When you think of the world’s mining nations, you probably don’t think of Mongolia. But whether you think about large-scale open-pit mining or small-scale artisanal gold mining, Mongolia is now a mining power.
Rio Tinto’s Oyu Tolgoi open pit mine sits on one of the world’s largest-known copper and gold deposits, and is the world’s fourth largest copper mine. It is the largest industrial complex ever built in Mongolia, could run for 50 to 100 years, and will account for 30% of Mongolia’s gross domestic product. Open pit mining began there in 2011 and processing ore into copper concentrate began in 2013.
The other massive mining project in Ömnögovi, a mineral-rich province in the South Gobi, is Tavan Tolgoi, which mines coking coal that is primarily shipped next door to China. Two decades ago, NPR reported in a special series, Ömnögovi has gone from being Mongolia’s least populated province to being the destination of choice for people who are looking for work.
I didn’t know any of this before I came across an article about how the Swiss worked with artisanal gold miners in Mongolia to turn it from an unregulated activity into one that is a recognized and regulated one, in a fascinating article about mountain development that was posted on a site about the Carpathian Mountains.
Mongolia, which sits between China and Russia, was a centrally-planned socialist republic, a satellite of the Soviet Union, until 1990, when a market economy and a multi-party system was introduced. In 1992, it approved a new constitution. The changes have not been easy for most people.
Mongolia is known as the “Land of the Eternal Blue Sky” because it has over 250 sunny days a year, says Wikipedia. Most of the country is hot in the summer and extremely cold in the winter, with January averages dropping as low as −30 °C. Cold, heavy air from Siberia collects in river valleys and low basins.
But terribly severe winters known as ‘dzud’ decimated herds three times between 1999 and 2002 and again during the 2009-2010 winter, all against the backdrop of a devastating drought linked to climate change,” reported NPR. “The 2009-2010 dzud alone killed 22% of the nation’s livestock.” Many people left rural areas for the capital, Ulaanbaatar.
It was the dzud that first brought the Swiss Agency for Development and Cooperation (SDC) to Mongolia in 2001. It first brought humanitarian aid – food and clothing, food for animals, and shelters for the homeless poor. Then, wanting to cut the administrative costs of aid, it introduced cash support programmes for herders, paid through local banks, which provided beneficiaries with cash grants which they could spend as they chose. More than 7,600 herder families benefited from the Cash for Herders Projects.
As Mongolians struggled to survive, artisanal and small-scale mining (ASM) surged, involving up to 100,000 Mongolians and supporting more than 15% of the population. But the way it was done brought widespread opposition from the public and the state due to rudimentary mining methods, serious environmental impacts, tax evasion, an illicit minerals trade, and dire safety conditions. The state tried to halt ASM by force, arresting miners and taking their equipment.
And so the SDC changed its focus away from addressing the emergency situations towards broader development cooperation. In 2005, it launched the Sustainable Artisanal Mining (SAM) project to integrate ASM into the formal economy. In 2014, the project strategy shifted towards a rights-based approach.
The project also worked to make the gold supply chain transparent and formal, aided by the Fairmined organization which certifies that gold has been sustainably mined. This process, developed by the Alliance for Responsible Mining, is similar to certification processes for conflict diamonds and sustainable fisheries.
SDC contributed CHF 10 million to the SAM project between 2005 and 2014, allocated to training and advising ASM producers and supporting the government in developing successful strategies to formalize artisanal mining.
As a result, more than 7,000 miners are now working formally, under agreements between local ASM organizations and the local government. They are registered for social and health insurance, and pay taxes. In 2014, the average monthly income of formalized ASM gold miners was 18% higher than in 2013.
Thanks to SAM support, the Duush Mandal mining organization, located in Selenge province, will soon start selling Fairmined gold, after having reached certification with the Fairmined standard in December 2019. The organization was formed in 2008 with the goal of formalizing the miners’ work. “Our goal is to develop artisanal mining that is environmentally friendly and socially responsible, along with the creation of sustainable jobs and income for the local community.”
One of Duush Mandal’s greatest achievements was significantly improving safety on the mining site and training its members to develop small formalized mining. With support from the Artisanal and Small Scale Mining National Federation of Mongolia, it hopes to continue improving miners’ working conditions, income and quality of life.
Investing in Sustainable Mountain Development Opportunities, Resources and Benefits. Centre for Development, University of Bern, 2016.
Fairmined gold offer increase in Mongolia. Fairmined.
Sustainable Artisanal Mining Project. Swiss Agency for Development and Cooperation.
Oyu Tolgoi. Rio Tinto.
Changing Mongolia. Three-part series. NPR, 2019.