the other
problems commonly associated with ASM. Artisanal and small-scale mining typical face
problems to geology, law, finance, marketing, technology, human resources, and
organization.
Several sub-Saharan Africa economies (e.g., Mozambique, Liberia, Sierra Leone,

Rwanda etc.) are increasingly relying on the mining sector with varying degree of
contribution to GDP. The sector is becoming an important source of foreign exchange
though evidences show that the sector is often disconnected from the wider economy
(e.g., M’cleod, 2019; Biryabarema, 2019). A large proportion of mineral exports from the
region is in raw/unprocessed form with small share in semi-processed concentrated form.
While the ASM sector in these countries is very much underdeveloped (i.e., a semi-skilled
workforce, limited access to infrastructure, and insufficient capital investment, almost
exclusively relying on low-tech, labour-intensive mineral extraction and processing), the
sub-sector provides much needed source of income to otherwise-jobless people. A
number of studies (e.g., Childs, 2014; Hilson et al., 2018; Mutemeri et al., 2016;
Sauerwein, 2020; Seccatore et al., 2014; Spiegel, 2015) show that ASM could be the
most important rural off-farm activity in the region with farming households engaging in
ASM simultaneously with subsistence agriculture.
1
A study undertaken by Ethiopian Extractive Industries Transparency Initiative (EEITI,
2015) with an objective of analyzing the “various aspects of artisanal mining operations
in Ethiopia, its economic value, social contribution and social impacts” has come up with
findings that the contribution to the overall economy or GDP of artisanal mining is low;
artisanal miners are at the peak of their productive/reproductive age; migrant miners from
other regions account for 25% to 30% in SNNPR and Oromia regions while in Tigray,
Amhara and Benishangul Gumuz regions migrants account for low percentage and they
are from neighboring woredas; conflicts among the artisanal mining communities are rare
while conflicts between artisanal miners and private companies seems serious where the
conflicts are due to overlapping of mining areas arising from poor licensing and area
delineation problems; mining is the backbone of the miners’ livelihood and it is a difficult
and risky occupation with no guarantee of quick returns; artisanal mining communities
seemed disadvantaged in physical infrastructure facilities compared to other non-mining
areas; the legal enforcement of proclamations is weak at grass-roots level; nearly all
miners of gold and gemstone use manual tools and surface mines seem to be exhausted
everywhere in the country and hence extracting rocks deep in the earth has become
important; the total population involved in gold mining (legal and illegal) is estimated at
1.24 million producing 18000kg annually where the largest production is Oromia followed
by SNNPR; the annual income per miner was birr 8000 to 10000; marketed gold through
formal (legal) channel is estimated at only 39% of the total production; nearly all miners
have little environmental knowledge on the harmful effect of mining; political commitment
with is required to give attention to the sector.
With the recognition that a sector-wide strategy is necessary to define a “Roadmap that
sketches the vision, objectives and key activities that need to be prioritized for
implementation”, Ministry of Mines and Power (MOMP) and SUMM-CIRDI 1(2019)
produced a document that “presents the roadmap which lays out the framework for the
Artisanal Special Small-Scale Mining (ASSM) strategy’. The Priority thematic areas were
identified to be Governance, ASSM business, Economic linkages, Social, Environmental,
Health and Safety (SEHS). Governance aspect incorporated issues related to laws and
regulations, and related issues of the sector. ASSM business aspect includes issues
related to labor skill, capital and finance, mining technology, management and technical
support in relation to ASS mining. Economic linkages aspect refers to market linkages,
value addition, infrastructure and related issues. SEHS issues focus on the impacts of
ASSM on standards and technologies affecting environment, the society, operators’
health and safety.
The mining sector in Ethiopia, in general, has not been harnessed. Large scale and small
mining alike are underdeveloped. The share of this industry in GDP remained less than
one percent in recent years. Artisanal and small-scale mining (ASM) dominates the
mining sector where more than 1.2 million rural communities and urban youth are
employed (CIRDI-SUMM, 2019). In Ethiopia, as it is in the whole world, artisanal and
small-scale mining is an industry of the poor where a large number of unskilled and semi-
skilled labor force find refuge in developing countries. It is an informal engagement which
1
Supporting the Ministry of Mines (SUMM), Canadian International Resources and Development Institute (CIRDI)
2
has not been properly studied and recorded. The informality is manifested by working
without license, without legal protection and without support of the government on the
one hand and not complying with regulations in fiscal, mining, and environmental matters.
As the sector has large untapped potential to grow and contribute to output and
employment, the government has given attention to the development and formalization
of this sub-sector through the then Ministry of Mines and Petroleum (MoMP). The
development and formalization of this sector requires adequate information about the
sector. Currently the available information is inadequate and a scoping study that
highlights what information has been generated so far and what is not yet known has
been undertaken recently (Keili et al, 2021). The scoping study aimed at documenting
existing information and data on ASMs in Ethiopia and further developed a framework for
a more comprehensive survey of the sub-sector. The content of the framework formulated
by the scoping study aimed at documenting the current situation and justifying the
possible interventions to realize the policy objectives. The generic areas identified were
synthesized from previous studies and incorporated technical aspect, economic aspect,
legal aspect, institutional and organizational aspect, environmental aspect, health and
safety aspect, and community aspect.
As the sector has large untapped potential to grow and to contribute to output and
employment, the government through the Ministry of Mines (MoM) has given attention to
the development and formalization of this sub-sector. The development and formalization
of this sector requires adequate information about the sector. As suggested by the
scoping study that developed a framework for a more comprehensive survey of the sub-
sector, this report is an account of the findings of a baseline study as a sequel to the
scoping study and attempts to identify the various factors that shackled the development
of ASM to assist the eventual resolution of the gaps.
The main objective of the study is identification of the Technical, Legal, Economic,
Institutional, and organizational, Environmental, Health and safety, Gender, Child labor
and Community aspects of the sector with the respective measures of addressing the
knowledge and informational gaps and to indicate the intervention areas.
1.2. Data and methods

A base line study was conducted, in consultation with the Ministry of Mines, on artisanal
and small scale gold miners and additional qualitative information was also generated
from gold sellers and government organs at regional, zonal and woreda levels from gold
producing areas. Gold producing areas were categorized in two groups of woredas:
intervention woredas and control woredas. Sharkole woreda from Benishangul Gumuz,
Dima woreda from Gambella, Oddo Shakiso woreda from Oromia and Bero woreda from
South Western region, fall in the first group while Adola Redde in Orimia, Menge woreda
in Benishangul Gumuz, Abobo woreda from Gambella and Gasana kebele from Bero
woreda in South West region fall in the second or in the control group. The four woredas
selected for intervention by government were those with relatively higher potential of
production of gold and favorites for government intervention to enhance the performance
of the sectors in various aspects.
3
The Ministry provided lists of all gold miners, except from Benishangul Gumuz region
where there are no lists of individual gold miners from this region. In the list two types of
major groups of gold miners were identified: organized artisanal and small-scale gold
miners including special small scale gold miners and individual artisanal gold miners who
are licensed and unlicensed. The first group (organized gold miners) is registered or
licensed gold producers with fixed/specific areas of operations provided by the
government and they have adopted a higher level of technologies. The second groups of
gold miners are individual miners who are mostly unlicensed and they do not have fixed
areas to mine gold, indicating that they mine gold in open spaces where gold deposits
are expected to be available. These types of gold miners rarely use improved gold mining
and processing technologies. Among the organized and licensed gold miners about 240
were selected from intervention woredas and 115 from control woredas in these four
major gold producing regions. In addition, 600 unlicensed individual gold miners were
sampled from intervention woredas.
Once all gold miners (artisanal and small scale) are identified, the study made complete
enumeration or census of all the organized or group gold miners including organized
traditional gold miners, small scale gold miners and special small scale gold miners from
all the selected four regional states (Benishangul Gumuz, Gambella, Oromia and South
West region). From the second group, the study selected sample of individual gold miners
based on the sample size determination formula as follows.
𝑛
𝑠𝑎𝑚𝑝𝑙𝑒 𝑠𝑖𝑧𝑒 = 𝑛 ,
1+
𝑁
𝑍 2 𝑝(1−𝑃)
Where, 𝑛 = N = population size, e = Margin of error (percentage in decimal
𝑒2
form) , z = z-score(the number of standard deviations a given proportion is away from
the mean and P is the proportion of the population with the given characteristics(
expressed in decimal form of usually 0.5.
Once the sample size is determined, the total individual gold miners are distributed across
the four regional states based on the total population of individual gold miners (see the
above table). Finally, individual gold miners were selected from target kebeles in selected
woredas using simple random sampling technique where the random number is
generated using the RAND formula in excel. Thus, the study applied both proportional
and random sampling techniques. Distribution of organized and individual gold miners in
intervention woredas by region is presented in table 1 below.
Table 1: distribution of population of organized and individual gold miners by regions

Regions Planned sample from Actual sample from Percentage of
intervention woredas intervention woredas actual to
planned
Organized Individua Total Organize Individual Total Total
l d
Gambella 35 148 183 36 164 182 99.5
Benishangul 28 107 135 28 108 136 100.7
Gumuz
Oromia 155 6 161 113 3 116 72.0
4
South west 22 99 121 18 99 117 96.7
Ethiopia
Total 240 360 600 195 356 551 91.8
After individual and organized gold miners were selected, 12 experienced and well-
trained data collectors were deployed to collect the data under the close supervision of
four supervisors. The data collection was done using face-to-face data collection method.
In order to better control quality of data, the data collection was done using Computer
Assisted Personal Interview (CAPI) or tablets programmed with CSPro software and the
collected data were frequently synchronized to the center where data programmer
controls the quality and consistency of the data. The team of researchers and the data
manager had provided five days trainings for data collectors and supervisors using the
CAPI on how to use the electronic devices for data collection before deployment. The
baseline survey was conducted in April-May period in 2022.
The qualitative data analysis technique was used to narrate different topics and cases
and stories of gold miners and clearly mapping the challenges and constraints related to
production, technologies, legal aspects, market aspects, institutional aspects,
environmental and social aspects that the gold miners faced in the selected regions and
woredas.
The quantitative data analysis includes descriptive statistics on individual characteristics

