The discovery of gold in the U.S. state of California in the mid-19th century led to a gold rush that was accompanied by mass migration. While the gold deposits were primarily located on “public land,” there was no enforcement of these rights, making the gold free for the taking.

However, the first arrivals, who became claim holders, were later challenged by so-called claim jumpers, leading to instability. Violent clashes were common between settlers, miners, and Indigenous people, precipitating the dispossession and murder of the latter.

The gold rush and its aftermath helped foster an evolution in the country’s mineral rights, which retain a distinctive feature of private ownership of subsurface resources. That is in sharp contrast with the rest of the world, where states typically own mineral resources and control extraction, including licensing.

In the United States, the ownership structure allows individuals or entities to lease or sell mineral rights. This aspect of the U.S. mineral rights legal framework has radically different implications compared to other countries on how individuals engage with mining.

Today, from Brazil and the Democratic Republic of Congo to Sudan and Indonesia, a new gold rush is spreading. But unlike the Californian gold rush, no accommodation is made for artisanal miners who exploit subsurface resources owned by the state. Artisanal mining—small-scale extraction done with minimal equipment or capital investment—is thus illegal in most countries, and to combat it, many governments are now resorting to coercion. That strategy is leading to a cycle of violence and counterviolence.

Indeed, many internal and interstate conflicts around the world—especially in Africa—are fueled by this new gold rush.

The rise in artisanal mining has come at a time when the metal’s value is skyrocketing. Gold prices have increased sixfold since the end of the year 2000, reaching almost $2,900 per ounce in late February amid geopolitical tensions and rising inflation.

Gold has been used by humans for thousands of years in the form of money and jewelry. The glittery and malleable properties of the metal have helped to reinforce its economic properties as a store of value and a safe haven for investors.

More recently, galloping inflation has fostered demand for gold as a hedge, especially from central banks around the world. What’s more, the threat of sanctions has led many central banks to significantly boost their accumulation of gold reserves.

Artisanal gold mining is a dangerous activity that typically relies on rudimentary techniques to separate gold from ore. Poisoning—associated with the use of mercury and cyanide, respectively, to collect particles and extract gold—is commonplace in artisanal mining, given the absence or lack of enforcement of safety standards.

These miners typically exploit unregulated mines with poor ventilation, inadequate tools, and insufficient planning. As a result, the risk of mine collapse is frequent, in turn leading to injuries or even the deaths of artisanal miners, which recently occurred when an illegal mine collapsed in Mali in mid-February, killing 48 people.

The rest of the world’s gold supply is produced by large-scale operators—namely state-owned and multinational corporations. These players often clash with artisanal miners which can threaten the bottom line of multinational corporations. The latter are often determined to preserve their small-scale mining as an essential source of livelihood for their communities.

But illegal mining is often associated with crime and violence. Attacks on large (and legal) operators have become a major impediment to their extraction activities. There are, however, situations where illegal miners work alongside the legal mining companies. For instance, Congolese human rights expert Amani Matabaro Tom reports that Chinese companies in the South Kivu province in the Democratic Republic of the Congo run hundreds of artisanal mines lacking government approval.

Meanwhile in South Africa, the government’s clampdown on illegal mining culminated in a tragic standoff at the end of 2024, when the governments refused to rescue miners from an illegal operation who were trapped in the Stilfontein mine outside of Johannesburg, leading to 87 deaths.

In Chad, most mines are illegally operated by artisanal miners. The military has tried to stop the operations and suspected smuggling through the borders with Libya and Mauritania.

In Sudan, the two rival factions fighting a bloody civil war—the Sudanese Armed Forces and the paramilitary Rapid Support Forces—both control major gold mines with foreign interests from the United Arab Emirates and Russia. The two factions use the proceeds to fund their arms purchase and fight the war.

In Brazil, the government has been using forensic technology to trace the origin of gold and crack down on the illegal trade of gold from mining sites in the Amazon rainforest.

The prospect of a new bonanza in developing and emerging market economies has rekindled gold exploration efforts. Indeed, governments that stand to benefit have shown greater openness to investment in exploration, especially by multinational corporations. This has stimulated waves of discoveries of gold deposits around the world.

Artisanal miners have understandably attempted to get a piece of the action. As a result, the World Gold Council estimates that artisanal mining now generates about 20 percent of world’s gold supply and involves an estimated 20 million people who primarily derive their livelihoods from these operations.

The environmental and health damage caused by artisanal mining—as well as a potential link to terrorism financing, fueled by gangs or governments abusing artisanal miners—have justified governments’ action to preempt artisanal mining.

But there is more to that backlash that meets the eye. Indeed, distrust of governments and multinational corporations alike has contributed to the boost in artisanal mining. In other words, artisanal mining could be seen as a way for local communities to appropriate a share of the gold profits that would otherwise be usurped by what they view as the collusion between governments and multinational corporations.

The use of force against artisanal miners is not the answer. To end the cycle of violence, governments need to adopt a more inclusive approach to artisanal mining. Formalizing these operations might be the answer.

Take the example of Malawi. The state has facilitated artisanal mining by allowing small-scale operations to be granted mineral permits, mining claim licenses, and reserved mineral licenses. Outside of gold mining, Nigeria has indigenized onshore oil production by providing concessions to locals. That has helped limit theft and disruption especially in the Niger Delta, where violence was rampant.

Letting the artisanal mining situation fester could be damaging.

Instead, the benefit of bringing artisanal mining out of the shadows could be dramatic. For instance, in countries where the practice is widespread, it often coincides with other tensions between central governments and subnational entities—which are more inclined to tolerate artisanal mining—over the appropriation of revenues from mining between the two levels of government. Central governments thus need to find the right balance for revenue sharing between different provinces and themselves in order to reduce internal tensions.

A more inclusive approach to artisanal mining would not only build trust and limit conflict, but also help governments address issues linked to health and environmental damage. The weak enforcement of environmental and social standards in the industry could also be addressed by formalizing artisanal mining.

Furthermore, as the debate rages over allegations of forced labor and the subsequent boycott of minerals emanating from zones of conflict such as the eastern Congo, formalizing artisanal mining would likely strengthen tracking of the origins of so-called blood minerals—and hopefully help governments to limit the backlash.

The new gold rush could be a catalyst for democratizing mining and spreading the wealth from its proceeds. As with the 19th century gold rush, which triggered the evolution of mining rights in the United States, governments today must seek a balance between large scale and artisanal mining.

States need to get their fair share of revenues from large-scale extraction of gold and attract investment in processing domestically. To do so, governments must be transparent about their dealings with multinational corporations as well as the ways that the proceeds from extraction licensing to multinationals are spent.

At the same time, governments ought to distribute mining rights to communities by formalizing artisanal mining to ease tensions and stop the spread of violence.

Source: Foreignpolicy.com

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