Large-scale gold mining requires capital, expertise and the capacity to effectively manage risk. Unlike large-scale mining, artisanal mining has few barriers to entry; it requires very little capital, virtually no expertise and no capacity to manage risk. It is the low threshold to entry that makes it attractive to many and also makes the ASM sector problematic. The difficulties in working with the ASM sector are many. The sector is highly inefficient in gold recovery rates, so it does not operate at optimal profitability. An additional challenge of working with the ASM sector is that many, if not most, are located in countries with poor infrastructure, insufficient governance and high rates of poverty. This results in environmental, social and economic problems.
The environmental problems include:
- Water siltation, which leads to problems with drinking water for local villagers and problems with fishing
- No landscape rehabilitation
- Loss of organic layers of soil
- Lack of tailing disposal management
- Deforestation
- Water contamination with metals, oil and gasoline
- Mercury and cyanide pollution
- http://www.internationalpeaceandconflict.org/profiles/blogs/franchising-and-artisanal-miners#.UOa4ZOT4IVA
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