of gold miners, production and productivity, types and nature of available technologies,
etc., and the causal effect of accessing gold mining machines on a given outcome variable
where doubly Robust (DR) technique was employed. To estimate the causal effect of
accessing gold mining machines on a given outcome variable, we employ the Doubly
Robust (DR) technique. Estimating the causal relationship between a given ‘treatment’
and a given outcome variable using observational data is complicated by potential
confounders that could be related to both potential outcome variables (Yi) and treatment
exposure (Ti)2. Number of methods have been put forward to control for these potential
2
Let Ti ∈ [0, 1] be treatment indicator variable where T=1, treated and T=0, controls. Let Yi(t) represent potential
outcome variable and Xi potential explanatory variables. Given a model specification, the latent outcome variable
Y*i can be linked to an observable dependent variable Yi through 𝑌∗𝑖 = 𝛽𝑖 𝑋 + 𝜀𝑖 and
𝑖
1 𝑖𝑓 𝑦 ∗𝑖 > 0
𝑦𝑖 = {
0 𝑜𝑡ℎ𝑒𝑟𝑤𝑖𝑠𝑒
where 𝑋𝑖 represents a vector of explanatory variables, 𝛽𝑖 stands for vector of coefficients, while 𝜀𝑖 is a stochastic
disturbance term. We are interested to identify the mean effects of the treatment (in our case, access to
technology or not) on a host of outcome variables Y(Ti). Given Y (1) be outcome variable when T=1 and Y(0) be
outcome variable when T=0, the average treatment effect of the treatment on the treated (ATT) is: τATE
=E(τ)=E[Y(1) – Y(0)] and following Cunguara and Darnhofer (2011) can be estimated as τATE =E{ Y1i - Y0i | Ti =1}=
E|E{ Y1i - Y0i| Ti =1, p(Xi )}] = E|E{Y1i | Ti =1, p(Xi )}-E{ Y0i| Ti =0, p(Xi )}| Ti =1]
τATE =E(τ)=E[Y(1) – Y(0)] where Y1 and Y0 are values of the outcome variable of interest for CS recipients and non-
recipients, respectively; i refers to the households. Accordingly, τATE (i.e., the differences in the outcomes of the
treated and of the control group) can be said is due to access to CS (Caliendo and Kopeinig, 2008).
5
confounders. Most of these methods try to do so by creating pseudo-experimental
settings. The goal is to create a setting where among subjects sharing same explanatory
variables, the treatment exposure is independent of outcome variable conditional on the
explanatory variables (Xi). Regression adjustment estimation and inverse propensity
score weighting are among the most commonly adopted methods. Given a properly
specified model, the regression adjustment (RA) technique can adequately identify the
causal effect of a given treatment by comparing the outcome variable for treated
individuals with similar observable covariates as that of untreated individuals. For
example, a RA model of the following form could be estimated: 𝑌𝑖 = 𝛽0 + 𝛽1 𝑇1 + 𝛽𝑖 𝑋𝑖 +
𝜀𝑖 where Yi is the outcome variable (in our case, yield), 𝛽0 is a constant, 𝛽1 is the coefficient
of 𝑇1 (in our case “use of machinery”), 𝑋𝑖 stand for a host of other controls while 𝛽𝑖 are the
corresponding coefficients. 𝜀𝑖 is idiosyncratic error term. On the other hand, the inverse
probability weighting (IPW) technique relies on a propensity score (i.e., the conditional
probability of receiving a given treatment) to estimate the causal effect of the treatment3.
Both of these approaches rely on some restrictive assumptions. While RA requires a
correctly specified model, the IPW requires a correct estimation of the propensity score.
Given that both approaches assume unmeasured confounders, if there is misspecification
of the model or improper estimation of the propensity score, they will fail to sufficiently
control for confounders (Chunhao et al., 2013).
The doubly robust technique, on the other hand, leads to a more precise inference by
offering protection against some of the potentially incorrect assumptions of these
methods. The DR estimator, by combining the features of RA and IPW, is robust to
misspecification of either the outcome equation or the propensity score (the treatment
equation). Hence, relying on the DR estimator, one can estimate the ATT
(𝑖. 𝑒. , 𝐸[(𝑌1𝑖 − 𝑌0𝑖 )|𝑇 = 1) as follows:
𝑛 𝑛
𝑇𝑖 𝑌𝑖 ̂}
{𝑇𝑖 −𝑒(𝑋𝑖 𝛽) (1 − 𝑇𝑖 )𝑌𝑖 ̂}
{𝑇𝑖 −𝑒(𝑋𝑖 𝛽)
𝛥̂𝐷𝑅 = 𝑛−1 ∑[ − 𝑚1 (𝑋𝑖 𝛼̂1 )] − 𝑛−1 ∑[ − 𝑚0 (𝑋𝑖 𝛼̂0 )]
̂
𝑒(𝑋𝑖 𝛽) ̂
𝑒(𝑋𝑖 𝛽) ̂
1 − 𝑒(𝑋𝑖 𝛽) ̂
1 − 𝑒(𝑋𝑖 𝛽)
𝑖=1 𝑖=1
̂ is the postulated model for the true propensity score 𝑒(𝑋𝑖 ) = 𝐸(𝑇|𝑋) fitted
where 𝑒(𝑋𝑖 𝛽)
through, for example, a logistic regression, and 𝑚1 (𝑋𝑖 𝛼̂1 ) and 𝑚0 (𝑋𝑖 𝛼̂0 ) are postulated
models for the true regressions fitted through least squares E[Y|T=1,X] and E[Y|T=0,X].
In addition, to increase efficiency, following the approach by Linden (2017) and
Rosenbaum and Rubin (1983), we use a propensity score stratified into 5 quintiles.
According to Rosenbaum & Rubin (1983), stratifying the propensity score into quintiles
could reduce bias by about 90%.
3
Given the exogenous explanatory variables Xi, propensity score can be estimated as 𝑃(𝑥) = Pr (𝑇 = 𝑡|𝑋 =
𝑥) and the corresponding conditional outcome variable as μt (x) = E[Y|T=t, X=x]. However, for PSM to work,
unconfoundedness (i.e., E[Y(t)|T, X] =E[Y(t)|X]) and overlap assumptions should be maintained. An Inverse
Probability Weighting (IPW) assigns a weight of 1/propensity score for the treated individuals and a weight of 1/(1
- propensity score) for comparison individuals. 𝑃(𝑥) = Pr (𝑇 = 𝑡|𝑋 = 𝑥) (Angrist and Pischke, 2009, pp. 213–216).
6
2. Survey findings
2.1. Profile of sampled gold miners
Most of the respondents (64%) were individual miners while the rest were more organized
miners (19% MSE, 5% cooperatives, and 12% SSSM). Overall, 76% of miners are males.
Male composition of Individual Miners were (94%), Cooperatives (85%), SSSM (79%),
and MSE (71%). Across all miner types, members with 26 – 35 age group were the most
important. This age group constitute for 44% of individual miners, 65% of MSE, 52% of
Cooperatives, and 60% of SSSM. Younger members (with age group of 18-25 years)
seem to have lesser role in all miner types. The exception is individual miners where
one-third is within this age group. On average, three-quarters of miners are married. While
almost all of the more organized miners have access to mobile phone, only about 55% of
individual miners have access to mobile phone. Regarding the education level of
individual miners (for which we have data), the majority (78%) had a maximum of 8 years
of schooling with 52% having a maximum of 6 years of schooling. On average, about one-
third of miners migrated from other areas.Nearly 48% of the respondents were followers
of the Protestant religion while about 33% of the respondents are followers of the
Ethiopian Orthodox Christian religion and the Muslim constituted about 20% of the
respondents. Overall, gold miners interviewed have about 6.8 years of experience4. In
relative terms, with about 9.2 years of experience, cooperative miners stayed longer in
gold mining business as compared to individual (7.9 years), SSSM (7.7 years), and MSE
(2 years) (Table 2).
Table 2: Background information of miners (in %) by types of miners

Type of miner unit Individual MSE member Cooperative SSSM Overall
members
Survey cover % 64.6 18.5 4.5 12.3 100.0
Male (organized) Share (%) 94.1 71.2 84.6 78.9 75.6
Average age of members
18-25 Share (%) 30.1 4.9 1.5 3.1
26 - 35 share 43.8 64.7 52.0 60.3 61.5
36 - 45 share 18.8 28.4 40.0 30.9 30.8
46 - 60 share 7.3 2.0 8.0 7.4 4.6
Married members share 60.7 80.8 78.1 60.3 73.3
Position of representative (organized)
Chairman % 64.7 68.0 89.7 74.0
Deputy chairman % 19.6 4.0 2.9 11.7
Secretary % 4.9 8.0 3.6
Accountant % 3.9 4.0 2.6
Cashier % 2.0 8.0 1.5 2.6
Other representatives % 4.9 8.0 5.9 5.6
Total % 100.0 100.0 100.0 100.0
Own phone (of representative for % 54.8 100.0 100.0 98.5 70.6
organized)
Religion (of representative organized)
Orthodox Tewahido % 36.0 21.6 52.0 38.2 31.3
Protestant % 20.2 69.6 12.0 27.9 47.7
Catholic % 0.6
Muslim % 39.6 7.8 36.0 32.4 20.0
Traditional faith % 2.3 1.0 1.5 1.0
Other (specify) % 1.4
4
For the organized miners, we considered experience of the representative during interview
7
Total % 100.0 100.0 100.0 100.0 100.0
Education level (years of schooling)
Illiterate (0) % 11.2
Elementary (1-6 ) % 41.0
Junior-High (7-8 ) % 25.8
High school (9-12) % 21.4
Tertiary (>12) % 0.6
Total % 100.0
Experience in gold mining years 7.9 2.0 9.2 7.7 6.8
Share of migrant members (for % 9.8 50.0 60.6 32.6
organized)
Migration status of representative share migrants 8.8 28.0 63.2 30.3
Source: survey data, March – April, 2022
2.2. Technological aspect of gold mining

The extraction of gold from the ore involves digging and excavating the land (mining),
crushing and separation processes of the gold from ore (crushed material processing).
From the beginning and before the assessment, it was generally assumed that ASM
utilizes rudimentary mining and processing equipment and methods; that they do not get
trainings on improved mining and processing methods and methods for recovery of
minerals from mining wastes; that they do not have adequate information on various types
of mining and processing equipment; that there are no trainings on assessment of ore
reserves and grades; that they do not have the capacity to attain market demanded
quality, they did not have access to the right quality test methods and equipment. The
assessment in the survey was to investigate the status of these technological aspects of
the miners and the extent to which various types of tools and equipment were used in
gold mining and processing in Ethiopia and the extent of the technological training and
awareness of miners on state of the art-technologies.
Shovel, iron bar, batia are the traditional tools that are extensively employed by all miner
groups while the use of the other traditional tools considerably varies across the mining
groups. Only about a third of the miners stated to have used the relatively modern mining
machines even though there is variation across the mining groups. MSE and SSSM
groups seem to use more of modern machines as reported by 83% and 79% of the
respondents respectively. In contrast, individual miners (10%) and cooperatives (32%)
seem to rely on modern machines. Interestingly, majority of the mining groups including
individual and cooperative groups reported to have information on the existing and the
state-of-the-art processing, mining machines, and quality testing methods and
equipment.
Table 3: Tools and mining machines in gold mining

Type of miner unit Individual MSE Cooperative SSSM Overall
No of observation number 356 102 25 68 551
List the hand tools used
Shovel (Akafa) % yes 85.7 92.2 96.0 100.0 89.1
Dijino (Iron bar) % yes 90.5 90.2 96.0 55.9 86.4
Mattuck (Domma) % yes 18.3 67.7 52.0 51.5 33.0
Pulley (Bekera) % yes 36.5 8.8 76.0 27.9 32.1
Batia (Wooden/metal/Plastic) % yes 100.0 100.0 100.0 100.0 100.0
Rope % yes 69.7 12.8 92.0 54.4 58.3
Torch % yes 58.7 6.9 84.0 64.7 51.0
Local ventilation tool (traditional blower) % yes 29.8 7.8 76.0 25.0 27.2
Hammer (Medosha) % yes 24.4 24.5 64.0 32.4 27.22
8
Traditional Sluice box % yes 3.7 2.9 16.0 13.2 5.26
Sacks (madaberia) % yes 70.5 21.6 88.0 47.1 59.35
Jerycan % yes 58.7 37.3 92.0 66.2 57.17
Axe (metrebia) % yes 11.5 21.6 48.0 32.4 17.6
Bush knife( Konchera) % yes 17.4 26.5 84.0 30.9 23.77
Others (specify) % yes 6.5 1.0 40.0 13.2 7.8
Do you use mining machines in gold mining or
production? % yes 10.1 83.3 32.0 79.4 33.2
Do you have information on any of the existing and
state of the art mining machines? % yes 49.2 75.5 60.0 80.9 58.4
Do you have information on any of existing and
state of the art processing machines % yes 40.2 66.7 48.0 80.9 50.5
Do you have information on existing and state of
the art quality testing methods and equipment? % yes 98.9 65.7 80.0 76.5 89.1
Of the total sampled gold miners, only 33% use machines for gold mining while 36% use
machines for processing. Machine utilization for gold mining and processing is the least
among individual gold miners, but the highest among special small scale and SMEs (see
figure 1). Gold mining machines used by the sampled gold miners include excavator,
dump tracker, dozer, jack hammer and metal detector. Nearly all heavy machines like
excavator, dozer and dump tracker are used by organized gold miners mainly SMEs and
SSSM, whereas light machines like metal detector and jack hammer are used by
individual gold miners. The scale of operations of gold miners has implications on types
of machines to be adopted by different miners. Most SSSMs use excavators in Oromia
regional state and only very few individual miners use heavy machines for gold mining
indicating that they are using traditional tools for gold mining (see Table 4).
83.3 85.3 82.4

