FAIRTRADE & FAIRMINED GOLD

FAIR TRADE CONFERENCE BASELSHOW 2010 – March 19th 2010

Patrick SCHEIN - ARM Board Member

Alliance for Responsible Mining

Size Matters!Small-scale miningSmall-scale mining

Artisanal miningArtisanal mining

Artisanal subsistence miningArtisanal subsistence mining

Large-scale miningLarge-scale mining

Not ASM

Size Matters!

10 km10 km

100 m

Not ASMNot ASM

Size Matters!

… in all developing countries, where poverty persists

Artisanal Small Scale Mining (ASM): Where?

Source: CASM / World Bank

ASM Gold : Facts & Figures– 10-15M miners => +60M people indirectly– 90/10 ratio (volume to workforce)– In 50 developing countries– Generating 200-300 MT of Gold (5-8 BN$)

(8 to 12% world mine supply)– Low Mechanization => Very High local

economic value index compared with LSM => Guinea example:

• 1 mine produces 8 MT with 2.708 direct workers and high technology

• 200 000 ASM miners population produces 7MT of Gold with no mechanization

“HAND MADE GOLD”

– Offers an opportunity for growth and an escape from poverty

The Answer: THE 1ST EVER INDEPENDENTLY

CERTIFIED RESPONSIBLE ASM GOLD IN THE MARKET

Why Fair Trade?‣ It directly raises awareness of consumers and

campaigns for changes in the rules and practices of conventional international trade.

‣ Economic incentive for positive transformation: TRADE NOT AID – It’s a Business Model

‣ Allows access to differentiated markets

‣ Recognizes change is a process: minimum and progressive requirements

‣ Long term vision

‣ Pays a fair price

‣ Pays a FT premium to producers

‣ Ensures traceability

‣ Ensures community development & environmental sustainability

‣ Bottom up, democratic & transparent processes

Main Standards Requirements

• Fairtrade/Fairmined Gold is exclusively available from ASM

• Minimum requirements and progressive improvements

• Miners must be formalised and ORGANISED

• Legal mineral rights are a must

• Requires consultation and consent of local community authorities, and grievance mechanisms to be in place

• Payment of all taxes and royalties - accounts on top

• No support to illegal activities or armed conflict

• Management of toxic substances (no whole ore amalgamation – obligatory use of retorts)

• Strict health and safety requirements

• NO child labour

• Rights for women miners

• Physical traceability within the production and mineral processing links

FAIRTRADE & FAIRMINED GOLD‣ First ever third party independent certified Gold

to bring social, environmental & economic development in ASM mining communities

‣ HISTORIC partnership between FLO and ARM.

‣ ARM developing Supply/FLO creating Demand ‣ => Joint HALLMARK: FAIRTRADE &

FAIRMINED

‣ Shoppers believe buying jewellery for special occasion holds greater significance if it carries FAIRTRADE & FAIRMINED hallmark

‣ Minimum price for the Miners: 95% of LBMA

‣ Social Premium: 10% of LBMA price + 5% for Ecological Gold (no chemical use and strict restoration requirements).

‣ Pre-financing : 60%

‣ TRACEABILITY

FAIRTRADE & FAIRMINED GOLD

‣ Safe use and responsible practices of toxic chemicals with reduction commitment and elimination where possible over time

‣ Contributes to peace-building in violence and conflict aera

‣ Piloted with 9 legally established producer organisations with mineral rights in LATAM representing 350kg/year production

‣ pilots expansion plans in Africa in 2010

‣ Initially launched in the UK and then rolled out to other countries

‣ Vision: capturing 5% of the Industrialized jewellery market

THANK YOU

www.communitymining.org