Why Artisanal Mining Risk Is Becoming Harder to Manage

Artisanal and small-scale mining (ASM) has become one of the most difficult risks for mining companies and governments to manage.

The challenge is not simply the presence of small-scale miners. In many countries, ASM provides livelihoods for millions of people and plays an important role in local economies. The difficulty lies in knowing where mining activity is taking place, how quickly it is expanding, who controls it and where the minerals are going.

For mining companies, governments and supply-chain participants, that information gap can translate into security, environmental, financial and reputational risks.

As commodity prices rise and demand for minerals such as gold and copper increases, the pressure on mining areas is likely to intensify.

ASM Is No Longer an Isolated Risk

Mining companies have increasingly identified artisanal and illegal mining as a material business risk.

Gold Fields, AngloGold Ashanti and Southern Copper, among others, have highlighted the potential consequences of ASM and illegal mining, ranging from operational disruption and environmental damage to security concerns and financial liabilities.

For governments, the challenge is even broader.

The Extractive Industries Transparency Initiative estimates that ASM provides livelihoods for more than 40 million people globally. Yet much of the sector remains informal or poorly regulated, leaving governments with limited information about production, employment, revenues and environmental impacts.

That makes effective policy difficult.

Governments cannot easily formalise activity they cannot accurately locate. They cannot efficiently target inspections if they do not know where mining is expanding. And they cannot protect tax revenues when significant volumes of minerals move through informal channels.

Not All Small-Scale Mining Carries the Same Risk

One of the biggest mistakes in addressing ASM is treating the entire sector as a single problem.

Artisanal and small-scale mining can range from individual informal miners and community operations to organised, licensed businesses operating under government regulation.

Some operations may comply with environmental and labour requirements, while others may operate without permits, use harmful production methods or become connected to illegal supply chains.

The risk therefore depends on several factors, including:

Whether miners have legal rights or permits;How minerals are extracted and processed;
Whether environmental and safety standards are followed;
Who controls the mining site;
How minerals are transported and sold; and
Whether the resulting production enters formal supply chains.

Commodity prices, local employment opportunities, land access and government enforcement also influence where and how ASM develops.

Without current information, companies and regulators are often forced to respond after a problem has already emerged.

The Financial Cost of Informal Mining

The financial implications can be substantial.

Undeclared production and informal mineral flows can deprive governments of billions of dollars in tax and export revenues.

Swissaid estimated that at least 435 tonnes of gold worth approximately $31 billion left Africa undeclared in 2022.

Ghana provides another illustration of the scale of the problem. Analysis cited by Reuters identified a significant gap between Ghana’s declared gold exports and the imports recorded by its trading partners over several years, with the missing gold estimated to be worth billions of dollars.

Burkina Faso has also faced substantial illicit financial flows associated with mineral production.

These figures highlight an important point: ASM-related risk is not only about individual mining sites. It can affect national revenues, foreign exchange earnings and the integrity of mineral supply chains.

For governments seeking to increase the contribution of mining to economic development, bringing legitimate ASM into formal channels is therefore becoming increasingly important.

Small Mines Can Create Large Environmental Problems

The environmental footprint of ASM can also be much larger than individual mining sites suggest.

A global study published in 2025 linked millions of hectares of deforestation to mining between 2001 and 2020. A significant share of the affected land was associated with mines covering less than one square kilometre.

The lesson is important: thousands of relatively small mining operations can collectively produce landscape-scale environmental damage.

Gold mining in the Amazon provides a prominent example, with extensive deforestation linked to informal and artisanal operations.

The environmental consequences also extend beyond deforestation.

According to the United Nations Environment Programme, artisanal and small-scale gold mining is responsible for approximately 37% of global mercury emissions, making it the world’s largest source.

Once mercury and other pollutants enter rivers, soil and food systems, the consequences can extend far beyond the original mining site.

The Security Dimension

In some regions, ASM-related risks extend beyond environmental and financial concerns.

Artisanal mining can operate alongside organised crime, smuggling networks, informal taxation and armed groups.

Eastern Democratic Republic of Congo is one example, where control over mineral-rich areas has become intertwined with conflict and illegal taxation.

The problem is not that artisanal mining itself inevitably creates insecurity. Rather, mineral deposits can become valuable sources of revenue for groups operating outside formal state structures.

That makes understanding who controls a mining area and where its production ultimately goes just as important as knowing where physical mining activity is occurring.

The Visibility Problem

The biggest challenge facing governments and mining companies may therefore be the lack of timely information.

A company may know that artisanal mining is occurring near its concession. But that does not necessarily tell it whether activity is expanding, whether miners are moving toward operational areas or whether a previously insignificant site has suddenly become a major source of production.

Traditional monitoring methods can struggle to keep pace.

Field inspections are important but can be expensive and difficult across large or remote territories. Reports from communities and local authorities can provide valuable information, but they may not always deliver a consistent picture over time.

By the time an environmental audit or enforcement operation identifies a problem, the landscape may already have changed.

Satellite Monitoring Could Close the Gap

Technology is increasingly offering another way to monitor ASM.

Satellite imagery can help governments and mining companies identify changes across large areas and detect mining activity that may otherwise be difficult to monitor continuously.

In regions affected by heavy cloud cover, radar-based satellite data can also help identify changes that optical imagery may miss.

This does not mean satellites can replace field inspections, community engagement or government enforcement.

Instead, satellite monitoring can act as an early-warning system.

Regular monitoring can help identify where mining activity is expanding, where environmental damage is accumulating and where operators may face increasing encroachment risks.

It can also help governments determine where enforcement resources should be concentrated and where formalisation could be appropriate.

From Reactive Management to Risk Intelligence

The growing challenge is therefore not simply to eliminate ASM.

In many African countries, doing so would ignore the millions of people who depend on artisanal and small-scale mining for their livelihoods.

A more practical approach is to distinguish between activity that can be formalised and responsibly integrated into the economy and activity that requires stronger enforcement because of environmental damage, criminal involvement or illegal mineral flows.

That requires better information.

Governments and mining companies need a continuously updated picture of mining activity rather than relying solely on periodic reports or responding once a problem becomes visible.

Satellite monitoring, combined with field intelligence, regulatory data, community engagement and supply-chain due diligence, can provide that broader picture.

Managing ASM Before It Becomes a Crisis

Artisanal and small-scale mining is likely to remain a major part of Africa’s mining landscape.

The growing demand for gold and other critical minerals could increase both its economic importance and the risks associated with informal production.

For governments, the opportunity is to bring legitimate miners into formal systems, increase revenues and improve environmental standards.

For mining companies, the priority is to identify potential encroachment, operational disruption and environmental liabilities before they become costly problems.

The shift needs to be from reactive enforcement to continuous risk intelligence.

The question is no longer simply whether ASM exists. It is where it is expanding, how quickly it is changing, who is involved and what impact it is having.

Companies and governments that can answer those questions early will be better positioned to manage one of the mining industry’s increasingly complex challenges.