The potential consequences of illegal mining, including health and safety, environmental, and social and socioeconomic impacts, are significant.

The potential consequences of illegal mining, including health and safety, environmental, and social and socioeconomic impacts, are significant.

It is an unfortunate reality that, often, illegal miners take the most risk when they extract minerals, working under “appalling conditions” often exposing them to toxic materials, but receive the least benefit, says global multinational law practice Eversheds Sutherland mining and infrastructure headWarren Beech.

Typically, the syndicates, which are least exposed to direct risk, but drive demand, benefit the most. Socioeconomic conditions are the main driver of illegal mining. Until socioeconomic factors can be addressed, there will always be an opportunity for illegal mining, he adds.

“Once this reality has been accepted, real conversations about formalising and integrating small-scale, artisanal and illegal miners into mainstream mining – with a strong focus on compliance – can begin. Formalisation will require the small-scale and/or illegal miners, and large-scale miners to work together to support the growth, development and transformation of the small-scale, artisanal and illegal mining subsectors.”

Beech adds that, in this formalisation process, the Tanzanian government will need to implement systems and laws to facilitate smaller miners while acknowledging that, in some respects, smaller miners cannot achieve compliance.

However, “there are certain aspects which should be non-negotiable, such as compliance with environmental laws,” says Beech.

He notesthat Tanzania’s unique historical mining industry, which was focused on small-scale and artisanal mining, together with the illegal mining that has taken place, has created a legacy of concern, specifically in relation to environmental impacts, and health and safety.

Environmental compliance is complex and requires the dedication of human and capital resources to ensure compliance with domestic and international law, Beech comments.

“Recent major environmental disasters, such as the Brumadinho tailings dam collapse at Brazil major Vale’s Córrego do Feijão iron-ore mine in January 2019, which resulted in devastating consequences to the environment, people and structures, once again highlighted how fragile a seemingly well-run mining operation can be.”

Further, Beech highlights that there is a growing global trend towards the enforcement of the “polluter pays” principle, which has significant financial implications for mining companies. Regulators are prosecuting the decision-makers and the mining companies.

“For example, in South Africa, the prosecution of British Petroleum for environmental damage and non-compliance has made companies stand up and pay attention. The move towards circular and green economies is also gaining momentum and is being implemented or encouraged through various mechanisms.”

This includes decisions by major investors to divest from “dirty minerals” such as coal. The failure by mining houses to obtain the social licence to mine will be a major disruptor, he comments.

“Tanzania will be faced with having to align its local aspirations for growth, development and transformation with the desire to make the world a better place for future generations,” concludes Beech.