Gold Mining and Its Effect on Natural and Socio-Economic Environment. The Case of Oddo Shakisso District, Oromia Region, Ethiopia

Mining Policy Implementation Assessment

Wissenschaftliche Studie , 2018 , 106 Seiten , Note: Masters Program graduation

Ingenieurwissenschaften - Bergbau

The objective of this study was to assess the Ethiopian Mining Policy and its Effect on natural and socio-economic environment in case of gold mining in Dhiba Batte, Reji and Sawana localities of Oddo Shakisso Wereda, Ethiopia. The study examined the real and existing effect of mining activities on the natural and socio-economic environment in the light of environmental friendly and inclusive mining strategy. The study is confined to identifying the effect of gold mining in relation to the mining activity conducted by Midroc Gold Company at Lege Dembi and Sakaro site and three small scale gold mining micro enterprise which were operating in Dhiba Batte, Reji and Sawana.

TABLE OF CONTENTS

Title Pages

ACKNOWLEDGEMENTS iii

TABLE OF CONTENTS iv

LIST OF TABLES vi

LIST OF FIGURES vii

LIST OF ACRONYMS ix

ABSTRACT x

CHAPTER ONE 1

INTRODUCTION 1

1.1. Background of The Study 1

1.2.Statement of the Problem 5

1.3. Reseach Question 7

1.4. Research Objectives 7

1.4.1. General Objective 7

1.4.2. Specific objectives 7

1.5. Scope of the Study 7

1.6. Significance of the Study 8

1.7. Limitations of the study 9

1.8. Organization of the Study 9

1.9. Definitions of Key Terms 10

CHAPTER TWO 11

LITERATURE REVIEW 11

2.1. Introduction 11

2.2. Review of Theoretical Literature 11

2.2.1. Concept of Mining and Sustainable Development 11

2.3. The Effects of Gold Mining on Natural and Social Environment 13

2.3.1. The Effects of Gold Mining on Natural Environment 13

2.3.2. Effects of Gold Mining on Social Environment 16

2.4. The Ethiopian Gold Mining Industry 18

2.5. Observing the practice of Corporate Social Responsibilities 20

2.6. Review of Empirical Studies 23

2.6.1. A Study on Mining site of Canada 24

2.6.2. A Study on Mining site of Ghana 24

2.7. Policy Issues and Legal Provisions put 24

2.8. Conceptual Framework 27

CHAPTER THREE 30

3.1. RESEARCH METHODOLOGY 30

3.2. Research Design 30

3.3. Research Approach 30

3.4.Study Area 31

3.5.Target Population and Sample Size 32

3.6.Sampling Procedure and Sample size 32

3.7.Data Collection Methods 34

3.7.1. Document Analysis 35

3.7.2. Participant Observation 35

3.7.3. Unstructured Interviews 35

3.7.4. Focus Group Discussion (FGD) 36

3.7.5. Questionnaire 36

3.8. Data Analysis 36

3.9. Validity and reliability of instrument 37

3.9.1. Reliability 37

3.9.2. Validity 37

3.10. Ethical Considerations 38

CHAPTER FOUR 39

4. Data Presentation, Analysis and Discussion 39

4.1.Introduction 39

4.2. Analysis of Response Rate 40

4.3.Socio-Demographic Characteristics of Respondents 41

4.3.1. Education Level and Work Experience of Respondents 42

4.3.2. Years of Domicile of Respondents in the Community 43

4.4. Data Analysis and Discussions of the Study 45

4.4.1. Effect of Gold Mining on the Natural Environment 45

4.4.1.1. Forest Distraction and Land Degradation 46

4.4.1.2. Land pollution and Degradation 52

4.4.1.3. Air Pollution in Oddo Shakisso 53

4.4.1.4. Noise pollution in Lege Denbi and Sakarro 55

4.4.2. Effect of Gold Mining on Social Environment 56

4.4.2.1. Effect of Gold Mining on Animal and Human Health 56

4.4.2.2. Business and Prices of Goods, Services 58

4.4.2.3. Tendency to Cultural Disorientation and Social vices 59

4.4.2.4. The Issue of Crime and Crime Rate 60

4.4.2.5. Employment Opportunity Created 61

4.5. Observing the practice of Corporate Social Responsibilities 65

4.6. Conclusions 66

CHAPTER FIVE 68

FINDINGS, CONCLUSSIONS AND RECOMMENDATIONS 68

5.1 Introduction 68

5.2. Theoretical Framework of the Study 68

5.3. Basic Research Findings: 68

5.4. Conclusion 69

5.5. Recommendations 71

5.5.1.Recommendations for Policy Issues 71

5.5.2.Suggestions for Further Studies 72

Annex 1: Budget Plan vii

Annex 2: Questionnaire for Peoples Living Around Mining Site viii

Annex 3 Questionnaire for Team Leaders and Focal Persons of Wereda xi

Annex 4 : Questionnaire Prepared for Midrock Mining Operators and Artisanal Mining Workers xiv

Annex 4: Community Representative Focused Group Discussion Leading Questions xvii

Annex 5: Participant Observation Checklist xviii

List of Figures

Title Pages

Figure: 2. 1. Wet tailings Disposal at a Mine In Peru (Stamp, M., 2015) 15

Figure: 2.2. Acid mine Drainage at Mine in Australian 15

Figure.2.4. Deep under Ground Tunnel Of Sakaro Gold Mine 19

Figure. 2.3. Midroc Underground Gold Mine at Reji Kebele, Sakaro Site, Oddo Shakisso 18

Figure.2.5. Deep under Ground Mining Operation in Sakarro 20

Figure 4.3. Year of Domicile of Respondents 44

Figure:4.4. Sakaro Open pit Mining Area, Reji, Oddo Shakisso 46

Figure: 4.5. Cyanide Contaminated Water Disposed by the Side of drinking water 51

