Mining Institutions

10. Mineral buying centres and mineral marketing companies

Many countries in the developing world have a large artisanal and small scale mining sub-sector. Governments that have not developed their larger-scale mineral resource projects rely on this sub-sector to produce most or all of the country’s mineral production. However, a number of these governments have also been concerned about some of the more negative aspects of artisanal and small scale mining activity. Many minerals produced by the illegal trade of artisanal and small scale mining products cross borders illegally. Many poorly educated, and less informed small scale miners are exploited by traders and not paid fairly for their products.

Two countries in West Africa, Nigeria and Cameroon, rely heavily on this sector to produce mineral revenue. The two countries are very wealthy in oil and gas resources, and have tended to focus on the development of these resources rather than on large-scale mining. Things are changing, however, and both countries have been focusing on developing large scale mineral resources, also. But for decades, small scale gold miners have accounted for the largest percentage of mineral production in Cameroon, and the small scale miners in Nigeria have produced industrial minerals to support many domestic and export industries.

In a bid to reduce illegal trade, ensure that small scale miners are legalised and supported, and to provide rural employment, some governments have planned to create institutions that provide a place for the small miners to sell their products and to receive fair payment. Mineral Buying Centres have existed in Nigeria for many decades, but they mostly run by the private sector. Government has recognised that they need to be running these, also, to fill their institutional mandate to support this sub-sector. Miners bring their products to a central buying institution where their products are weighed in front of them. The price is determined on a global spot price basis that is accessed online at the time of sale. The MBC then pays the miner and sells the product onward. Sometimes the MBC processes the minerals into a more saleable product. This increases the value of the product and the miner will receive a higher price, although he has to pay something for the processing.

As described earlier, Cameroon has CAPAM, a government institution that provides a support service for artisanal and small scale miners. It provides training and equipment, facilitates miners getting bank accounts, develops joint ventures and provides a market for products.

In Ghana, there are many small scale gold miners, working beside and sometimes in conflict with  the many large-scale gold mines present as well.  A flourishing gemstone industry is also supported by the government.  Mentioned earlier,  Ghana has set up the Precious Minerals Marketing Company to provide a buying and jewellery making centre for gold, diamonds and gemstones produced by artisanal and small scale miners.