GEF Global Opportunities for the Long-term Development of the Artisanal and Small-Scale Gold Mining sector – GEF GOLD

Adverse effects on human health Background: Mercury Adverse effects on human health Mercury Vapor damages nervous system, kidneys; causes insomnia, tremors, depression, gum disease Methyl Mercury - Minamata disease causes severe neurological damage, ataxia, muscular atrophy, contraction of visual field, speech impairment, tremor, hearing impairment, mental disorder, infertility, spontaneous abortion or severe birth defects But before we talk about Gold, we need to talk about a different element…Mercury. Prolonged exposure to mercury is associated with a whole host of health complications, including organ damage, depression, neurological damage, fertility problems and severe birth defects In 1956 the City of Minamata Japan experienced a devastating episode of mercury poisoning…the terrible disease of methylmercury poisoning is named after this city, as well as the Convention to protect humans and the environment from mercury releases, which entered into force in August of this year and convened its first Conference of Parties in Geneva last week.

Mercury releases from the sector Mercury use in ASGM Mercury releases from the sector What is the largest souce of mercury releases in the world? Small Scale Gold Mining. During amalgamation, mercury is added to the whole ore grinding process to amalgamate small particles of gold…and in this process, to produce 1 kilogram of gold, 30 kilograms of mercury will be released into waste waters. This mercury has the potential to be transformed into methyl mercury through reactions with plants and bacteria. Then the gold-mercury amalgam is eventually burned, and mercury is released into the atmosphere…and at this stage, producing 1 kilogram of gold will release 1 kilogram of mercury vapor into the atmosphere. Why are artisanal, small scale miners still using mercury? It’s cheap, easy to use, Its readily available –even in remote locations And the returns are immediate…mercury based production methods yield gold on a daily basis During amalgamation During burning of the amalgam

Unique employment opportunity for rural population Mercury use in ASGM But ASGM is also… Unique employment opportunity for rural population Possible to do in a safe, environmentally friendly way When well managed, a means of poverty alleviation But artisanal, small-scale gold mining need not have devastating impacts on human health and the environment. For about $80,000 –or the cost of 2 kilograms of gold– miners or rather, associations of miners, can invest in safe, clean gravimetric techniques which actually produce greater gold yields than mercury proccessing. There is an opportunity to shift the artisanal small scale gold mining sector from dangerous or “dirty gold” as the President of Guyana said last week at the Minamata Convention COP…to “clean or safe Gold” In adopting clean, safe gold processing practices, The GEF GOLD Partnership believes that the artisanal small scale gold mining sector can contribute to poverty alleviation and healthy, sustainable livelihoods.

Integrated Sound Management of Mercury in Colombia’s ASGM Sector Global knowledge management and exchange of child project results through networking and outreach activities Contribution toward the elimination of mercury and improvement of the gold value chain in the artisanal and small-scale gold mining sector Integrated Sound Management of Mercury in Colombia’s ASGM Sector A supply chain approach to eliminating mercury in Guyana’s ASGM sector: El Dorado Gold Jewelry – Made in Guyana Integrated Sound Management of Mercury in Indonesia’s Artisanal and Small-scale Gold Mining (ASGM) or ISMIA Integrated Sound Management of Mercury in Kenya’s ASGM (IMKA) Contribution towards the elimination of mercury in the ASGM sector: from miners to refiners Environmental Sound Management of Mercury in Artisanal Small-scale Gold Mining in Peru This is an overview of the GEF GOLD program: It includes a GEF Grant of US$45.5 million with US$136.2 million co-financing Its working on the ground in 8 countries: Burkina Faso, Columbia, Guyana, Indonesia, Kenya, Mongolia/Philippines and Peru. In addition, each child project contributes to a global knowledge management, coordination and outreach platform…the 8th child project at the top which is critical in reaching the private sector. The GEF GOLD Program Concept was approved by GEF Council a year ago…the eight child projects are under development and will start coming in for circulation to Council & CEO endorsement by the end of the year

2. Access to finance and access to markets GEF GOLD Components – Involvement of the Private Sector 1. Formalisation 2. Access to finance and access to markets 3. Technology Transfer 4. Knowledge Management and Communication Each of the country based projects has the same general structure: Component 1 is about Formalization –Different countries may implement different actions, but they will all work, in Component 1, to organize and legitimize the ASGM sector in the countries. Miners associations will be formed and strengthened…a process that we’ve seen happen in the farming, forestry and fisheries sectors the past 20 years. 30% of the GEF grant is devoted to component 2, which has 2 purposes: first, the project will facilitate private sector support for groups or cooperatives of artisanal small scale miners to access finance for clean, gravimetric gold processing technologies. And then secondly, this component will help miners with more direct access to international markets for the ‘clean’ gold they are producing. Component 3 will demonstrate clean, efficient, non-mercury based gold production techniques in the 7 country-based child projects Component 4 will look at experiences and lessons learned at the national level and feed these into the larger global process. I want to talk a bit more about component 2 on Access to Finance & Access to Markets

Current ASGM Supply Chain Domestic ASM International 10 Miners 70% 80% 90% 95% 98% 99% LBMA On Site Buyer Region Buyer Exporter Intern. Trader Refiner 30 Miners 5 Miners 10g 1kg 10kg 50kg 100kg To understand what the GOLD Program is trying to do, let me first explain a bit about the standard ASGM supply chain. You’ve got individual and occasionally groups of ASGM miners who process their gold using mercury…who sell to an onsite buyer, who sells to a regional buyer, who sells to an exporter, who sells to an intermediate trader, who sells to a refiner…who sells to the LBMA. Along the bottom you can see the volumes of gold moving through these transactions and along the top you can see the cumulative revenue. 1000kg LBMA = London Bullion Market Association…largest gold trader > 500,000 kilos of gold/day

Expected ASGM Supply Chain GEF GOLD Expected ASGM Supply Chain Domestic ASM On Site Buyer Region Buyer Exporter Intern. Trader Refiner 70% 95% 99% LBMA 100g 1kg 10kg 50kg 100kg 1000+kg 10 Miners 30 5 International 90% Private Sector supports ASGM associations to access ‘clean’ gold production technologies Jewelry Electronics Computer and other Private Sector entities create & access market for ’clean’ gold So the GEF GOLD Program will work to organize and formalize these miners into associations. And the project will facilitate private sector investment so that these associations can access ‘clean, safe’ gold production technologies. The GEF GOLD program expects to shorten the supply chain…by removing some of the middlemen and providing miners with closer, more direct access to international markets. You can see that greater revenues are expected to accumulate at the level of the miners associations. And very importantly, private sector partners come in by playing a significant role in creating, accessing and strengthening the market for clean, safe gold. LBMA = London Bullion Market Association…largest gold trader > 500,000 kilos of gold/day

CORPORATE PERSPECTIVE ON SUSTAINABLE COMMODITIES GEF 7 REPLENISHMENT MEETING Addis Ababa Dr. Helen Crowley Head of Sustainable Sourcing Innovation, Kering 4 October 2017

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