Figure:4.6. Acidic Water and the Belatedly Warning Electrum of Midroc 52

Figure: 4.7. Abandond artisanal Mining Site in Dhiba Batte, Oddo Shakisso 52

Figure 4.8. Dust Air Pollution Around Dhiba Batte 54

Figure:4.9. Children Affected by the Cyanide Contamination in Oddo Shakkiso 57

Figure:4.10. Children Affected by Cyanide Chemicals of Midroc Lege Dembi 58

Figures:4.11. Meaningful Contribution for Employment 62

List of Tables

Title Pages
Model: 2.1. Conceptual Framework 29

Table: 2. 1. Sustainability issues are grouped based on economic, social 13

Table. 4.3. Effect of the Mining Activity on the Natural Environment in Oddo Shakisso 45

Table: 4.4. Natural and Manmade Forests Coverage of Oddo Shakisso from 2005-2009 E.C. 47

Table 4.5. Amount of Rain in Oddo ShakissoWereda in Millimeter Per 48

Table 4.6. Bivariate Analysis of Tailings and Toxic Chemical Disposal 50

Table 4.8. To what extent does the social life of the people affected by the gold mining in the area? 55 Table 4.9.Tendency to Cultural Distortion and Social vices 59

Table:c 4.10 What does the rate of crime look like in the mining area? 60

Table: 4.11. Major Crimes Committed in Oddo Shakiso Wereda by Kebele from 2005-2010 E.C 61

ABBREVIATION/ ACRONYMS

AM

Artisan Mining

CDA

Community Development Agreements

CSA

Central Statistical Agency

EEITI

Ethiopian Extractive Industry Transparency Initiative

FESS

Foundation for Environmental Security and Sustainability

GDP

Gross Domestic Product

ICMM

International Council of Mining and Metals

IFC

International Finance Cooperation

IMDC

International Mining Development Center

IPIECA

International Petroleum Industry Emission Credible Alternative

MCPs

Mining Cooperatives

MoM

Ministry of Mines

OECD

Organization for Economic Co-operation and Development

PAGE

Partnership for Action on Green Economy

SDSN

Sustainable Development Solution Network

SMME

Small and Micro Mining Enterprises

SNNPR

Southern Nations, Nationalities and Peoples Region

UN

United Nations

UNDP

United Nations Development Program

UNEP

United Nations Environment Program

UNESCO

United Nations Education, Science and Culture Organization

ALEL

Adola Lege Dembi Exploration License

EMLD

Ezana Mining Development

EMDSC

Ethiopian Mining Development Share Company

AMC

National Mining Corporation

MEL

Metekel Exploration License

ADB

African Development Bank

FDI

Foreign Direct Investment

QDAS

Qualitative Data Analyzing Software

AMD

Acid Mining Drainage

ILO

International Labor Organization

GTP

Growth and Transformation Plan

Abstract

The objective of this study was to assess the Ethiopian Mining Policy and its Effect on natural and socio-economic environment in case of gold mining in Dhiba Batte, Reji and Sawana localities of Oddo Shakisso Wereda, Oromia Region State, Ethiopia. The study is confined to identifying the effect of gold mining in relation to the mining activity conducted by Midroc Gold Company at Lege Dembi and Sakaro site and three small scale gold mining micro enterprise which were operating in Dhiba Batte , Reji and Sawana. The study examined the real and existing effect of mining activities on the natural and socio-economic environment in the light of environmental friendly and inclusive mining strategy. In this research the researcher used descriptive and explanatory research design which elaborates the what and the why of the environmental effect of mining activity. He employed mixed research approach, both quantitative and qualitative methods. Data sources for this research were peoples living around mining site and affected by the mining operation, gold mining operators and micro and small sale mining workers and relevant office heads, team leaders and focal persons at wereda and federal level. The quantitative data were collected from administered questioner, direct participant observation and document analysis;whereas, qualitative data were collected through unstructured interviews and ethnographic participant observation. It was identified that the gold mining activity conducted in the selected localities of Oddo Shakisso Wereda by micro and small scale enterprise and Midroc Lege Denbi is categorized more of under old gold mining practice. This is because of mainly the technology they use, environmental safety measures they take and how they address the issue of local community. As a matter of fact, women from the study area are giving birth to a child with congenital abnormalities (birth defect) and miscarriage due to cyanide contamination. Moreover, 159 babies died in their mother's womb. Around 600 livestock and 12 goats and three donkeys have died; 500 live stocks were aborted. There is no planned and progressive environmental rehabilitation and community development activity. Therefore, this traditional /old mining strategy it needs to be decoupled from distraction and base itself on the best theories of mining “The Rogers Theory of change or European Partnership for Responsible Minerals policy Framework” (Rogers, 2014). Which advocates harmonized, modernized and integrated mineral production strategy and also it Should be re-adjusted in line with discrete choice theory of McFadden (1974), which argues that there is a need for community engagement throughout the mine life cycle (exploration, development, exploitation and closure) and at last, it must respect ICMM mining principles.

Key words: sustainability, decoupling mining from destruction, local content policies, social license

CHAPTER ONE
INTRODUCTION

1.1. Background of the Study

The extraction and processing of minerals and metals to provide goods and services essential to human society is as old as human development. Mining is the process of obtaining desirable mineral and metal resources from the earth (Aryee, B.N.A., 2012). This process has been occurring since humans began using stones and metals for tools and minerals for jewelry and trade (Rees, 1985). Minerals and metals have brought huge benefits to society; they are vital commodities that serve as a foundation to society's material quality of life (Ibid., 2012; Worrall et al., 2009).The International Council on Mining and Metals proved that mineral exports can be an alternative for increasing exports for agrarian, low and middle income countries and that in the past two decades its contribution to total exports had increased from 30 to 60 per cent (Prior, T. et al., 2012).