79.4
32 33.2 36.1
10.1 13.8 28
INDIVIDUALS SMES COOPERATIVES SSSM TOTAL

Gold mining machines (yes in %) Gold processing machines (yes in %)
Figure 1: utilization of machines/technologies in gold mining/production and processing
Table 4: utilization of gold mining machines, by types of miners and regions (share in %)
type of miners Regions
Machine type Individuals SMEs cooperatives SSSM Oromia Gambella Benishagul S.West Total
Excavator 0.3 54.9 12.0 67.7 60.3 19.2 0.7 0.0 19.2
Dump Tracker 0.3 1.0 0.0 23.5 3.5 7.7 0.0 0.0 3.3
Dozer 0.0 0.0 0.0 10.3 3.5 1.7 0.0 0.0 1.3
Metal Detector 3.9 0.0 16.0 8.8 0.0 2.8 11.8 2.6 4.4
Jack Hammer 9.6 6.9 12.0 19.1 2.6 2.8 36.0 0.0 10.3
Others 4.2 6.9 8.0 14.7 0.0 6.6 15.4 0.9 6.2
Most heavy machines used for gold mining are access through renting. For instance, over
87% of excavators used by SSSM are obtained via rental services (see table 5).
9
Table 5: if use gold mining machines, types of ownership (in percent)
Machine type Individuals SMEs cooperatives SSSM Oromia Gambella Benishagul S.West Total
Excavator
Owned 0.0 0.0 33.3 13.0 7.1 5.7 0.0 0.0 6.6
Rented 0.0 58.9 66.7 87.0 58.6 94.3 100.0 0.0 70.7
Joint Venture 100.0 41.1 0.0 0.0 34.3 0.0 0.0 0.0 22.6
Dump Tracker
Owned 100.0 0.0 0.0 25.0 25.0 28.6 0.0 0.0 27.8
Rented 0.0 100.0 0.0 75.0 75.0 71.4 0.0 0.0 72.2
Joint Venture 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Dozer
Owned 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Rented 0.0 0.0 0.0 100.0 100.0 0.0 0.0 0.0 100.0
Joint Venture 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Metal Detector
Owned 58.8 0.0 100.0 83.3 0.0 80.0 63.2 100.0 70.4
Rented 35.3 0.0 0.0 16.7 0.0 0.0 36.8 0.0 25.9
Joint Venture 5.9 0.0 0.0 0.0 0.0 20.0 0.0 0.0 3.7
Jack Hammer
Owned 93.8 100.0 100.0 41.7 0.0 38.5 100.0 100.0 78.4
Rented 6.3 0.0 0.0 58.3 0.0 61.5 0.0 0.0 21.6
Joint Venture 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
In all the sampled regional states, most of the heavy-duty mining machines are obtained
over the last five years. For instance, 40% of excavators were purchased in 2021/2022
(2014 EC), indicating that recently utilization of machines for mining activities has been
increasing. Average costs of acquiring gold mining machines various across types of
miners and regional states depending on the size, types and year of manufacturing.
Similarly, rental costs of the machines vary across types of miners and regional states
depending on the capacity of the machines, year of manufacturing of the machines. For
instance, the rental prices of excavators vary from 10,316 Birr per day for individual
miners to about 28,000 Birr for SSSM. Region wise, rental costs of all gold producing
machines are the most expensive in Gambella and the least expensive in Benishangul
Gumuz indicating high regional variation in rental costs of gold mining machines.
Other than mining tools and machinery, the use of gold processing tools and equipment
varies with the type of miners. Individual gold miners do not use modern gold processing
technologies such as modern sluice box, shaking tables, water truck, while very few use
pan wet mill (0.3%), ball mill (1.7%), Crusher (7.9%) and water pump (3.7%). None of the
organized miners use pan wet mills for processing gold. Similarly, SMEs and cooperatives
do not use shaking tables and water truck for gold processing. However, large proportion
of SMEs and SSSM employ water pump for gold processing in Shakiso woreda of Oromia
regional state (see table 8).
Table 6: share of gold miners using gold processing machines (in %)

Type of miners Regions
Processing Individuals SMEs Cooperatives SSSM Oromia Gambella Benish..Gumuz South West Total
machines
Ball Mill 1.7 0.0 12.0 7.4 1.7 1.1 7.4 0.0 2.5
Pan wet mill 0.3 0.0 0.0 0.0 0.0 0.0 0.7 0.0 0.2
Crusher 7.9 8.8 8.0 13.2 7.8 1.7 26.5 0.0 8.7
Water pump 3.7 76.5 12.0 72.1 81.9 25.3 1.5 0.0 26.0
10
Modern Sluice box 0.0 0.0 4.0 52.9 1.7 19.2 0.0 0.0 6.7
Shaking table 0.0 0.0 0.0 2.9 1.7 0.0 0.0 0.0 0.4
Water truck 0.0 0.0 0.0 1.5 0.0 0.0 0.7 0.0 0.2
Type of ownership of gold processing machines varies across the machine types, miner
types and location of the miners. Most ball mills are owned by the gold miners mainly in
Gambella and Benishangul Gumuz. Similarly, most water pump and modern sluice box
are owned by gold mining cooperatives and SSSMs. However, most crushers are rented
across types of miners and regional states due to high costs of acquiring it (see table 9).
Table 7: Ownership or rental of gold processing machines (in percent)

Processing Individuals SMEs cooperatives SSSM Oromia Gambella Benishagul S.West Total
machines
Ball Mill
Owned 85.7 . 66.7 80.0 . 100.0 81.8 . 80.0
Rented 14.3 . 33.3 20.0 50.0 0.0 18.2 . 20.0
Pan wet mill
Owned . . 100.0 50.0 . . 50.0
Rented 100.0 . . 50.0 . . 50.0
Crusher
Owned 6.9 0.0 0.0 44.4 22.22 33.33 8.11 . 12.24
Rented 86.2 100.0 100.0 55.6 77.78 0 91.89 . 83.67
Joint Venture 6.9 0.0 0.0 0.0 0 66.67 0 . 4.08
Water pump
Owned 69.23 43.59 100 96 51.58 95.65 33.33 . 65.28
Rented 15.38 55.13 0 4 47.37 0 66.67 . 32.64
Joint Venture 15.38 1.28 0 0 1.05 4.35 . . 2.08
Modern Sluice
box
Owned . . 100.0 100.0 100.0 100.0 . . 100.0
Shaking table
Owned 50.0 50.0 50.0
Rented 50.0 50.0 50.0
Water truck
Rented 100 100 . 100
Costs of acquiring modern gold processing machines vary by type of machines and
across miners and regional states. For instance, cost of water pump varies from about
20,450 Birr for individual miners to over 550,000 Birr for SSSM where such high variation
is mainly due to the capacity of water pump. Similarly, there are variations of costs of
acquiring ball mills and modern sluice box. Regional variations for costs of acquiring gold
processing machines are also significant for most gold processing machines (see table
10).
Table 8: Cost of acquiring gold processing machines

Processing Individual SMEs cooperatives SSSM Oromia Gambella Benishagu Total
machines s l
Ball Mill 213,583.3 . 320,000.0 288,000.0 2,000.0 3,250.0 340,555.6 256,125.0
Crusher 237,650.0 . . 356,250.0 287,500.0 183,533.3 416,666.7 296,950.0
Water pump 20,454.6 33,585.7 494,000.0 550,112.5 80,678.0 548,630.4 17,000.0 301,937.1
Modern Sluice box . . 600,000.0 957,685.2 208,500.0 990,276.2 . 948,018.1
Shaking table . . . 100,000.0 100,000.0 . . 100,000.0
11
The daily rental costs of gold processing machines across gold miners and regional states
differ. For instance, daily rental price of water pump varies from 350 Birr for individual
miners to about 2000 Birr for SSSM due to differences in capacity of water pumps as
SSSM needs large capacity pumper.
Nearly for all types of producers, the proportions of miners who are aware of the best
technologies outweigh those that have actually used them. For the MSE miners, the
proportion of technology users is greater than those aware of the best technologies (see
figure 2). These groups of miners use some form of technology and need to be advised
on the best mining technologies to improve effectiveness.
83.3 79.4 80.9

75.5
60.0
49.2
32.0
10.1
Individual miner Coop Member MSE Member Special Small Scale
Percentage of miners using machine in gold mining or production

Information on the existing and state of the art mining machines
.
Figure 2: Machine usage and information on machine availability by type of miners (%)
We observe huge disparity among producers with respect to their demand for technology.
Micro and small enterprises show an exceptionally high expressed demand for excavator
(85%) followed by demand for crusher (11%) while 45% of the cooperatives prefer access
to ball mill followed by excavator (25%). Individual miners demanded mainly three
machines: crusher (21%), excavator (18%) and metal detector (15%).
Individual Miner MSE Member Cooperative Member Special Small Scale Member
85.29
45.83
34.33
22.39
21.71
17.76
20.9
19.4
25
11.76
14.8
12.5
9.21
8.33
Ball Mill Pan Wet Mill Crusher Excavator Water ump Metal Detector Others
Figure 1: Future Demand for Technology by Miner Type
Majority of the sampled miners (61%) in the study area, with the exception of SSSM
(nearly 53%), reported that they have access to extension services at woreda level.
12
Availability of extension services across regions is reported by 87, 85 and 75 percent of
miners in Oromia, South West and Gambela regions, respectively.
AVAIABILITY OF EXTENSION SERVICES AT WOREDA LEVEL (YES %)
AVAILABILITY OF EXTENSION SERVICES AT KEBELE LEVEL (YES %)
83.3
68.0
61.3
57.3
47.1
1.7 2.0 4.0 1.6

0.0
Individuals SMEs cooperatives SSSM Total
Figure 4: Availability of mineral extension services at Woreda and Kebele levels (share in %)
87.1 84.6
75.3
61.3
2.6 1.7 0.7 0.0 2.6 1.6
Oromia Gambella Benishagul Gumuz South West Total
AVAIABILITY OF EXTENSION SERVICES AT WOREDA LEVEL (YES %)

