January 15 marked a milestone for more than 300 artisanal miners in Bayankhongor aimag when the XAMODX NGO became the first miners’ organisation in Asia to be granted Fairmined certification in acknowledgment of the environmentally sustainable and safe mining practices they have adopted.
“It took almost three years for us to prepare and meet the requirements of the Fairmined certification,” said XAMODX NGO head Ch. Otgonbaatar. “It was hard work for all of our miners. Everyone tried hard and made a contribution to be acknowledged as responsible miners. We are very proud to be certified as fair miners.”
Fairmined gold is gold extracted by artisanal and small-scale miners certified under the Fairmined Standard by the Alliance for Responsible Mining, an international non-profit organisation recognised throughout the world as both a pioneer in, and a leader of, the promotion of responsible artisanal and small-scale mining.
The XAMODX NGO, from Tsagaan Tsahirt in Bayan-Ovoo soum, joins four other organisations in receiving the Fairmined certification, most of which hail from Latin America.
“The Fairmined gold from Mongolia’s artisanal miners will be the first ecological gold from Asia on the global market,” said Patience Singo, the International Director for SDC’s Sustainable Artisanal Mining (SAM) Project in Mongolia.
“This means the miners from this community are guaranteed a minimum price that is not lower than 95 percent of the London Metal Exchange fixed price. In addition, they can access to the premium of the ecological gold, which is an additional USD 6000 per kilo - an incentive to the community of miners to further develop responsible mining or support their social and environmental development for the benefit of its members.”
There is growing demand for, and interest in, ethically mined gold for jewellery in western markets for which jewellers are willing to pay a higher price.
Mr Singo said a number of top brand western jewellers had already expressed interest in sourcing gold from Mongolia if it was mined ecologically.
In order to tap into western jewellery markets, the Mongolian artisanal miners will have to establish a trading company that can negotiate such deals. In this regard, the XAMODX NGO is working on setting up a cooperative that has the legal capacity to deal with international markets and trade.
“We are keen to witness the historic moment when Mongolia’s artisanal miners export their ecological gold to the world market,” Mr Singo said. “This is not that far off, I believe.”
The Alliance for Responsible Mining support Fairmined certified miners, facilitating their access to ethical markets and is working to mediate international trade deals with Mongolian miners’ organisations.
Greater recognition for artisanal miners
The benefits of Fairmined certification are not limited to higher gold prices and premiums; perhaps the greatest advantage is the recognition it gives to Mongolia’s artisanal miners - a sector that, until recently, was scorned and despised by society for their environmental damage and derogatively labelled “ninjas”.
“As we started to take responsibility for our mining operations, attitudes within our community and our society have changed,” said former XAMODX NGO head L. Byambadorj. “They no longer see as threats to their community and wellbeing, but rather as partners and contributors to the development of our community.”
The turning point for the XAMODX NGO came in 2011 during a study tour to then Fairtrade-Fairmined-certified Cotapata mining site in Bolivia. Understanding the benefits and recognition that came with certification, Byambadorj returned to Mongolia determined to mobilise his fellow miners in making it a reality for his NGO.
“After I returned from Latin America, I said to my fellow miners that the environment is number one for our work,” he said.
From that moment on, their environmental efforts took precedence. They erected proper toilets outside their mining settlement, established a garbage disposal point to ensure environmental hygiene, and organised regular mass cleanings in their settlement area. Most importantly, they ensured that no miners used toxic chemicals such as mercury - a practice banned in Mongolia given the threat it posed to artisanal miners and surrounding communities.
In addition, the SAM Project supported the construction of a mercury-free ore-processing plant in Bayankhongor aimag which XAMODX NGO miners use to safely process their gold.
“We ensured the traceability of the gold we produced,” Byambadorj said. “The XAMODX NGO member partnerships register their daily ore production at the mining area, including information on the shaft area, number, coordinates, date of extraction, the number of bags with ore, total average weight, worked hours, number of miners worked and their signature.”
Based on the daily registration sheet, the NGO issues a Certificate of Origin for ore transported to the processing plant, which keeps a record of gold production.
Social development is another important component of Fairmined Certification. The NGO ensures there is no child labour, improved labour conditions and appropriate working hours for its members. It also ensures that all members pay income tax and health and social insurance in accordance with Mongolian law.
“All the gold produced by NGO members has been sold through formal channels. We also ensure that every member receives a fair share of the profits, and we do it transparently,” L. Byambadorj said.
The Fairmined certification is valid for up to 12 months, followed by a third-party inspection to ensure that standards are being maintained. The XAMODX NGO miners are committed to holding on to their certification, and hope they will be an inspiration for other artisanal miners in Mongolia. In turn, the example set by the NGO is a big step towards the formalisation of Mongolia’s artisanal mining sector.
For more information and images, please contact Swiss Cooperation Office in Ulaanbaatar
