Masters of Philosophy Research Proposal 4W-Orderx

farmacridInternet και Εφαρμογές Web

2 Φεβ 2013 (πριν από 4 χρόνια και 4 μήνες)

285 εμφανίσεις

-

1
-








`









RESEARCH

PROPOSAL

Title:
Competitiveness Analysis of Key Issues, Constraints and
Opportunities of
Small Scale Semi
-
precious Stones (Gemstones)


Mining Value chain



by


Daniel F Nyaungwa


for



Doctor of Business
Administration



Maastricht School of Management (MsM)


Supervisor: Prof Mvano

-

2
-




Ta
ble of
Contents

Chapter 1: Introduction









Page

1.0

Introduction


5

1.1

Resource Curse Theory


5

1.2

The

Research problem

6

1.3


Ratio
nale and Purpose of study







7

1.4

Research Objectives








7

1.5

Key research questions

&

Minor Research Questions







8

1.6

Statement of

Hypothesis/Propositions






8

1.7

Outline of ent
i
re report








8

Chapter 2: Literature Review



2.0 Introd
uction










9

2.1
Porter’s Diamond Model







9

2.2 Porter’s Generic Strategies


2.3 Porter’s

Five Competitiveness Factors in ASM


2.2 Value chain programs research







11

2.2.1 The
objectives of the paper







12

2.2.2 M
ethodology used








12

2.3 The Artisan
al gemstone value
chain







13

2.4 Value Chain Competitiveness Assessment Program

14

2.5 The ASM Gemstone Value Chain


15


2.5.1
T
he value chain program








16

2.5
.7
The Value Chain Mapping

17

2.5.8 Actors

in the va
lue chain








18

2.5.9

Types of Upgr
ading in ASM value chain






18

2.5.9.1 Governance in the Value Chain

18

2.5.9.6 Innovation




19

2.6
Key issues, challenges and constraints in ASM






20





2.7

Typical issues, constraints and oppor
tunities

Review





20


2.7.1

Iss
ues investigated







2.7
.2 Opportunities

2.7.3

Employment creation and poverty reduction





23

2.7.4

ASM and poverty










23

2.8 Constraints and issues

2.8
.1 Access to Finance and other operational concerns





24

2.8
.2 Mining equipment, tools and machinery






25

2.8
.3 Local and sustainable development issues






25

2.8
.4 Gender issues
in small
-
scale mining






26

2.8
.5 Child labour in ASM








27

2.8
.6 ASM and HIV and AIDS








27

2.8
.7 Environmental, Health and social concerns






27

2.8
.8 Health and safety









28

2.8
.9 Social impacts of artisanal small scale mining





29

2.
8
.9.1 Legislation and government mineral policy





29

-

3
-








2.8
.9.2 Artisanal and small scale mining and climate chain




30

2.8.9.3

Incomes and Economic impact of Artisanal and small sc
ale mining


30

2.8.9.6
Conflicts of ASM, LSM and Governm
ent






31

2.8.9.7 Critique of the Previous Research

2.8.9.8 Findings










31

2.8.9.9 Conclusion

and Recommendation of the studies


2.9 Newspaper Reports Review on Erongo ASM

Chapter 3: Research methodology

36

3.1 Introduction









36

3.
2 Conceptual framework







37

3.3 Research design









37

3.4

Sampling










37

3.5

Data collection
-
Quantitative &

Qualitative






38

3.6 The Relation to Questionnaire

38

3.7 Pilot Testing Phase


38

3.8
Data Analysis



Mixed Method

39


3.8.0 Analysis of Quantitative Data


39

3.8.
1 Confirmatory Factor Analysis

39

3.8.2 Descriptive Statistics


39

3.8.3 Anova Statistics

39

3.8.4

Testing of Homogeneity



41

3.8.5

Mann
-

Whitney Test



41

3.8.6

Regression Analysis




41

3.9 Analyzing Qualitative data



41

3.9.0 Reliability and Validity




41

3.9
.1 Threats to reliability



41


References




42


Appendix 1

M
ine
r’
s questionnaire 45



Appendix 2
-
Organization

and
stakeholder’s questionnaire 55


List of Tables and Diagrams

Diag
ram 1
-

Background Map of Namibia


5

Diagram 2
-
Porter’s

Diamond Model









7

Diagram 3
-

Porter’s Generic Competitive Strategy

8

Diagram 4
-
Porters five forces of competitiveness





12

Diagram 5
-
The block diagram value chain






17

Diagram 6
-
Mapping value chain








19

Diagram 7


Conceptual Framework

Diagram
8
-
Sampling Frame

Pie Chart


Table 1
-

Actors in the ASM value chain








20

Table 2
-

Typical

issues constraint
s and opportunities of ASM





36

Table 3
-

Research Issues



36

-

4
-






Table 4 Sampling Composition

Table 5

Relation to Themes and Questionnaires



38


Table 6

Porter’s Five Forces example Confirmatory
Factor

Analysis



38

Table 7

Porter’s Five Forces example Descriptive Statistics


39

Table 8

The Porter’s
Five Forces Example
Mann
-
Whitney U

40

Table
9

Reliability

Cronbach Alpha


41





























-

5
-






CHAPTER
1:

INTRODUCTION




1.0

Introduction


In this thesis proposal the researcher is
going to
do a

c
ompetitiveness

analysis
of

Gemstone
artisanal

small s
cale
mining

(ASM)

value chain

focusing
on key

issues, co
nstraints and
opportunities of small
scale precious

sto
ne
miners in Erongo

Region of Namibia

and
comparing them to ASM in the Karas Region
.