There are approximately 60 developing and transition countries (22 from African and 27 from East Asia) where mining become an important economic activity. These include countries that are important mineral producers in the international marketplace; countries that are modest producers by international standards but where mining makes an important contribution to the regional or national economy, and countries where small-scale or artisanal mining provide significant employment in rural or remote communities. Mining practiced in the context of two generically different forms of mining these are large-scale mining and small-scale and artisanal mining. Both create very different contexts for opportunities and risks that may evolve from the use of natural resources (Stamp, M., 2015).

Large-scale mining generate about 85 percent of the world's nonfuel minerals and more than 95 percent of the world's total mineral production. The industry employs an estimated 2-3 million workers and their families worldwide. In addition, for every job created directly by large mines, between 2 and 25 jobs are created with suppliers, vendors, and contractors to the mine and to miners and their families (Ibid.,2015).

Artisanal and small scale mining generate about 15 percent of the world's nonfuel minerals. Yet is a major source of income in about 30 countries around the world. It provides a livelihood for approximately 13 million workers a significant proportion of who are women and children and their families. This is true particularly in countries such as Bolivia, Brazil, Burkina Faso, China, Colombia, the Democratic Republic of the Congo, Ghana, Ecuador, India, Indonesia, Madagascar, Tanzania, and Thailand. Between 80 million and 100 million people are estimated to depend on small-scale mining for their livelihood worldwide (Stamp, M., 2015). According to the African Union's Africa Mining Vision of 2009, the number of Africans directly employed in artisan and small-scale mining varies between 3.7 and 8 million, implying about 10% to 30% of the population are reliant on the sector. The ASM accounts for 18% of the continent's gold production (Ibid, 2015).

Africa has an estimated 30 per cent of global mineral reserves, where many countries are endowed with world class mineral deposits. Africa is one of the largest world producers of selected mineral commodities. According to a 2014 UNDP report, sub-Saharan African countries have 5 % of the world's oil reserves and 7% of global production (UNDP, 2014).In terms of solid minerals; African countries are similarly endowed with globally important mineral reserves. For instance, Guinea accounts for 8% of world bauxite production; Botswana around 20% of global diamond exports excluding South Africa .Moreover, Africa's top five gold producers include Burkina Faso, Ghana, Guinea, Mali and the United Republic of Tanzania which together account for 9% of gold production, double the share in 2000. In 2010, the Democratic Republic of the Congo accounted for half of the world's production of cobalt, one quarter of industrial diamonds, 14 % of tantalum, and 3% of copper and tin (Anglo Gold Ashanti ,2016).

Ethiopia is blessed with an abundance of natural minerals and resources. The presence of gold and precious stones like gemstone in Ethiopia has long been known since Biblical time, referring to the Queen of Sheba's gift of gold and gemstones to King Solomon of Israel (1Kings 10: 1 - 13) (Rice, G., 1990). Gold is Ethiopia's main mineral export and has been mined since ancient times, primarily as alluvial or free gold. It is considered to possess the most potential for mining investment in the country. Recent Ethiopia's geological formation also showed extensive mineral resources with wide-ranging potentials for continuing development. These minerals includes gold, platinum, niobium, tantalum, nickel, cooper, chrome, manganese, limestone, sandstone, gypsum, clay, lignite, opal, oil shale, laterite iron ore, bentonite, clay, perlite, diatomite, potash, halite, and oil & gas.

Despite a record of mineral activity that dates back to those ancient times and the existence of a wide variety of minerals, the mining and quarrying sector in the country is underdeveloped and its contribution to the GDP has been limited to 5.6 percent in 2014 (Edwards, D.P.et al., 2014).

In the 1990s the Ethiopian government revamped mining law and regulations and began upgrading infrastructure to support mining. In particular, in1993 new mining regulations and the Mining Tax Proclamation were issued. Following the proclamation of mining law which was thought to promote investment in mineral exploration and production in the country; many private and government mining companies were established and entered into the activity. The first private companies joined the sector in 1993 were the National Mining Corporation (NMC) and Ezana Mining Development (EMD). The NMC involved in all facets of mineral and petroleum production including its byproducts, where EMD works in consulting all mining related activities and all types of explorations. The Ethiopian Mineral Development Share Company (EMDSC) is a Government organization formed by the amalgamation of earlier four government enterprises that were established in 2000.TheCompany is engaged in all mining activities in the country(Ethiopian Extractive Industries Transparency Initiative,2016).

The Midroc Gold, a subsidiary of Midroc Gold Group is also in operation at Shakisso town in southern Ethiopia, engaged in gold mining; owned by Midroc (98%) and the Ethiopian government (2%).Midroc Gold is also licensed with two gold exploration projects located near the mine (Adola-Lega Dembi Exploration License - ALEL), and in another area some 600km northwest of the capital Addis Ababa (Metekel Exploration License - MEL). Another advanced gold mining conducted by private company is a project which exists at Tulu Kapi, in the west central area of the country, owned by Nyota Minerals Limited. As of January 2016 there were about 170 licensed companies engaged in exploration and development of gold where 51 percent of the licenses issued to foreign firms while 21 percent are joint ventures. Many foreign and some local companies have been granted reconnaissance, exploration and mining licenses for gold and base metals, cement and ceramic raw materials, potash, diatomite, other industrial and construction minerals. Generally, an exploration license is issued for ten years; initial three years followed by a yearly renewal for seven years (EEITI, 2016).

The researcher could not get the actual data of the number of mining workers employed in the larger mining companies, but about 1,259,910 people are directly engaged in the artisanal mining throughout the country. The number of people depends directly and indirectly on this mining sector can be more than five (5) million. The mining sector also helps the country in revenue generation and improvement of the micro economy(Ibid).

