Grants Director Ruth Ruderham explains why Comic Relief is working with The Fairtrade Foundation and Fairtrade Africa to introduce a new programme designed to support small miners in East Africa.
We have a long history of supporting fair trade at both a project and programme level – from supporting the certification of fair trade pulses in 2007 to our current work funding the development of fairtrade in gold mining in Kenya, Tanzania and Uganda – something we have been committed to since 2012.
That's why I was very proud to attend the launch of fairtrade gold from East Africa into the UK market today and to introduce a groundbreaking new investment facility.
During a recent visit to Comic Relief funded projects in Uganda, one of the most memorable parts was seeing two very different gold mines. Both were small-scale, artisan mines producing small amounts of gold through predominantly manual labour but the contrast was stark. One was supported by Fairtrade Africa and their local partner and the other was not.
The ‘traditional’ mine was a maze of open cast pits sprawling behind the small homestead of the owners. We wanted to walk around but were warned that it was too dangerous – the land was eroding as the trees that had held in place had been cut down. The pits were cut at random as the household tried to guess where the seams of gold might be and when they did find rocks containing gold, they were extracted and crushed by hand by him and his young son, then washed in mercury to separate the elements. It was clearly back-breaking, dangerous work with a tiny yield.
Sama Mine – a fully accredited Fair Trade mine - was a different story entirely. Part of a cooperative of local miners, they benefitted from a geologist who worked with them to identify exactly where to dig. They used simple but effective technology to create safe mine shafts that the team took it in turns to descend extracting rocks and lifting them to the surface by a pulley.
Rocks were then broken down in a machine that smashed them against steel ball bearings and the gold was separated in a ‘Gold Katcha’ machine. Use of mercury was minimal and at the very end of the process. The mechanisation and training that the miners had received dramatically increased efficiency and the environment was safe, well cared for with trees replanted after a shaft was closed and with equipment and rocks carefully stored and managed.
All of this was possible because of the support of the cooperative and of Fairtrade Africa, whose work to raise the standards in which the miners were operating and the productivity of their incredible efforts was paying off.
Despite the enormous contrast between the two mines I saw, the ‘fairtrade’ cooperative still struggled for sufficient capital to invest in their expansion. With demand for gold far outstripping supply and with the training they had received, they were capable of doing more – but mining communities are marginalised from fair finance due to high perceived risk and costs of investment.
The miners, still working towards accreditation and even those at Sama who had already achieved fair trade status, were still living hand to mouth. The need for an investment fund that they could use to buy the equipment that would increase their efficiency and increase their earnings was clear.
One of the aims of our funding is to act as leverage for other investors as we have identified an initial $250,000 investment opportunities within target mine sites within Comic Relief’s funded portfolio and nearly $1.5 million beyond that between now and 2020.
A combination of grant and loan finance to support miners will allow them to work towards and beyond accreditation. Whereas grant funding will continue to be used to provide technical assistance and to cover charitable costs such as sending former child miners to school, the loan funding will be used to invest in infrastructure that will enhance returns. The aim will be for the fund to recycle its own funds, retaining interest for re-investment.
Projected benefits of this blended approach of investment and grant funding are clear. We expect the income of around 2,800 miners and their families to increase by 20 – 30% a year at the same time as their working conditions are enhanced.
Comic Relief is proud to partner with Fairtrade Africa and I am excited to see the difference that this investment fund will make.