AVAILABILITY OF EXTENSION SERVICES AT KEBELE LEVEL (YES %)
Figure 5: Availability of woreda/kebele level mineral extension services (share in %) by region
There are significant variations in trainings received by gold miners across regional states
and types of miners. Of the sampled miners, only 20 percent have received trainings
where large proportion of SMEs (about 64%) took the training but only 2% of individual
miners received any form of training (see figure 25). Regionally, about 70% of the
sampled miners from Oromia region received training while none of the sampled miners
from Benishangul Gumuz received any training on mining and processing (figure 26).
13
63.7
41.2
36.0
19.8
2.0
Individuals SMEs cooperatives SSSM Total
Figure 6: share of respondents who have received training (in%), by type of miners
69.8
11.0 0.0 6.8 19.8
Oromia Gambella Benishagul Gumuz South West Total

Figure 7: share of respondents who have received training (in%), by region
The types of training received by the miners were: training on mining and processing
methods( 51%), training on recovery of minerals from mining wastes(32%), training on
quality testing methods and equipment(14%), and assessment of mineral potential(3%).
In almost all regions, higher proportion of miners received training on mining and
processing methods. In South West region, none of the miners received training on quality
testing methods and assessment of mineral potential.
Table 9: Type of training received by regions

Type of training received
Assessment of Mining and Recovery of minerals Quality testing methods Total
Region gold potential processing methods from mining wastes and equipment
Oromia 2 39 29 11 81
2.47 48.15 35.80 13.58 100.00
Gambella 1 10 4 4 19
5.26 52.63 21.05 21.05 100.00
South West 0 6 1 0 7
0.00 85.71 14.29 0.00 100.00
Total 3 55 34 15 107
2.80 51.40 31.78 14.02 100.00
Source: survey data, March – April, 2022 Note: first row has frequencies and second row has row
percentages
Table 18 shows the duration of training in days, where nearly 37 and 22 percent of miners
received two- or three-days training while about 14, 11 and 8 percent of miners received
14
5 days, 4 days and 1 day training, respectively, which shows that most trainings are only
for few days.
Table 10: Duration of training in days
Duration of training (in days) Freq. Percent

1 9 8.26
2 40 36.70
3 24 22.02
4 12 11.01
5 16 14.68
6 1 0.92
7 3 2.75
Others 4 3.67
Total 109 100.00
Table 19 summarizes the reasons for not receiving training. Large proportion of miners
(45%) reported that lack of responsible body to provide trainings is the main reason for
not receiving training. About 24 percent of non-trainees reported lack of information as a
reason for not participating in trainings and similar percent (24) reported that they were
not selected for the training.
Table 11: Reasons for not receiving training

The reason for not going through training Freq. Percent
Lack of information 106 23.98
Lack of money 3 0.68
Not ready for training 4 0.90
No need for training 16 3.62
No responsible body to provide trainings 201 45.48
Not selected for training 104 23.53
Other (specify) 8 1.81
Total 442 100.00
The survey data revealed that the most severe problems facing gold miners in the study
woredas is lack of appropriate gold mining and processing technologies. The available
technologies are outdated and the recent ones are expensive to purchase and highly
complex to operate. Thus, this calls for provision of appropriate gold mining and
processing technologies as per the demand of gold miners by types of miners and by
regions/woredas, on the one hand, and provision of basic skills on how to operate the
machines and to undertake some basic maintenances. Over 77% of the surveyed gold
miners mentioned that lack of appropriate gold mining technology as the top three
constraints that hinder gold mining in the selected regions (see figure 29).
15
Technologies 77.3
Access to finance and credit 58.4
Access to infrastructures (road, power,… 56.3
Getting and renewing licenses 28.5
Getting land 19.2
Health and safety 17.4
others (Smuggling, brokers, etc.) 15.6
Access to market 9.1
Figure 2: share (%) of respondents mentioning the top three constraints in gold mining
2.3. Economic Aspect of Artisanal and small scale gold mining and processing
Previous studies indicate that the contribution of ASM to national economy is not
significant but has considerable potential to be exploited. The contribution of ASM to the
local economy is not known for certain. The costs and benefits of the mining activity has
not been gauged. The subsector is poorly financed. There are a great deal of stumbling
blocks that hamper financing. Intervention of the Ministry of Mines is nonexistent in this
matter. It is reported that the market for mineral products is distorted. For gold there are
well-established market linkages. Given these shortfalls, it requires to study the actual
contribution of the subsector, the determinants to the low performance of the subsector.
the opportunities, the contributions and the effects to the local economy, the costs and
benefits of the mining subsector, the marketing links including the need for establishment
of market centers, the prevailing mechanisms of smuggling applied, the smuggling level,
the mechanisms to be adopted to mitigate such activities, the extent and shortfalls of
financing, novel ways of providing financing for miners, and the potential for value-
addition.
2.3.1 Outputs and Inputs

Monthly gold production considerably varies across the mining types. Individual miners
reported a production of 18 grams per month. The monthly production figures are
substantially larger for the relatively organized miners: 73 grams/month for MSE, 193
grams/month for cooperatives, and 260 grams/month for SSSM. MSE, and SSSM prefer
to operate during dry season than rainy season even though most individual and
cooperatives operate throughout the year. Interestingly, most miners use motor bike as a
major means of transport from residence to mining sites. Except for SSSM that uses
vehicles, traveling on foot is expressed as the second most important mode of transport
to mining sites.
Table 12: Gold production related issues

Type of miner unit Individual MSE Cooperative SSSM Total
miners
During the last 12 months, did you produce gold? %yes 97.5 81.4 96.0 83.8 92.7
If yes, average monthly production of gold? grams 18.0 73.4 192.7 259.7 62.2
Is gold mining your primary occupation? %yes 95.2 69.6 64.0 69.1 85.8
During the last 12 months, in which season did you mine gold?
Dry seasons % 32.6 79.4 32.0 77.9 46.8
16
Rainy seasons % 14.6 2.9 2.9 10.3
Throughout the year % 51.7 12.8 64.0 14.7 40.5
Only few weeks % 0.6 0.4
Other, specify % 0.6 4.9 4.0 4.4 2.0
Means of transport to mining site from residence
On foot % 39.0 33.3 20.0 2.9 32.7
Motor bike % 56.2 66.7 76.0 51.5 58.4
Other vehicles % 3.9 4.0 45.6 8.4
Other % 0.8 0.5
The two types of gold mining, placer gold mining and primary gold mining, share the
miners unequally. Figure 9 indicates that all type of gold miners mostly engaged in mining
placer gold with the highest percentage in SMEs (85%) followed by cooperatives (68%)
and individual miners (65%). On the other hand, the percentage of SSSM engaged in
placer gold mining is relatively lower indicating that SSSM also mine primary gold by
digging deeper. Surprisingly, about 29% of individual miners are engaged in primary gold
mining, which is higher compared to SMEs and cooperatives implying that individual
miners also dig deeper in search for gold.
Figure 9: types of gold mining (share in %) across types of gold miners
85.3 Primary gold Placer gold Both
64.9 68.0 67.9
57.4
28.9 32.4
24.0 26.5
14.7 10.3
6.2 8.0 5.6
-
Individual miners SMEs cooperatives Special Small Scale Total
Among all miners a sharing modality of production output takes place in differing
proportions. The sharing arrangement could be 30 % of the output for the miners and
70% for land owners or 40-60 or 50-50 respectively as shown below
Table 13: production sharing modality and arrangements (share in %)

Sharing arrangements Individual SMEs cooperatives SSSM Total
30-70 42.11 7.84 62.5 37.5 33.8
40-60 11.4 64.71 12.5 7.5 23.47
50-50 42.11 21.57 12.5 32.5 34.27
Others 4.39 5.88 12.5 22.5 8.45
Land size
There is considerable variation in total land size for mining across miners. The reported
average land size is 0.8 ha for MSE, 1.2 ha for cooperative, and 5.3 ha for SSSM. The
miners stay in a particular location at least for 16 months (individual), 7.2 month (MSE),
24 months (SSSM), and 28 months (cooperatives). Almost all organized miners operate
with land under licence. About 0.6% of individual miners claim to have a mining licence.
17
Table 20 also shows that land under licence is mainly obtained from government in the
case of cooperatives and SSSM and from own holding in the case of MSE.
Table 14: Experience in gold mining and access to land

Type of miner unit Individual MSEs Cooperative SSSM Total5
Experience in gold mining years 7.9 2.0 9.2 7.7 6.8
Total size of land for mining hectare NA 0.8 1.2 5.4 2.4
Cost of acquiring the land Birr 617.6 19,785.3 1,270.0 69,576.5 12,705.8
Primary decision maker on this land
Myself % 62.6 1.0 32.4 44.7
The association/coop % 2.0 9.8 88.0 2.9 7.4
The MSE % 8.4 89.2 4.0 16.7
The SSSM % 55.9 12.3
Others % 27.0 4.0 17.6
The owner or SSSM manager % 4.0 8.8 1.3
For how long have you operated in this location/site? months 16.0 7.2 28.2 23.7 15.9
Proportion of mining land allocated for gold mining? Percent 6.1 49.5 30.6 50.3 20.7
Total area for which you have issued license ha 1.0 0.8 1.4 3.1 1.6
Where did you get the land on which you are licensed?
My own holding % 51.5 8.3 16.4 34.0
Obtained from government % 50.0 14.9 91.7 75.4 44.7
Rented/contracted from private holders % 30.7 4.9 18.1
Open access % 50.0 1.6 1.1
Communal land % 3.0 1.6
Others % 1.6 0.5
Total % 100.0 100.0 100.0 100.0 100.0
If contract, for how long? years 0.3 0.8 0.4 1.8 0.6
Working days
The average number of working days slightly vary across type of miners where
cooperatives spent the highest number of days per month (27.6 days) on gold mining
whereas micro and small enterprises (MSEs) spent the least number of days per month
(19.5 days) on gold mining. Similarly, average working months per year is the highest for
cooperatives (8 months) while MSEs spent least months per year on gold mining. Most
of MSEs (70%) and SSSM (73.5%) use daily laborers whereas only 7% of individual
miners use daily laborers. Salary of daily laborers varies across types of miners based
on the location and types of daily workers (see table 23).
Table 15: labor inputs used in gold production and processing and related costs
Labor inputs Individual MSEs cooperative SSSM Total
s
Average working days (in #) per month 23.1 19.5 27.6 24.1 22.7
Average working months (in #) per year 7.5 5.2 7.9 7.0 7.0
Seasonal variation in actual mining days per year 77.3 92.2 68.0 86.8 80.8
Average working days (in #) per seasons in most busy 71.3 57.6 36.0 60.9 65.9
seasons
Average working days (in #) per seasons in slack 45.0 46.5 13.2 41.3 43.4
seasons
Do you employ daily laborers for gold mining (yes in %) 7.0 69.6 24.0 73.5 27.6
5
The total land (in ha) is only for organized gold miners as private miners have no fixed place to mine gold
18
Average wage for daily laborers (Birr) 98.2 263.0 173.7 448.5 293.4
Do you use contractual labor (% of yes) 0 4.9 0 35.29 5.26
Average number of contractual laborers per season NA 4.60 NA 8.13 7.52
Average monthly salary for contractual labor (Birr) NA 5,060 NA 6,443.3 6,205
Do you use permanent labor (% of yes) 0.56 14.71 8.00 22.06 6.17
Average number of permanent laborers 1.0 1.9 9.5 6.7 4.4
Average monthly salary for permanent labor (Birr) 4,500.0 3,767 4,750.0 10,193. 6,703
Other inputs
In addition to labor inputs, gold miners use several inputs in gold mining including
chemicals, water, fuel, spare parts for various machineries and sacks for gold mining and
processing. These inputs are used among all types of gold miners (individuals,
cooperatives, SMEs and SSSMs. The amount of these inputs used by gold miners is
presented in the following table 24.
Table 16: Average amount of other inputs (per month) used in gold mining and
processing
Other inputs Individual SMEs cooperatives SSSM Total
miners
Chemical (in liters) 20.1 4.8 1,198.5 1,413.5 242.7
Water (in liters) 3,295.8 31,886.0 23,400.0 19,889.7 11,526.9
Fuel (in liters) 21.5 2,844.4 339.0 21,080.7 3,162.6
Other inputs (like spare parts) 20.1 0.0 159.4 4.8 20.5
These inputs are directly purchased from local markets and only limited number of inputs
is supplied by gold buyers (or collectors). Thus, the gold miners have limited linkages with
gold buyers/collectors in terms of supply of inputs used in gold mining activities (see figure
10).
Figure 3: Sources of inputs (in %) by types of m