As a part of national deposit, the Oromia Regional State, in its south and south western parts has got a deposit of different types of minerals. However, this study focused on Oddo Shakisso Wereda, Guji Zone,Oromia Region which is regarded to be a grave yard of different mineral deposits. Minerals such as gold, tantalum with resources of more than 17,000 metric tons of world class ore reserve (columbite-tantalite and tantalum metal powder), niobium, lithium, beryllium, high quality ceramic grade quartz, feldspar, kaolin and dolomite, potassium oxide and pumice were known. But recently, a new deposit of high-quality emeralds has been found in the rural villages of Kenticha and Derme, in the adjacent wereda of Seba Boru of the Zone (M.PhilipMobbs ,1998).

Lega Dembi, the largest gold mine of the country, it has been mined by a private company called Midroc Gold. The amount of gold produced by this Company is reported to be about 5 tons per year. In addition, gold mining is also conducted in the area by Adola Gold Development Enterprise and by many Small Scale Artisanal Gold Mining Micro Enterprises(EEITI ,2016).

Exploitation of mineral resources may generate large economic benefits in the short term. But it affects the environment and the socio-economic livelihood of the Community, positively or negatively, immediately or eventually. Environmental challenges of Ethiopia include climate change, soil degradation, deforestation, loss of biodiversity and ecosystem services, and pollution of land, air and water (Tilahun, Abayneh, 2012).Vast areas of land could be cleared for extraction purpose; hollow craters are left after mining may create gully erosion and there could also be the use of toxic chemicals which are detrimental not only to humans and animals but also for the entire ecosystem (IFC/World Bank , 2007). In many cases, negative environmental effects are irreversible. Therefore, unsustainable use of this resource increases environmental degradation, and decreases economic growth and local communities' livelihood opportunities.

As a result, the Earth Summit held in Rio in 1992 concluded that the economic, social and environmental concerns are inescapably interlinked to world development (Sands, P. and Peel, J., 2012).

Environmental sustainability is aimed at enhancing the health and quality of life of all peoples. This is recognized in the constitution and in the national economic policy and strategy of the country. In addition, mining policy, propose sustainable social and economic development through the sound management and use of the mineral resource (Ibid). Thus, in order to assess the competing interest between sustainable environment and economic development, the researcher selected Oromia regional state, with particular focus to Gold Mining in Oddo Shakisso wereda; the practice of Midrock Gold Lega Lege Dembi and Sakaro at Reji Kebele and the practice of artisanal micro and small scale gold mining enterprise in the two kebeles of Dhiba Batte and Sawana. This research mainly assessed the implementation of the Ethiopian Mining Policy and its Effect on Natural and Socio­economical Environment of the Study Area. It tried to investigate the socio economic legacies of gold mining in the area, in relation to Environmental policy, proclamations and universal environmental protection protocols that our country is bound to respect.

1.2. Statement of the Problem

In Ethiopia, currently, gold, tantalum, emerald and other industrial minerals are being extracted from economic purpose at the different mining sites of the country. In particular, mining for gold is a key development sector, as it almost covers more than 97% of the mineral export share. Gold export, which was just US$ 5 million in 2001, has shown a large increase to US$ 602 million in 2012.OddoShakisso and Saba Boru weredas of Guji zone, in Oromia, are mineral rich parts of the country, where a lion's share of gold production for the country is extracted from this area. Laga Dembi large scale private gold mine is found in this Wareda. However, the issue of sustainable development is a crucial matter along with the development of mining industry of Ethiopia ( EEITI,2016).

It is inevitable that the extraction of minerals from a certain landscape (the physical feature of earth) leads to disturb the environment. It is also extremely important to identify the contribution of mining in providing job opportunities and also as means of revenue generation for citizens.

Thus, the two things are decisive and need common ground. To decouple these two inseparable and competing needs, mineral extraction should be conducted in the light of sustainable utilization and management of the environment. The other thing that needs consideration is the interest and the rights of the local community for the development of the national economy in fair and compromising way.

Although, the researcher has tried to find a research conducted on similar topic on the same locality (werada), he is unable to get a single one. However, as a dweller of Guji Zone, the researcher has got ample information regarding complaints about the effect caused by the mining activities on the local environment in the study area. The Oddo Shaakiso wereda Administration and people living around the mining site of Midroc at Reji (Lega Dambi and sakaro), Dhiba Batte , Sawana kebeles and other similar areas are complaining about the negative effect of the mining activities brought to them. They describe that even though their children got daily income from the gold extraction, most of them don't want to go to school, and some are exposed to HIV/AIDS due to a large extent of people mobility in the area. Most part of their natural forest is cleared for the sake of gold mining and as a result the land is degraded and on some sites land slide has been feared, while, some part of the district is facing rain shortage. Farther more crop production is hampered and some overproducing kebeles are put under safety net program.

As far as Midroc Laga Dambi Gold Mining Company is concerned, people living around the mining site mostly complain about the chemical by product used to separate the gold from non­gold items. The chemicals contaminated water is released to the dam and created an artificial lake. This chemically contaminated lake is separated from the natural clean water lake by a heap of gravel and soil. The local residents believe that the chemical water is slowly leaking and contaminating their drinking water, and different animals and birds which drink this contaminated water are gradually dying. Plants grown around the lake are also drying. Some animals and people who drink this water are giving birth to deformed offspring (Information from Local Health Center March 2018).

As a matter of fact, the researcher believes that there is a dire need in conducting environmental protection, side by side, with that of the mining activity. The researcher was motivated to conduct this research to assess the effect of Ethiopian Mining Policy on the natural and socio-economic environment of that specifically identified study localities; Reji, Dhiba Batte and Sawana kebelesin Oddo Shakisso Wereda.