Direct purchase from markets Provided by collector Other (specify)
100.0 94.1
70.5 74.5 75.5
26.1
17.7 18.7
3.4 7.8 2.9 2.9 5.8
0.0 0.0
Individual miners SMEs cooperatives Special Small Scale Total
Average monthly costs of other inputs vary by type of inputs and gold miners. For SMEs
and SSSM gold miners, the average monthly cost related to fuel consumption is high
where that of SSSM is several folds of that of other types of miners. Surprisingly, average
costs on water are greater than average costs of fuel for individual and cooperative miners
(see table 25). This indicates that scarcity of water is severe in most of the mining sites.
19
Table 17: Average costs (per month in Birr) of other inputs used in gold mining and
processing
Types of other inputs Individual SMEs cooperatives SSSM Total
Chemical (liters) 72.8 107.8 197.3 15,068.1 1,935.5
Water (liters) 3,301.7 769.6 24,966.8 11,024.0 4,732.3
Fuel (liters) 1,688.0 57,347.7 24,351.0 361,682.3 57,507.7
Other inputs (like spare 435.2 305.9 9,395.1 2,853.0 1,101.1
parts)
There are also expenses related to royalty, which has significant variations among types
of miners where SSSM pays the largest average royalty whereas individual miners pay
the least. Similarly, income tax related to income from gold mining varies across types of
gold miners (see table 26). Gold miners also spent money on basic items like food,
shelter, transport and security. The sources of expenditure are mostly own pocket as
there are limited access to credit from formal financial institutions due to lack of collateral
and remoteness of gold mining sites.
Table 18: Average other expenses and payments related to gold mining
Types of other expenses Individual SMEs Cooperatives SSSM Total
Average daily expenses on food per members 341.9 415.8 594.9 1,954.4 566.1
Average monthly expenses on shelter per member 902.1 169.5 700.0 980.1 767.0
Average daily travel expenses to and from mining sites 65.7 293.4 216.4 2,190.1 376.9
Other average monthly expenses (security, health, etc.) 608.0 145.1 2,176.0 18,605.3 2,814.5
Average amount of royalty payment for gold mining 321.2 5,301.7 308,550.3 110,897.1 28,874.6
Average amount of income tax for gold mining 3,729.9 1,966.7 74,368.0 15,772.2 8,094.7
Average amount of any other payment for gold mining 1,412.7 1,319.5 28,470.0 76,083.2 11,838.3
(per year)
Access to credit and saving

Miners need saving and credit services to satisfy their financial needs. The perceived
availability of traditional and modern financial institutions in the respective locality of
respondents indicates the very low level of availability of financial services, and the
availability of traditional saving institutions is perceived to be more than that for banks,
micro finance institutions and modern saving and credit associations. Despite the
perceived availability of either traditional or modern financial institutions in the study area,
large number of miners (52%) use bank and micro finance institutions to get financial
services while only 12% of the miners responded to use traditional savings.
When the financial institutions are not available in their immediate kebele, miners are
required to travel to other nearby kebeles/woredas. For instance, in Oromia region, which
has on average the shortest distance to reach the closest possible Idir/Ekub, credit and
saving institution and bank or microfinance institutions, miners travel on average 9.2kms,
12.6kms and 11.9kms respectively. On the other hand, miners in Benishangul Gumuz
region travel the furthest distance to reach the same finance institutions to the extent of
21.5kms, 26.2kms, and 118.2kms respectively.
20
Miners who have not borrowed from financial institutions were asked about the major
reasons for not borrowing, and the absence of lending institutions became the first major
reason. This absence of lending institutions in the study area is probably because of
security reasons or due to the very high transaction cost of doing business in these
specific study sites. Although this is a preliminary finding, it shows the need for
government intervention in creating a business environment conducive both for public
and private financial institutions to open branches in these areas.
35.0 32.7
30.0
25.0
20.0
15.1
15.0 12.9
10.6 10.7 11.5
10.0
5.0 3.3
0.7 0.6
2.0
0.0
Figure 11: Reasons for lack of access to credit (share in %)
On the other hand, formal financial institutions do not give loan to artisanal, small-scale
miners and dealers. Their mining license and land cannot be used for collateral purpose
in the financial entities. Unless the miners have other business or permanent asset,
getting loan from financial institutions in Ethiopia for artisanal and special small scale gold
mining is not an easy task.
Machinery use, production level and productivity

Gold production substantially varies across the mining groups and use of machines. On
average, those who use machines tend to produce more as compared to those who do
not use machines. The difference is especially visibly larger for MSE and Coop & SSSM
groups where the average production is more than double for those that use machines.
21
Monthly gold production by machine use
Indiv.
No Machine
Use Machine
MSE
Coop&SSSM
0 200 400 600 800 1,000

grams
Source:MoMP survey, 2022
Figure 12: Machine use and gold production by type of miners
The summary results from ordinary least square (OLS) model and the doubly robust (DR)
estimates indicate a strong positive effect of use of modern machines on productivity. The
first specification in Table 27 presents estimates from OLS model in a less parsimonious
setting where in addition to the ‘machine use’ variable, we also control for other important
variables including miner characteristics (gender, age, education, religion, marital
status,), mining characteristics (land size, distance to mining site), and different
technologies (tools, extension service). The OLS-based specification shows a
substantially large -i.e., 90% - gold productivity gain for those miners that use modern
machines. The OLS estimates also show the causal effect of other variables on gold
productivity. For example, it can be seen that land area for mining has a positive
association with productivity -i.e., the larger the mining area, the greater the productivity.
Interestingly, prices in formal market and informal market seem to affect gold productivity
though in different direction. While gold prices in formal markets are found to be positively
correlated (the higher prices in formal market, the higher the productivity), prices in
informal market are found to be negatively related (the higher prices in informal markets,
the lower productivity).
On the other hand, older miners, miner associations with larger members, and miners
with access to information on quality testing also seem to have more productivity as
compared to their counterparts. While OLS is good, in this case, however, it may fail to
control for confounding factors. In line with that, the last columns of Table 27 also present
results from the Doubly Robust (DR) estimates. Accordingly, looking at estimates from
the Doubly Robust model, interestingly, the parameter estimates confirm the very high
productivity gain in using modern machines. The estimates from the DR model, controlling
for a range of important variables, indicate a significant positive productivity effect of
modern machines use-i.e., 88%.
Table 19: Estimated productivity response to use of machines in gold production

Dependent Variable: log (monthly gold production in
grams)
Doubly
Independent Variables Unit OLS Robust¥
Coef. t Coef. z
22
Use machine yes=1 0.907*** 3.65 0.879** 2.11
Land size (mining) log(ha) 0.394** 2.01
Transport to mining site log (minutes) -0.018 -0.04
Selling price (formal market) log(birr/gram) 2.518*** 3.48
Selling price (infromal market minium) log(birr/gram) -1.432* -1.91
average age of members log(year) 1.019*** 3.10
total members lot(number) 0.679*** 3.07
shovel yes=1 -0.333* -1.86
Info on quality testing 0.898*** 2.78
Additional controls:
Miner Characteristics (gender, education,
religion,
own phone yes
experience, member size, have licence yes
Other indicators (gold quality, mining season,
tools) yes
Access (extension service, proximity to selling
site) yes
Miner type yes
Constant -10.009 -1.56
Number of obs. 245
Note: *, **, *** indicate significance at 0.1, 0.05 and 0.01 significance levels; robust standard errors
¥ bootstrapped standard errors with 200 replications
Production constraints
Lack of modern technology was reported as the first, second and third major problem for
miners in the study area where nearly 36, 20 and 21 percent of the miners reported it as
the first, second and third problem (see Tables 36-38). About 27 and 13 percent of miners
reported lack of access to infrastructure such as road, electricity etc. and getting license
as their first major challenge. Although about 10 percent of the sampled miners reported
lack of access to finance as their first challenge, a greater number of miners (36%) put it
as the second major problem following lack of access to technology.
2.3.2 Marketing and sales of gold

The average volume of gold sold by each miner type over the 12 months period was
about 233 grams with considerable variation across types of miners where individual
miners sold the least (140 grams) whereas SSSM sold the largest amount (over 664
grams). Cooperatives had the next sales volume of about 634.6 grams (see figure 13).
Of course, this should not be surprising as they are inherently endowed with better
financial, human, and physical resources. The transaction of gold is predominantly carried
out in cash regardless of the nature of the miners. The practice of electronic payments or
credit scheme is almost negligible. This could be mainly attributed to lack of necessary
infrastructure and limited awareness of modern methods of payment among artisanal and
small-scale miners.
23
664.4
634.6
288.8
232.6
139.8
Individual miners MSEs Cooperatives SSSM Total
Figure13: Average volume of gold (in grams) sold during the last 12 months, by miner
type
In terms of quality, nearly 46% of the total quantity of gold offered for sale by the surveyed
miners was 21 Karats (21K). Pure gold, 24K gold, accounts for about 3% while the share
of 14K gold is as low as 1% of the total (figure 14). Given the fact that about two-thirds
of gold traded locally by the surveyed miners was at least 18K, there are good
opportunities to produce high quality gold for local and international markets.
14 Karat 18 Karat
1% 3%
Others
31%
21 Karat
46%
24 Karat 22 Karat
3% 16%
Figure 14: Quality of gold (in Karat) sold by the miners during the last 12 months
One of the main constraints in the transaction of gold is the mechanism of testing its
purity. Gold suppliers/buyers in Oromia and Gambella are comparatively better endowed
with such equipment. On the contrary, the proportion of miners having these tools is only
7% and 8% in Benishangul-Gumuz region and South-West region, respectively (figure
15). According to the survey result, this problem is more prevalent when the transactions
take place in parallel markets or the major suppliers/buyers are traders/collectors.
24
58.6
40.7
29.0
6.6 7.7
Oromia Gambella Benishangul-Gumuz South West Total

Figure 15: percentage of ownership of gold purity testing equipment/tools among buyers: by
region
Globally, there are various tools/equipment used for testing purity of gold. One of the most
widely applied instruments is Karat-Meter. Among those buyers who possess gold testing
facilities, only 27% of them reported that they use Karat-Meter (figure 16). About 40% of
them apply either distilled water or combination of distilled water and mineral or distilled
water and Karat-Meter. Still considerable share of miners depends on other testing
mechanisms.
35 31.45
30 27.04
25
19.5
20
15
9.43 10.06
10
5 1.89 0.63
0
Distilled water Mineral water Karat meter Both Distilled Both Distilled Both Mineral Others
water & Mineral water & Karat water & Karat
water meter meter
Figure 16: Tools/equipment used by buyers for detecting the quality of gold (in percent)
Evidently, the major buyers of gold tend to vary for each category of miner/seller. The
share of gold channeled to collectors/traders accounts for about 91%, 74%, 52% and 12
% for individual miners, MSEs, cooperative miners and SSSMs, respectively. While nearly
80% of the sales of SSSMs are directed to the Bank, sales to the Bank is almost negligible
for individual miners. The corresponding figure for cooperatives and MSEs stood at about
48% and 15%, respectively. Except individual miners, other types of miners declare that
they have not sold any volume of gold in the parallel market over the 12 months period.
Others buyers mainly include other Special Small-Scale miners and mining land owner.
25
Table 20: Major buyers of gold: by types of sellers/miners (percent of their total sales)
Individual miners MSE Cooperative SSSM
Bank - 14.7 48 79.4
Collector/trader 91 73.5 52 11.8
Parallel/black mark 2.5 - - -
Other cooperatives 1.4 - - 1.5
Others 5.1 11.8 - 7.4
Total 100 100 100 100
The most important factor affecting the decision to sell is the amount of gold. Since the
Bank does not accept less than 50 grams of gold, it is rational for the sellers to approach
other buyers who don’t impose such restrictions. The second key factor, as indicated by
the respondents, is whether the buyers can make the payments immediately. Sellers are
also attracted to those buyers who offer higher prices, those who are close-by, those
having good weighing system, those making purchases at the mining site, and those
providing advances or those who lend money to the miners/sellers.
Accepts small quantities below the bank threshold 43.0

Makes paymnents immediately 37.7
Provides higher prices 27.8
Proximity 23.6
I trust the weighing system 18.9
Buys at the mining site 14.5
Provides advances or lends money 13.6
Accepts large quantities 5.3
Others 24.1
Figure 17: Major reason for the choice of a particular buyer by a seller (in percent)
Given the minimum threshold set by the National Bank of Ethiopia with respect to the
quantity of gold, the artisanal and small-scale miners have to make their own decisions
when the levels of gold output appeared to be below the fixed amount. The highest share
of the respondents (64%) replied that they would sell the amount of gold below the
minimum threshold to formal traders while about 17% of them would undertake additional
gold mining until they meet the minimum standard in terms of quantity. Fortunately, only
4% of them make sales to informal traders under such circumstances.
Table 21: Miner's decision when the amount produced is less than the minimum
threshold
Decisions % of respondents
Sell the amount of gold below the minimum to formal traders 64.3
Mine additional gold till the minimum is met 17.6
Sell the amount of gold below the minimum to informal traders 4.0
Combine with other miners 1.5
Sell the amount of gold below the minimum to local jewelers 0.2
26
Others 12.5
Total 100.0
The average selling prices of gold (per gram) in the formal market range from 2242 birr
to 2862 birr. The corresponding prices are just 1316 birr and 1544 birr in the informal
case. This finding corroborates the extremely limited transactions of gold trading in
parallel markets. Geographically, the average selling price of gold in general and 21K of
gold (in the formal market) in particular is found to be relatively higher in the South-West
region and Oromia region than in Benishangul-Gumuz and Gambella.
Panel (a): Formal vs informal market Panel (b): Average selling prices (in the
formal market) across regions
4000.0 3500.0
3000.0 3000.0
2500.0
2000.0 2000.0
1000.0 1500.0
1000.0
0.0
500.0
Formal Informal
market market 0.0
Average price Minimum price

Maximum price
Panel (c): Formal vs informal market Panel (d): Average selling prices (in the
prices: 21Karat gold formal market) across regions: 21 Karat
gold
3000.00
2000.00
1000.00
0.00
Formal Informal
market market
Average price Minimum price

Maximum price
Figure 18: Selling price of gold (birr/gram): formal vs informal markets and regional
comparison
On average, about 42% of the miners go to the selling posts on foot. Distance to selling
posts, travel costs, and expenditures for security and accommodations are costs incurred
by artisanal and small scale. Ease of availability of gold buyers/suppliers to bank at the
locality of the miners would likely reduce the inconveniences associated with the
transactions of gold. Nearly 60% of the surveyed miners assert that this arrangement is
27
at least moderately beneficial to miners. In the transaction of gold, both parties need to
agree not only on the price but also on the weight. More than 90% of the miners agree
that this mineral is weighed by the buyers before making the transactions. However,
almost 83% of them indicate that they don’t contact other buyers before making the final
transactions. More than 60% of the transaction of gold takes place at trader’s shop
(fixed). Other major sites include local bank (13%), local daily markets (11%), and on
farm or at home (11%). The payment structure is predominantly one-time payment
whereby the buyers make 100% disbursement at the agreed price.
The gold prices are predominantly fixed by the buyers/ suppliers where the impact of the
sellers is almost negligible. In the case of formal transaction involving the local bank, the
prices are determined by the bank. However, more than 70% of the surveyed miners
perceive that the price they receive from sales of gold is fair. Moreover, about three-
quarters of the miners don’t have any record of conflict with the buyers/suppliers. For a
given gold quality, individual miners receive between 2-7% lesser prices in formal markets
as compared to their organized counterparts. Comparison of the maximum price in
informal markets also reveals that, given quality, individual miners receive lesser price (at
times up to 27%) as compared to the more organized miners. This could be due to either
a quantity effect where individual miners may not be able to fulfill the minimum quota
requirements or due to a poorer bargaining power.
Challenges of marketing and sales of gold

The political instability and security issue in the country is posing serious impediment both
to the production and sales of gold. In addition to the instability at the national level, the
key challenges related to marketing of gold include lack of market information (particularly
price), the licensing procedures and requirements, the minimum gram threshold set by
the bank and the distance to the nearest bank, domestic illicit trade, and cross border
smuggling of gold.
31.9
19.8
14.9
8.7
7.4
6.2 6.4
4.7
Availability of Distance to bank Lack of price Minimum gram Licensing Illicit trade Smuggling Other
nearby bank information treshold set by requirement within the across border
branch NBE country
28
Figure18 : Challenges related to marketing/transaction and value chain of gold (in
percent)
2.4 Legal, institutional and organizational aspects of gold mining, processing

and marketing
Studies on ASM in Ethiopia indicate that there are related laws and regulations that are
inadequate to deal with the sub sectors’ problems and inappropriate to address main
issues. Laws pertinent to allied sectors can affect the mining sector and particularly in
most cases when the laws are not harmonized. Illegal practices and flouting of laws and
regulations related to mining, environment, and marketing are reported. Implementation
problems and failure of enforcement of the laws and regulation prevail. It requires to
identify the applicable laws and regulation that may be inadequate to address problems
of the subsector, the laws and regulations that are inappropriate for the sector, the laws
and regulations in other sectors that affect operations in the subsector, the type of
illegalities of practices in mining, environment, and marketing aspects, the extent of
flouting the laws, laws that need harmonization and areas that government bodies fail to
implement or fail to enforce. Applicable laws and regulations in the sector and outside the
sector, mining , environmental and marketing laws open to be breached and the need
for harmonization are sourced from the literature while the inadequacy and
inappropriateness of the laws and regulations, the extent to which laws in other sectors
affect the subsector, the extent of flouting the laws, the laws and regulations that are not
enforced and the extent of failures to implement the rules and regulation have to be
sought from surveys. Moreover, it requires to assess the involved national and
subnational bodies or institutions and the division of labor between them in monitoring
performance, ensuring compliances of various sorts and providing necessary services
and assistance to identify gaps in the division of labor and rationalizing responsibilities
and coordination role to attain improved performance in environmental management and
other compliances. Assessment of the prevalence of these problems was conducted in
the baseline study.
2.4.1 Perceptions of miners on existing rules

Existing government regulations related to royalty payments, land size, land use period,
and other regulations of both federal and regional governments are perceived differently
by different miners. Almost all MSEs consider the existing regulation either as satisfactory
or good, while 30% of individual miners considered it bad and 58% of the same considers
it satisfactory. Nearly half of the existing miners in general considered the regulations as
satisfactory while more than 27% takes it as good. This level of partial satisfaction must
not be ignored.Taking appropriate measure based on the perception of miners in terms
of either changing the regulation or creating awareness about the existing regulations is
essential for effective collaboration with miners.
2.4.2 Institutional and organizational aspects of gold mining, processing and

marketing
Stemming from their mandates, tasks such as monitoring performances, ensuring
compliances, and providing essential government services and supports to ASMs are
29
expected to be conducted by regulatory authority along the chain of government structure.
Organs in government structure more or less involved in monitoring performance,
ensuring compliances, and providing essential government services and support to ASM
and small scale mining are Federal Ministry of Mines, Regional Mineral development
Agency, Zonal Mine Office, Woreda Mineral Development Office, Kebele Manager,
Woreda Land Management and Environment, Woreda Job Creation Enterprise, Security
Office and Cooperatives Bureau. The responsibilities are shared along the chain from
Federal Ministry of Mines to kebele. What matters, however, is whether the roles played
by the various government organs along the chain of its structure are complementary or
contradictory as performances of ASM miners in terms of production, productivity,
marketing, and growth are affected by performances of these institutions and
organizations.
Results from the survey show that almost all of gold miners perceive that their
performances are being monitored by government structures at various levels: kebele,
woreda, zonal, regional and federal government. Similar to performance monitoring,
perceptions on monitoring compliances indicate that woreda mineral desk (69%) and
kebele managers (50%) were exercising their role more than the roles played by zonal,
regional and federal offices. The role played by zonal mine office in both monitoring the
performances and ensuring compliances is less than that of regional agency/bureau.
Despite the miners’ complaint about the quality of support & services provided to them,
67.4% of the miners report that woreda mineral desk provide them support and service,
while 42.66%, 24.2%, 21.5%, 21% and 12% admitted to have been supported and
provided service by kebele manager, security office, zonal mining office, regional mineral
development agencies and cooperative bureaus respectively. It has to be noted here that
individual miners interact more with lower administrative units such as woreda and
kebeles and individual miners are not much connected with higher government structure.
The quality of services of lower administrative structure highly affects formalization of
these miners and their overall performance. About 28% of the miners faced delays in
addressing complaint followed by delays in service delivery by the bureaucracy (27%)
and weak rule of law (18%). Evidence in this regard show that delays by the bureaucracy
in delivering services is prevalent in Sharkole woreda followed by Oddo Shakiso and
Dima respectively. Similarly, delays in addressing complaint is more reported in Dima and
Oddo Shakiso in the order of magnitude. Miners in Bero believe that there is weak rule of
law particularly in their woreda. Lower administrative units including woreda and kebele
need to be strengthened and checked so that service delivery shall be improved and the
efforts to formalize ASMs will be facilitated.
Conflict experience was reported by 17% of the miners, which is the effect of
administration related causes. Among miners who experienced conflict, about half of
them were individual miners and less than one third was SSSMs. The experience of
conflict by MSEs and cooperatives accounts was minimal. The conflict was reported to
be with other miner(s) (can be individual or group), with local community, with local
authority, and even with large mining companies, despite differences in percentage.
About 43% of the reported conflicts was with other miners (either individual or group),
22% with local community, and about 20% was with local authority. The cause of conflict
30
revealed that border issue (due to lack of clear demarcation of mining site) is reported as
a major cause followed by forceful displacement. The two causes account for about 89%
of the conflicts while the remaining weak sources are environmental damage, water
shortage and others. It was also reported that almost all of the conflicts were solved
through peaceful negotiations though handful cases remain.
Challenges
There are no well-organized documentations on mining in terms of proper mineral
prospection, exploration, feasibility study, archive data etc. Absence of such information
leads to low integrity among administrative bodies that are responsible in licensing,
administrating and marketing mineral products. In addition, there are cross-regional
inconsistent requirements for issuing licenses and duration of the validation period of the
license.
In addition, government stakeholders at regional, zonal and woreda levels have limited
capacity to follow up implementation of laws and regulations that govern the mining
sectors. There is weak vertical communication and limited coordination among concerned
government stakeholders (mining bureau, trade bureau, environmental protection
bureau, etc.). There are no working manuals and guidelines for artisanal and small-scale
gold miners. While the country has different mineral exploration and mining
proclamations, governing bodies failed in implementing and enforcement of laws.
Politically assigned administrative bodies have no know-how of the mining sector. License
issuance is not transparent as licensing entity grant license without fulfilling the
requirement, criteria and without demarcating mining land boundary. Some artisanal gold
miners have no record on the date of license grant, license renewal etc. at the licensing
authority. As most gold mining activities in Ethiopia take place near boarders, many
foreign citizens mine gold without any work permit, mining licenses, accountability in the
use of mercury for gold amalgamation, destroying the ecosystem and gold smuggling.
Mining sector has suffered from changing governmental organizational structure, since
the establishment of the Ministry that was organized sometime with energy sector, at
other times with water and other unrelated sectors in its history. As such Ethiopian mining
sector has lacked consistency, across time and across the regional states, in structure,
licensing styles and criteria. It was pointed out in previous studies that many institutions,
other than the Ministry of Mines and Petroleum, play roles in the ASM sector among which
are sub national authorities. Overlaps exist in monitoring and ensuring compliances of
various sorts in the sector. The mandate related to the environmental compliances is
confusing in which coordination between Ministries, Departments and Agencies requires
attention for improvement. Which institutions provide the necessary service and the
capacity to provide necessary services to ASM operators lack adequate information. The
roles Ministry of Mines, EPA, Job Creation Enterprise and other bodies providing
oversight at sub national level must be clearly delineated.
2.5 Social and Environmental aspects of gold mining and processing