1.3. Research Questions

2. How much is the natural and social environment affected by the onset of gold mining operations in the study area?

3. What is the level of employment Opportunities that gold mining has created for the inhabitants in the study area?

4. What is the economic contribution of gold mining to the study area in particular and the country as whole?

5. Is the principle of corporate social responsibility observed in the study mining area?

5.1. Research Objectives

1.4.1. General Objective

The general objective of this study is to assess Ethiopian Mining Policy and its effect on natural and socio-economic environment, in the Case of Gold Mining in Reji, Dhiba Batte and Sawana Kebeles of Oddo Shakisso wereda from 2005-2009 E.C, and identifying the gaps and possible policy recommendations for future gold mining activities in the study area.

1.4.2. Specific objectives

1) Examine the extent of the effects of gold mining on the natural and social environment in the study area;

2) Identify the level of employment Opportunities created by gold in the study area;

3) Analyze the contribution of gold mining for the national economy of the country as whole; and,

4) Evaluate principle of corporate social responsibility being observed in the study mining area.

1.5. Scope of the Study

Kothari, C.R., (2004) and Kumar, S. and Phrommathed, P., (2005) both describe delimitation of the study as the scope and dimensions of the study that should be delimited with reference to the topical scope in terms of such factors as breadth, depth, reference period, the type of institutions or respondents to be studied and the issues to be analyzed.

Thus, the study was conducted in Oromia Regional state, Guji Zone, Reji, Dhiba Batte and Sawana Kebeles of Oddo Shakisso Wereda from 2005-2009 E.C.

The theme focused on the assessment Ethiopian Mining Policy and its effect on natural and socio-economic environment. The mining organization included in the study was the Gold Mining Project of Midroc, the only company selected that operates in the study area. In the case of artisanal mining micro enterprise, three enterprises are selected; one enterprise from each kebele. In consequence, the findings could not be generalized to all places where mining activities are carried out. The findings, however, can pin point key issues that can facilitate the implementation of Ethiopian mineral Development policy in other places with the observation or adherence to corporate social responsibility principle.

1.6. Significance of the Study

The mining sector should be seen as an opportunity to find an alternative to agricultural product export. The sector helps to earn foreign currency, encouraging industrialization by providing the capital and the raw materials needed. Thus, this research focused on assessment of Ethiopian Mining Policy in terms of the scope of gold mining activity in the area, employment opportunity and revenue generation of gold mining practice vis-a-vis its effect on the environment; particular reference to Gold Mining in Reji, Dhiba Batte and Sawana Kebeles of Oddo Shakisso wereda.

In doing so, the researcher wanted to analyze the scope of gold mining and employment Opportunity created; identify the contribution of gold mining in revenue generation, and effect of gold mining on the environment and surrounding fauna and flora. This study is also believed to raise awareness about the need for environmental protection and sustainable growth. The findings can be used to provide information to different levels of concerned government bodies and policy makers on the implementation of mining policy in line with environmental rehabilitation and sustainable development. It may also assist other researchers to further investigate implementation related problems and the way forward. At last, enhanced knowledge could be released on the mining policy and its effect to the environment.

The findings may also help the Ministry of Mines to further understand grass root implementation realities and revise strategies both to increase job opportunity, and also to protect the some socio-economic environmental hazards, due to mining in general and gold mining in particular.

1.7. Limitations of the study

As a case study was conducted on small sample and hence this limits the ability of the findings to generalize. In addition, since other external factors might have also affected the relationships the study did not establish immediate causal relationship between gold mining and its effect on natural and socio-economic environment.

Other limitations include unavailability of adequate data from 2005-2010 E.C. about gold mining and environmental protection; gold mining and job opportunity created; gold mining and its economic contribution, and outcomes of principles of corporate social responsibility.

1.8. Organization of the Study

This research focuses on assessment of Ethiopian Mining Policy and its effect to the natural and socio-economical environment in the Case of Gold Mining in Oddo Shakisso wereda. This research was organized into five chapters namely; chapter one which consists of the introduction which includes the background of the study, statement of the problem, purpose of the study/objectives of the study, significance of the study, limitations and delimitation of the study, definitions of the terms and theoretical framework. Chapter two is concerned with review of related literature which outlines the literature of previous studies by other researchers. It began with providing an overview global sustainable mineral development practice, and also outlines some of the implementation realities of the Ethiopian Mining policy. Chapter three consisted of the research methodology which includes research design, target population, sample size and sampling procedures, data collection, research instruments, validity and reliability, data collection procedures and data analysis procedure. Chapter four consisted of presentation, analysis and discussion of the research findings; while chapter five gives summary, conclusion and recommendation.

1.9. Definitions of Key Terms

The following are the important terms used in this study:

Placer gold-is a gold occurring in a deposit of sand or earth on a river bed or bank (Anglo Gold Ashanti, 2015).

Sustainable development-is defined as the ability of current generations to meet their needs without compromising the ability of future generations to meet their own needs (Brundtland, 1987).

Social Environment-is social context, socio cultural context or milieu (a person's social setting) refers to the immediate physical and social setting, employment opportunity, economic access in which people live or in which something happens or develops. It includes the culture, livelihood, that the individual was educated or lives in, and the people and institutions with whom they interact (MC Mahon et al., 2001).

Artisanal-is non-mechanized mining operation (mainly manual in nature) of gold, gemstones, tantalite, salt, Pt, clay, industrial and construction minerals/ rocks, & others; it is an activity worked less than 15m vertical depth; it should be carried out only by Ethiopian individuals or groups; possessions of financial resources, technical competence, professional skill and experience are not required to acquire an artisanal mining license. (McMahon, G., 2010).

Tailings-are the finely ground resultant residue from the mining process that consists mainly of gangue (commercially worthless) minerals, process water, process chemicals, and unrecovered minerals (Younger and Wolkersdorfer 2004).

CHAPTER TWO
LITERATURE REVIEW

2.1. Introduction

In this chapter, the number of theoretical and empirical works on mining and sustainable development which would influence the direction that discussion of the findings would take has been revised and inculcated for the detail understanding of the subject.