The extent of women’s involvement in artisanal mining and the kind of service they
provide define the role they play in the subsector, which is part of the investigated in this
31
section. The existence and the extent of gender-based violence (GBV) must be identified
and quantified. Whether children are involved in mining and if involved the information on
the extent of such involvement are important. Previous studies have shown that there are
community benefits and costs with mining, but these have not been well quantified. It
requires to properly investigate the positive and negative effects of ASM on mining
communities. While it is generally accepted that mining has several environmental effects,
greater evidence is required on the level and types of environmental effects. Miners’
health and safety are adversely affected by mining; however, existing documents indicate
that no accident statistics are kept in AMS sector. The survey attempts to address these
issues.
2.5.1 Gender, child labor and community issues in gold mining
Mining operators response on whether there were women in their group and what
women’s roles were in gold mining indicate that there were some women in mining gold
that take part largely in preparing food for miners (31%), washing gold (23%),
administrative tasks (25%), Crushing stone (14%), fetching water (11%) and selling gold
(10%) with regional differences. On the share of earning from mining gold that accrues to
women, 70.2% respondents state that the share is equal while 9.3% of the respondents
state that women earn more than male counterparts. The remaining 20.5% respondents
state that the share in earning accruing to women was lower than their male counter parts.
The existence of gender-based violence (GBV) on women working in artisanal gold

mining was assessed by asking all the respondents in general and only women
seaparately. Both the responses indicate that the frequency of occurrence of sexual
harassment, verbal harassment, discrimination in jobs and discrimination in decision
making were low. General respondents state the existence of GBV in slightly higher
percentage, i.e., 3% sexual harassment, 4% verbal harassment, 8% discrimination in job,
and 2% discrimination in decision making, amounting to an overall 15% responses stating
the existence of GBV while women respondents admitting the existence of GBV across
regions were only 3%. Similar assessment across types of miners indicates that the
occurrence of GBV as perceived by the women respondents is similarly low across types
of miners.
Whether traditional norms related to involvement of women in mining existed was replied
on the affirmative by 15% of the respondents. Among these responses, the negative
norms related to involvement of women in mining were those limiting women’s role to
domestic matters (48%) and restricting the participation of women in mining (10.7%).
Those who stated the existence of positive traditional norms that allow participation of
women in mining were 35%. Whether there was a skill gap between genders was
assessed and 65.5% believe there is no skill gap while 34.5 % believe there is skill gap.
For miners the most frequently mentioned inducement to involvement in mining was
“better income as compared to other local activities”, followed by “luck of alternative
livelihood”. Availability of the resource came as the third inducement while family
experience followed it. Job satisfaction was the least inducement. Similar pattern is
32
observed in the reported inducements across regions. In the view of most respondents
(94.7%), local communities participate in mining across all regions with differing rates6.
Overall, the perceived participation rate by respondents is dominantly between 25% and
75%.
The reported negative effects of ASM on communities indicates that “increasing school
dropouts” stands out as the most frequented response among all groups. The next in line
were “Physical damage on children”, “Proliferation of sex work”, “Drug and alcohols
addiction”, “conflict”, “Displacement”, etc. The reported positive effects of ASM on
communities were fewer than the negative effects where “Cultural exchange” is the most
frequented response among all groups. The next in line were “Job opportunity”,
“Knowledge transfer”, “Positive spillover effect”, “better income”, and “Urbanization”.
Responses on whether own child / children participate in gold mining activities was
predominantly “No” (91.5%). The remaining 8.5% admit that their own children were
participating in gold mining across regions. Among miner types, relatively higher
percentage of MSE members has own children in mining. The reported number of
children range between one and fifteen. The most frequented number of children
participating in mining was “One child” (29.8%). Regional comparison indicates that most
of the reported numbers of own children participating in gold mining happened to be in
Oromia (46.8%) and Benishangul (36.2%). Children participating in gold mining were
reported to have been involved largely in administrative task (34%) and digging holes
(34%) followed by washing gold. Digging holes is most frequented in Benishangul (23%)
and administrative tasks are most frequented in Oromia (30%). Among these children
64.2% are not in school. The reason for not attending school could not be gleaned from
the data. The respondents’ aspiration on the future of their children shows that 41% want
their children to be employed in government or private firms, while 28.5% want them to
run other business and 28.7% ambition is not specified.
2.5.2 Environmental aspects of gold mining

In artisanal mining washing the ore is the process by which gold is separated from its
natural carrier. Among water sources of deep well, river, pond water, tap water, water
tank, natural lakes and others, the main source was river (61.89%). By far the second
source (14.16%) and the third sources (12 .89%) were pond water and water tank
respectively. The sources of water used for cleaning varies across regions. The use of
river water is highest in Gambella followed, by far, by Oromia and South West Ethiopia
Region. On the other hand, the distribution of the sources of water used for cleaning by
type of miners indicates that “individual miners”, amounting to 36.7% of all miners, use
river water most.
Among the various possible negative effects of gold mining and processing, (pollution of
water bodies, air pollution, deforestation, land degradation, land sliding or collapse, soil
contamination and others), pollution of water bodies was the number one negative effect
6
The highest frequency of stated by miners in Oromia was a participation rate of 70%; in Gambella it was 25%;
in Benishangul 50% ; and that for South Western Ethiopia was 50% but with extremely low frequency.
33
of gold mining on the environment followed by deforestation as the second negative
effect. Afforestation, refilling the holes, using environmentally friendly technologies,
awareness creation on environmental effect, avoidance of hazardous chemicals,
appropriate processing site selection and installing waste treatment plants were
suggested by the respondents as the remedial measures in a multiple answer modality.
Whether operators know about the environmental effect of the gold mining was answered
negatively (over 80%) in the three regions other than Oromia. Responses from Oromia
region indicate that there is more (63%) awareness of the environmental effect of gold
mining. Awareness of the operators on environmental effect of gold mining by type of
miners indicates that those miners organized in micro and small-scale mining enterprises
have more percentage (11% of all miners) of aware members than the remaining 7.5%
unaware members.
2.5.3 Health and safety aspects of gold mining, processing and marketing
Mining activity inherently entails a number of health and safety risks if they are not
managed properly. In fact, the degree to which such adverse health effects are minimized
is partly determined by the technology of mining. Despite all the necessary precautions,
it is still likely that miners are prone to short-term or long-term health problems arising
from gold mining. Exposure to various hazardous minerals, vectors of diseases and
transmitters, pathological environment and other mechanical hazards are possible
causes for various sicknesses associated with mining. The extent to which these
exposures are perceived as causes of health hazards and the occurrences of actual
health hazards needs assessment. Respondents were asked whether they have been
sick during mining or just after leaving the mining site. The responses were largely “No”
in Oromia (92%) and Benishangul (82%) while it was largely “Yes “in Gambella (94%)
and South Western Ethiopia (85%). Overall, 55% claim that they have been sick while 45
% did not. Those who experienced sickness, the diseases they suffered were 62%
malaria, 10% waterborne diseases and 6 % respiratory system diseases as shown in
Table 76 below. Operators in Gambella region suffered most from malaria and
waterborne diseases, followed by South Western Ethiopia region. Most of the
respondents (81%) believe that the sickness was not the consequence of mining or the
mining environment while 19% believe that the sickness was the consequence of the
mining or the mining environment. The responses across regions have similar pattern of
higher percentage of the belief that the sickness was not the consequence of mining. The
response on whether a health professional has ever confirmed that the sickness was the
consequence of mining or the mining environment indicates that only 17% are positive
while the rest 83% state that health professional did not confirm that the sickness was a
consequence of mining.
The injuries or accidents that occurred, as reported by the respondents, did not include
most of the common injuries of eye damages, suffocation, broken legs or arms, lost legs
or arms, head injuries, burning, poisoning by chemical, broken hips, backbone pain, and
dehydration, with the exception of responses from Benishangul where backbone pain
(28%), suffocation (13%), dehydration (10%) and eye damages (6%) were reported. The
highest percentages of injuries or accidents that may have occurred do not incorporate
the common accidents. Overall, 94% of the respondents do not use protective
34
equipment. The only where 23% operators reported to use protective equipment was in
South W estern Ethiopia. The distribution of the use of protective equipment among types
of miners indicates that it is rather individual miners (5% of all) that use protective
equipment.
The operators were asked whether they get their health status monitored regularly or not.
Only 9% of the respondents, mainly from Oromia region, replied that their health status
was regularly monitored, indicating that the overwhelming majority of the operators (91%)
do not regularly get their health status inspected. The respondents also revealed that not
only they do not get their health status inspected, but also there was no organized body
for inspection and monitoring of health status in their locality as only 1% of the
respondents expressed that an organized health monitoring body exists in their locality.
Similarly, there was no regular inspection of mining equipment for safety and there was
no organized body for the inspection of the mining equipment. Health service providing
facilities were also nonexistent in the study areas.
Challenges related to Gender, Child labor and Community