2.2. Review of Theoretical Literature

2.2.1. Concept of Mining and Sustainable Development

Minerals are essential for modern living, and mining is still the primary method of their extraction. Now a days, it appears that the main constraints to sustainability in the mining sector come from the ever-increasing demand for resources; the consumption of resources (mostly energy and water) needed to extract and process metals, and the increasing pollution generated by the extraction process. This holds true for both large-scale, often multinational corporate, operations as well as for small-scale or artisanal ventures.

How to maximize the development benefits of mining while improving the environmental and social sustainability of the mining sector was first addressed in the Johannesburg Plan of Implementation (Seyfang, G., 2003), where the following three priority areas were identified:

1. Address the environmental, economic, health and social impacts and benefits of mining throughout their life cycle, including workers' health and safety;

2. Enhance the participation of stakeholders, including local and indigenous communities and women;

3. Foster sustainable mining practices through the provision of financial, technical and capacity-building support to developing countries and countries with economies.

Sustainable development is the publication of an international report titled “Our Common Future” by World Commission on Environment (Butlin, J., 1989) . This is commonly known as “The Brundtland Report “.The report defined sustainable development as “Development that meets the needs of the present, without compromising the ability of future generations to meet their own needs”.

According to this report, the major objective of development should be to ensure the satisfaction of human needs and aspirations of a material kind. It emphasized the fact that over exploitation of resources may compel human societies to compromise their ability to meet the essential needs of their people in future. Settled agriculture, the diversion of watercourses, the extraction of minerals, the emission of heat and noxious gases into the atmosphere, commercial forests, and genetic manipulation, were all mentioned in the report as examples of human intervention in natural system during the course of development (Rockström, J.et al.,2013). Thus, in every mining activities the following ICMM 10 Principles for Mining and Sustainable Development should be implemented for good (Diehl, P.F. and Frederking, B. eds., 2015).

ICMM 10 Principles for Mining and Sustainable Development

1. Implement and maintain ethical business practices and sound systems of corporate governance.

2. Integrate sustainable development considerations within the corporate decision-making process.

3. Uphold fundamental human rights and respect cultures, customs and values in dealings with employees and others who are affected by our activities.

4. Implement risk management strategies based on valid data and sound science.

5. Seek continual improvement of our health and safety performance.

6. Seek continual improvement of our environmental performance.

7. Contribute to conservation of biodiversity and integrated approaches to land use planning.

8. Facilitate and encourage responsible product design, use, re-use, recycling and disposal of our products.

9. Contribute to the social, economic and institutional development of the communities in which we operate.

10. Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders (IFC Report,2015:9)

Table: 2.1. Sustainability issues are grouped based on economic, social and environment Implication ( IFC 2010)

Economic & Governance

Social

Environment

Economic growth and revenue management Corruption

Local content

Human rights

Poverty

Land use and acquisition Indigenous peoples Working conditions

Gender

Community health and safety and security

Cultural heritage

Water

Biodiversity

Climate change and energy use

Pollution and Waste management

Relations with artisanal miners. Relations with communities.

Source: World Bank, International Finance Cooperation (IFC Report, 2015:10)

2.3. The Effects of Gold Mining on Natural and Social Environment

2.3.1. The Effects of Gold Mining on Natural Environment

Mining practices are depleting forest, bush lands and farmlands. Producers cut trees to develop roads to get to the cliffs and around the tunnel. The trees and the soil are left on the ground and no effort are made to fill the holes with soil. The rocky soil removed out of the tunnel rolled down the slope and eroded the surface soil of the slope and even deposited in the riverbank at the base of the slope. The stone and soil disposed is destroying the trees and vegetation down the cliff of the mountain. The surrounding dwellers complained that the mining has produced extensive negative social, economic, and environmental effects on the surrounding area and nearby communities (Worrall et al., 2009).

Mining activities can have both positive and negative lasting effects on communities and regions. The mining industry boasts the highest wages in the resource sector in Canada; this can lead to comparably wealthy communities (Gibson and Klinck 2005; Gibson and Robinson 2014). New mining activities come with new opportunities for both direct employment and contract work.

Under current technological circumstances most minerals and metals are considered to be nonrenewable resources. Minerals and metals exist in a fixed overall quantity on the earth and when consumed become irreplaceable. Many metals and minerals are recyclable (Drielsma, J.A.et al., 2016).

However, recycling is often not carried out in a developing country like Ethiopia (Rademaker, J.H., Kleijn, R. and Yang, Y., 2013). People in modern societies of 21st century depend on metals and minerals for power, housing, transportation, infrastructure, and consumer goods. Mineral and metal resources are becoming scarce, so that the growing number of world population should have to use these scarce resources with great care and precaution. Managed it properly and developed it in a way that their mining positively contributes towards sustainability (Gibson and Robinson 2014;McAllister and Fitzpatrick 2010; Rees 1985).

Moreover, due to globalization and advancement of technology, the wealth gained from mining is increasing from time to time and even being siphoned into other countries. Some argue that the wealthy mining companies grow richer by exploiting a region's mineral endowments and the region itself suffers socially, economically, and environmentally (Keeling and Sandlos 2009). There must be a better way of mining so that local communities benefit from their resources and have the opportunity to improve and sustain their community after the mining industry has left and closed the mine site.

The type and amount of pollution and waste depends on the range of minerals extracted and the diversity of environments that extraction takes place in so it varies from mine to mine. Besides being voluminous, waste from mining activities is often chemically reactive and becomes more concentrated with each stage of ore processing. Because of their high level of processing and pollutant concentration, tailings can be the most detrimental to the environment (Moore JN, Luoma SN,1990). Tailings are the finely ground resultant residue from the mining process that consists mainly of gangue (commercially worthless) minerals, process water, process chemicals, and unrecovered minerals (Younger and Wolkersdorfer 2004). These mine generated tailings, spoil heaps, and mineral stockpiles require careful management lest they contaminate local water resource through runoff of water with excessive dissolved minerals, and other suspended solids (Ibid).

Abbildung in dieser Leseprobe nicht enthalten

Figure: 2. 1. Wet Tailings Disposal at a Mine in Peru (Stamp, M., 2015)

Dirty gold mining often leads to a persistent problem known as acid mine drainage. The problem results when underground rock disturbed by mining is newly exposed to air and water. Iron sulfides (often called “fool's gold”) in the rock can react with oxygen to form sulfuric acid. Acidic water draining from mine sites can be 20 to 300 times more concentrated than acid rain, and it is toxic to living organisms. The dangers increase when this acidic water runs over rocks and strips out other embedded heavy metals. Rivers and streams can become contaminated with metals such as cadmium, arsenic, lead, and iron. Cadmium has been linked to liver disease, while arsenic can cause skin cancer and tumors (Sandlos, J. and Keeling, A., 2013).

Abbildung in dieser Leseprobe nicht enthalten

Figure: 2.2. Acid mine Drainage at Mine in Australia (Stamp, M., 2015)

The use of mercury in gold mining is causing a global health and environmental crisis. Mercury, a liquid metal, is used in artisanal and small-scale gold mining to extract gold from rock and sediment. Unfortunately, mercury is a toxic substance that wreaks havoc on miners' health, not to mention the health of the planet.

For every gram of gold produced, artisanal gold miners release about two grams of mercury into the environment. Together, the world's 10 to 15 million artisanal gold miners release about 1000 tons of mercury into the environment each year, or 35 percent of man-made mercury pollution. Artisanal gold mining is actually among the leading causes of global mercury pollution, ahead of coal-fired power plants. It is extremely harmful to human health (Gibson and Klinck 2005).

The surrounding communities, referred to as non occupational, which reside in close proximity to the gold mining activities can be the exposed populations and affected at various levels. These adverse health effects may result from environmental exposures to air, water, soil, and noise pollution. Farther more, a mine worker expose his or her family to whatever he or she has contracted, after being exposed to hazardous working environment, can have harmful effect. Factors which determine health hazards and their potential severity include the type of pollutants concerned, the dose or concentration of pollutants and the age or developmental stage of the person exposed, as well as the duration and route, such as inhalation, ingestion or dermal contact, of exposure(Younger and Wolkersdorfer 2004).

Prolonged exposure to gold mining activities can cause many life-long problems for workers. Airborne dust, with a high concentration of more than 5% of alpha quartz silica, can cause occupational lung diseases, such as cardio-pulmonary TB, silicosis, silico-tuberculosis, obstructive airways disease and occupational asthma. Short-term exposure can cause a worker to suffer irritation of the upper respiratory tract (nose and throat) and lower respiratory tract /alveoli (Sandlos and Keeling 2013).

2.3.2. Effects of Gold Mining on Social Environment

Mining makes up a substantial part of the economies of many developing countries around the world and has the potential to deliver significant development benefits when managed in a holistic, sustainable manner. Mining can be considered sustainable if the derived revenues from mining are collected and used to promote sustainable objectives at community and national levels, particularly through regulation and taxation measures that encourage the investment climate. Gold mining companies are a major source of income and economic growth, with an important role in supporting sustainable socio-economic development. (Sandlos, J. and Keeling, A., 2013).

A mine must be profitable in order to be sustainable. Managers will need to generate profit responsibly for as long as possible by keeping costs to a minimum while maximizing revenue. Ensuring profitability can help to maximize benefits for all stakeholders including employees, local communities and businesses, which depend on the mine, as well as the governments that benefit by means of taxes and royalties. Globally, the gold mining industry directly contributed around US$ 83.1bn to the global economy in 2013 equivalent to the combined gross domestic product of Ghana and Tanzania. Gold mining companies directly employed over one million people in 2013, with over three million more people employed as a result of the industry's procurement activities(Ibid).

Gold mining is a growth industry its direct economic contribution has increased almost seven­fold from 2000 to 2013. The growth in the economic impact of the gold mining industry has been most significant in Asia and Africa. There is a positive correlation between the growth of commercial gold mining in countries that have implemented the Extractive Industries Transparency Initiative and reductions in corruption. One of the objectives of transparency initiatives such as the EITI is to reduce corruption risk, a significant factor in the misuse of revenues from extractive industries. In gold producing countries, this appears to be working (Ibid).

The World Bank (2012) defines jobs as all activities that generate actual or imputed income, monetary or in kind including salaried activities. The ILO and its constituents (i.e. representatives of governments, employers, and workers) pioneered the concept of decent work to promote work as a source of personal dignity, family stability, peace in the community, democracies that deliver for people and economic growth that expands opportunities for productive jobs and enterprise development.

During the Millennium Development Goals (MDGs) era, a significant amount of evidence found that jobs were the most important determinant of living standards around the world, and that earnings from employment are the most important driver of poverty reduction (Béné, C.et al., 2012). Job creation boosts living standards, raises productivity, and fosters social cohesion. In our view, going forward, jobs will remain a crucial channel of eradicating poverty and raising living standards.

2.4. The Ethiopian Gold Mining Industry

Geological surveys conducted in 1990s by the Ethiopian Geological Survey Institute proved as the country has abundant mineral resources of: i) metals and precious metals; ii) coal; and iii) industrial minerals (M.PhilipMobbs ,1998). The mining sector remains one of the priority sector in GTP II, with main strategic directions of attracting sizable foreign direct investment (FDI) for exploration and extraction of minerals, increase (tenfold) foreign exchange earnings of the sector and focus on production of mineral inputs for the manufacturing sector that promote import substitution. Mining operations within the country are expected to be an important economic catalyst for the government's export-orientated development strategy. Recognizing the need to promote market-oriented modern mineral production, processing and marketing, the Ministry of Mines established Mineral Market and Value Chain Development Directorate in 2014 bestowed with diverse responsibilities.