There is a ground to suspect that Gender Based Violence (GBV) is covertly going on and
unless women themselves reported it, it is difficult to identify. This stands as a challenge
to address the problem. The other challenges are children’s wide involvement in
individual mining activities to augment family income and this has impact on their
education. Child labor is high in Benishangul Gumuz and as a consequence dropping out
of children from school has become a challenge. The gap in providing school feeding and
parents need to augment their earning has induced child labor to prevail. In Gambella, a
further challenge for persistence of child labor is that children are entitled to the full benefit
of the mined gold without any share, which has created a strong incentive to children to
remain in gold mining.
Environment related gaps and challenges

In Guji zone it is reported that miners leave open pits in mining sites upon realizing the
non-existence of gold in the site without rehabilitating the site. Abandoning the site without
rehabilitation is a customary practice of mining machinery owners who entered into
product sharing agreement and such unregulated practices occur as a result of the gap
in clear guideline and directive from the government side. As a consequence, large
abandoned areas of mining sites left open without rehabilitation exist with no responsible
individual for this malpractice. We may easily conjecture that such challenges and gaps
are relevant to other mining sites as well.
While absence of clear guidelines could be a gap to address certain environmental

issues, FGDS in Gambela and Benishangul reveal that there is lack of supports for
stakeholders in ensuring the enforcement of existing rules and regulations related to
environment. There is failure on the part of the regulator to implement, monitor evaluate
and audit the operators with respect to environmental and social impact manuals. The
federal environmental protection agency give inadequate attention to the mining sector.
Logistics and budget support from Ministry of Mines for training, monitoring, evaluation
and environmental auditing and creating awareness on environmental impact is much
35
needed. Licenses are issued without regulatory guidance on environmental obligations,
and lack of support to raise awareness and build the capacities of miners on rehabilitation
is the other challenge.
Health and safety related Challenges and Gaps

FGDs in Gambella express that the challenges to health and safety for artisanal miners
and for local community are open pits, water body pollution, forest destruction, on the one
hand, and the threat of illegal gunmen and criminals in the area. Safety and health issues
are neglected. Moreover, producers use mercury (a dangerous chemical) to separate
gold from ore without using any protection materials when they mine and process gold.
They leave open pits without refilling them after they finish mining in that area, thereby
exposing people and animal to lethal chemicals.
3. Summary and the way forward

Whether miners are organized or not, they have used traditional tools like shovel, batia
and iron bar for gold mining and processing. Only 33% of sampled gold miners use
modern gold mining technologies, of which only 10% of individual miners uses modern
technologies and relatively larger proportion of organized miners, mainly SSSM, use
modern technologies. As better machines can result in higher level of gold production,
getting appropriate and affordable technologies is one of the key challenges facing gold
mining sector. Limited access to finance and technical and business skills are conditions
perpetuating the shortcomings in accessing technologies.
Addressing market related constraints are challenges that need intervention. Effective
transaction of gold requires a mechanism of testing its purity. As it stands now only few
miners possess testing equipment and technology. The problem is more prevalent when
the transactions take place in parallel markets or the major buyers are traders/collectors.
The decision to sell of miners is affected by the amount of gold, readiness of buyers to
make the payments immediately, the closeness of the buyers to the sellers in terms of
distance, the higher the price buyers are willing to pay, the wielding of weighing facilities,
the readiness to provide advance payments and the willingness to lend money to miners.
Since the Bank does not accept less than 50 grams of gold, it is rational for the sellers to
approach other buyers who don’t impose such restrictions. Lack of information on market
price needs attention. The licensing procedures and requirements, the minimum gram
threshold set by the bank and the distance to the nearest bank, are factors that influence
domestic illicit trade, and cross border smuggling of gold.
Effective collaboration with miners requires reorienting the attitude and perception of
miners on the existing rules and regulations, which may be effected either by changing
the regulation or by creating awareness about the existing ones. There are no well-
organized documentations on mining in terms of proper mineral prospection, exploration,
feasibility study, archive data etc. There are no working manuals and guidelines for
artisanal and small-scale gold miners. Absence of documentation and guidelines leads to
low integrated moves among administrative bodies that are responsible in licensing,
administrating and marketing products. Inconsistent requirements across regions in
36
ssuing licenses, setting the period of the validity of the license, and setting rates of royalty
and income taxes are areas needing harmonization. Government stakeholders at
regional, zonal and woreda levels have limited capacity to follow up implementation of
laws and regulations that govern the mining sectors and limited coordination among
concerned government stakeholders (mining bureau, trade bureau, environmental
protection bureau, etc.) Political assignment of administrative bodies with lack of know-
how contributes to low implementation capacity.
The sector certainly needs attention on issues of sustainable development, environmental

protection, land use, societal benefit and social security. Women’s role in mining sites is
mainly supportive activities such as preparing food, while some taking part in washing
gold and administrative tasks. General miner respondents perceive the existence of GBV
in slightly higher percentage than women miners. While the existence of GBV is admitted
the level seems suppressed and could be the tip of the iceberg. It seems appropriate to
institute mechanisms for protection of women from GBV. Among negative norms against
the involvement of women in mining are limiting women’s role to domestic matters and
restricting the participation of women in mining. There are perceived skill gaps in some
regions (Gambella and Beishangul). The most potent inducement for involvement in ASM
is the opportunity to get “better income as compared to other local activities”, which is
closely related to “luck of alternative livelihood”. The dictates of creating equal
opportunities to all necessitates removal of traditional norms and skill gaps to enable them
exploit better income that other local activities do not offer for women and to cope up with
the “luck of alternative livelihood”. As a negative effect of ASM, “increasing school
dropouts” stands out as the most frequented response followed by “Physical damage on
children”, “Proliferation of sex work”, “Drug and alcohols addiction”, “conflict”,
“Displacement”, which are social problems that all call for some intervention. The level of
awareness of artisanal operators on the environmental effect of artisanal mining is low,
although the extent of awareness varies with the type of miners. MSE miners have more
percentage of aware members than unaware members.
The survey indicates that more than half of all the miners across regions (55%) have
experienced sickness. The most prominent sickness is malaria, remotely followed by
waterborne diseases. The use of protective devices is not the norm and little percentage
of the miners use protective devices. The overwhelming majority of the operators do not
regularly get their health status inspected as there was no organized body for inspection
and monitoring of health status in their localities. The sector requires more focus in
providing health services, miners health and equipment inspection facilities. The following
are recommended measures to bring about positive changes to the ASM and small scale
mining sector.
Production and technology related

• Facilitation and provision of improved gold mining and processing technologies
• Providing Technical and entrepreneurship trainings to ASM and small scale
operators.
• Availing credit lines and creating access to formal credit
37
Market related
• Enhancing access to markets to miners (making markets nearer to miners)
• Addressing sellers’ preferences by making transactions at the mining site,
providing advances or lending money to the miners/sellers.
• Improving the availability and accuracy of weighing and quality testing facilities
• Standardizing prices and providing price information
• Addressing the selling difficulties for miners associated with quantity thresholds.
Legal and institutional matters

• Modify the regulations or create awareness about the existing ones.
• Organize documentations on mining in terms of proper mineral prospection,
exploration, feasibility study, archive data etc.
• Provide working manuals and guidelines for artisanal and small-scale gold miners.
• Harmonize cross-regional issuance of licenses, the validation period of the
licenses and royalty and income taxes, the activities of stakeholders (mining
bureau, trade bureau, environmental protection bureau, etc.)
• Build capacity of government stakeholders at regional, zonal and woreda levels
and avoid political assignment of administrative bodies that lack know how on
mining.
Social and environmental issues

• Attending health and safety issues of miners, particularly regarding malaria,
waterborne diseases, and lack of protective devices, provision of health status
inspection facilities and miners equipment inspection facilities.
• Addressing environmental issues through environment-friendly technologies and
enhanced environmental awareness among artisanal and small-scale gold miners.
• Assist women to have a better role in mining.
• Provide improved protection for women against possible GBV
• Protect children in mining localities from dropping out from school and from
physical damage
References
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mining operations on economies and livelihoods in Low-to Middle-Income
Countries. UK Department for International Development, London.
Biryabarema M. (2019). The potential for beneficiation of industrial minerals in Rwanda.
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content/uploads/2019/01/Biryabarema-2019-final-report.pdf)
Childs, J. (2014) ‘From 'criminals of the earth' to 'stewards of the environment': The social
and environmental justice of Fair Trade gold’ Geoforum, 57, pp. 129-137.
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EEITI (2015) Artisan Mining Operation Its Economic Values, Ethiopia
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brief_updated.pdf)
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39

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Final report ETH-21156 July 2022

1.1. Background and Objective

In the report by Hentschel et al (2003), it is generalized that artisanal and small-scale

Several sub-Saharan Africa economies (e.g., Mozambique, Liberia, Sierra Leone,

1.2. Data and methods

Table 1: distribution of population of organized and individual gold miners by regions

The quantitative data analysis includes descriptive statistics on individual characteristics

Table 2: Background information of miners (in %) by types of miners

2.2. Technological aspect of gold mining

Table 3: Tools and mining machines in gold mining

83.3 85.3 82.4

INDIVIDUALS SMES COOPERATIVES SSSM TOTAL

Figure 1: utilization of machines/technologies in gold mining/production and processing

Table 6: share of gold miners using gold processing machines (in %)

Table 7: Ownership or rental of gold processing machines (in percent)

Table 8: Cost of acquiring gold processing machines

83.3 79.4 80.9

Individual miner Coop Member MSE Member Special Small Scale

Percentage of miners using machine in gold mining or production

Figure 1: Future Demand for Technology by Miner Type

1.7 2.0 4.0 1.6

Individuals SMEs cooperatives SSSM Total

2.6 1.7 0.7 0.0 2.6 1.6

Oromia Gambella Benishagul Gumuz South West Total

AVAIABILITY OF EXTENSION SERVICES AT WOREDA LEVEL (YES %)

Figure 5: Availability of woreda/kebele level mineral extension services (share in %) by region

Individuals SMEs cooperatives SSSM Total

11.0 0.0 6.8 19.8

Oromia Gambella Benishagul Gumuz South West Total

Table 9: Type of training received by regions

Duration of training (in days) Freq. Percent

Table 11: Reasons for not receiving training

2.3.1 Outputs and Inputs

Table 12: Gold production related issues

Individual miners SMEs cooperatives Special Small Scale Total

Table 13: production sharing modality and arrangements (share in %)

Table 14: Experience in gold mining and access to land

Figure 3: Sources of inputs (in %) by types of m

Individual miners SMEs cooperatives Special Small Scale Total

Access to credit and saving

Figure 11: Reasons for lack of access to credit (share in %)

Machinery use, production level and productivity

0 200 400 600 800 1,000

Figure 12: Machine use and gold production by type of miners

Table 19: Estimated productivity response to use of machines in gold production

Source: survey data, March – April, 2022

2.3.2 Marketing and sales of gold

Individual miners MSEs Cooperatives SSSM Total

Oromia Gambella Benishangul-Gumuz South West Total

Source: survey data, March – April, 2022

Accepts small quantities below the bank threshold 43.0

Average price Minimum price

Average price Minimum price

Challenges of marketing and sales of gold

2.4 Legal, institutional and organizational aspects of gold mining, processing

2.4.1 Perceptions of miners on existing rules

2.4.2 Institutional and organizational aspects of gold mining, processing and

2.5 Social and Environmental aspects of gold mining and processing

2.5.1 Gender, child labor and community issues in gold mining