Abbildung in dieser Leseprobe nicht enthalten

Figure. 2.3. Midroc Underground Gold Mine at Reji Kebele, Sakaro Site, Oddo Shakisso

Source: Researcher Field Work March 2018

In the mining industry of the country, the primary one is gold mining.Typically, the artisanal mining in Ethiopia has been the basic mineral and rocks production and processing sectors throughout the older civilianization of the country from pre-Axumite kingdom to present time.But a significant large-scale Mining was introduced in to the sector by MIDROC Gold Mining which started work in 1998in southern Oromia, Guji Zone, Oddo Shakisso Wereda (EEITI, 2016).

About 1,259,910 people are directly engaged in the artisanal throughout the country. The No. of people dependant direct and indirectly on this mining sector can be more than five (5) million (Ibid, 2016). Thus, it can be proved to be a primary source of employment for job seekers from various parts of the country who are relatively disadvantaged in the labor market. In Ethiopia, as reported by the World Bank Group, mining contribution to the foreign exchange earnings reached about 10% of which the artisan mining takes the lion's share of over 65%. The artisan mining also significantly contributes to the employment of at least 1.26 million people and supports the livelihood of over 7.5 million populations (Béné, C.et al., 2012,2014). Taking into account the number of artisan miners and average annual production, rough estimation shows that, in the major gold producing areas of the country, a total of about 18,000 kg of gold is produced per annum. The largest production is recorded in Oromia, followed by SNNPR region of the country. The overall labor income to an individual miner is roughly estimated to be 8,000 to 10,000birr per annum, with a high standard deviation over the year, and considerably vary from mineral to mineral and location to location (EEITI, 2016).

Abbildung in dieser Leseprobe nicht enthalten

Figure.2.4. Deep under Ground Tunnel Of Sakaro Gold Mine

Source: Researcher Field Work March 2018

Currently, gold makes up close to 100 percent of the mining sector's exports. Based on the National Bank of Ethiopia's 2014 report, the value of gold exported amounted to ETB 456 million, which represented about 14% .and about 10% of the foreign exchange earnings of the total exports of the country. Contribution of the extractive industries to the Gross Domestic Product (GDP) in the same year amounted to ETB 7,881 million which represents about 1.2% of the GDP and 97% of it is from gold export (EEITI, 2016).The industry also pays taxes and royalties that benefit the regional and federal governments. To these days mining has been, becoming a significant economic sector in Ethiopia.

Abbildung in dieser Leseprobe nicht enthalten

Figure.2.5. Deep under Ground Mining Operation in Sakarro Source: Researcher Field Work March 2018

The other social changes appear in the gold mining area, are loss of indigenous culture, community displacement and change of livelihood. In most cases, due to environmental pollution effect of mining, crop production can fall; health related problems, particularly infections, HIV/AIDS, tuberculosis and malaria will appear in a significant number of gold producing countries, it is believed that the growth of the gold mining industry over the coming ten-year period with the context of mining sustainability can reduce the prevalence of these diseases.

2.5. Observing the practice of Corporate Social Responsibilities

Corporate social responsibilities are local content policies (LCPs) which were first introduced in USA in the North Sea in the early 1970s by an oil mining company. The social support activities which were performed by the company ranged from restrictions on imports to direct state intervention in the oil sector. Over the time, the aim of LCPs has evolved from creating backward links (that is, supplying input to the local economy through transfer of technology, the generation of value-added in domestic supply sectors, the creation of local employment opportunities, and increasing local ownership and control) to creating forward links (that is, processing the sector's output prior to export through, for example, the establishment of refineries, petrochemical industry, and the production of fertilizers (World Bank, 2013).

Mining has the potential to contribute significantly to economic growth as well as local community development depending on the strategies and approaches that companies take. Critical areas include strategic community engagement and investment, including managing relationships with ASM, supporting local procurement and supplier development and addressing gender issues. Gold mining companies can catalyze development projects that improve the socio-economic conditions of host communities often aimed at tackling similar issues to those that aid agencies seek to address. Community investment projects can often be supported by a sound financial business case which can enable companies to mobilize significant resources to address social issues in a way that traditional aid donors often cannot (Warden-Fernandez, Janeth,2000).

Abbildung in dieser Leseprobe nicht enthalten

Figure:2.6. A House Built at Kenyasi, Ghana by Newmont Mining Company for people affected by their mining activities in Kenyasi (Opoku-Ware,2010)

There are often high expectations that mining companies will have a positive impact on poverty in and around the areas of their operations. As noted earlier, much depends on the local operating context, and whether or how governments reinvest profits into social services and basic infrastructure. Many companies recognize that investing in different community programs, such as skills training, health and agricultural assistance can help reduce project related risks and gain and maintain a social license to operate (Opoku-Ware,2010)

Expectations of employment creation that benefits local communities are not restricted to gold mining operations in developing countries. Gold mining companies operating in developed countries such as Canada and Australia face strong pressure to demonstrate that local indigenous communities gain socio-economic benefits from the development of gold mining operations on their land.

• Hochschule: Ethiopian Civil Service University (Institute of Leadership and Governance)
• Veranstaltung: Public policy Study
• Note: Masters Program graduation
• Autor: Cherinet Bariso (Autor:in)
• Erscheinungsjahr: 2018
• Seiten: 106
• Katalognummer: V1190281
• ISBN (PDF): 9783346630940
• ISBN (Buch): 9783346630957
• Sprache: Englisch
• Schlagworte: gold, mining, effect, natural, socio-economic, environment, case, oddo, shakisso, district, oromia, region, ethiopia, policy, implementation, assessment