The main objectiv
e of the research is to
determine
the
major
constrain
ts to improved performance
of gemstone

value chain
. The
factors depicted

in D
iagram 3
are determined fr
om Porter’s diamo
nd (1990),
Porter’s five
competitive forces

and the Porter’s Generic Strategies

(
Porter
1979, 1980, 1985).

The ASM
value

chain analysis will follow five

interconnected steps

from

the

research design

and

data
collection

using primary and secondary sources by way of questionnaires

and interview
guides
. Secondly, the compiling of the A
SM value chain map follows and

will help to organize
the data. Thirdly by using the ASM value chain framework, the collected data

will be fu
rther
organized
and analyzed to reveal the opportunities and constraints within the value chain.
Lastly, the resulting analysis of opportunities and constraints is vetted with
stakeholders and

used to design a strategy
for the value chain to improve compe
titiveness and to

agree on
upgrading investments
.

ASM value chain

s
emi
-

precious stones
in this study
will be

referred to
as gemstones. Gemstones in the Erongo

Region of Namibia are a category of more than 20
different types of semi precious stones. The gemstones pass through many hands of mining
,

brokers and wholesalers
before they are polished, processed and introduced to the retail
market. At every stage of
t
he gemstone value chain,

from the mine to the market there are
economic activities which raise millions of dollars in
the
world trade.


In this study, the terms artisanal and small scale miners
(ASM) and Small Scale Miners (SSM)
will be used interchangea
bly
.


Empirical evidence shows that the
Namibian

artisanal m
ining is
characterized by

labour
-
intensiveness, low capital investments, low degree of mechanization,
basic equipment, high degree of occupational risks and
is

regarded
as both

informal and
forma
l.

Ellmies, Hahn
and Mufenda

(2005) said that according to the International Labour
Organization, small
-
scale mining to some may be “dirty, dangerous, disruptive and should be

-

6
-






discouraged
. To others it is profitable, productive, or simply the only way out of poverty”. This
is true for many if not
all
artisanal and

small scale
miners in Namibia for whom small
-
scale
mining provides the much needed i
ncome used in many households
( National Pla
nning
Commission 2008b)
.
To a certain extend artisanal mining improves the living standards and
livelihoods of many people.


1.2

The Resource Curse Theory


The well known ‘resource curse’ hypothesis is regularly used to depict the mining sector in
Africa.

Many researchers have all researched and catalogued the clearly identifiable links
between mineral exploitation and a variety of social and security issues rang
ing

from

wars,
poverty and abuse of women
. However Namibia is an exception with good governance

and
transparent administration of natural

resources. This theory does not therefore apply to the
Namibian chapter of ASM.


1.1 Background



According to Hilson (2006) in his report titled ‘Small
-
scale Mining, Rural Subsistence and
Poverty in West Africa’,

by 2006 an estimation of about 13 million people worldwide were
involved in small
-
scale mining activities and that another 80
-
100 million people were
depending on it for their survival. In Namibia employment due to small
-
scale mining in

both
legal and il
legal mines

was estimated at a total of 10
2 000 people in the year 2011.
In almost
hundred years of existence
of Artisanal mining

activities in Namibia
, this sub
-
sector has
continued to employ workers to unearth semi
-
precious and precious stones

(Namibia

is a
middle income country with an unemployment rate
estimated at
52%. The unemployment is
much

higher

in the rural areas among the youth. Out of the 2
, 1
million
Namibia
ns

60
% reside
in rural
areas.
Namibian National Development Plans
(
NDP

1
-
NDP 4
)

emphas
ize on the
importance
of small

scale
mining
as an important strategy of poverty alleviation
.


-

7
-






Erongo region

and Karas Regions are two

of the thirteen
political
regions of Namibia.
In 2010
,
Erongo R
egion

and Karas Region

registered a popu
lation

of
3
78
000

people which constitutes
7

percent of the total Namibian population. The tot
al population is made up of 68 percent
males and 32

percent females. Average household size is 3.6.
T
he Ministry of Mines and

Energy (MME) funded

Erongo Region
to assist activi
ties of small
-
scale miners. Also

the
European Uni
on Delegation to Namibia sponsored

US$1
.3

million to support ASM

in the
Erongo Region
through the Association of Small Scale Miners (ARSM)
with capacity building in
the form of business
management

and logist
ics
.
So far a number of
small
-
scale miners in the
Erongo Region are
formalized
.

In the Karas Region all the ASM interventions are at an infant
stage.
The mining activities in this

sub
-
sector involve extraction of gemstones, crystal
specimen, tantalite and
cassiterite


(Ellm
ies et al, 2006). The gemstones extracted
include
fluorite, dioptase, topaz, aquamarine, quartz, amethyst, tourmaline, and garnet. Some of the
small
-
scale
miners in

the Erongo Region
have valid Non
-
Exclusive Prospecting licenses while
ot
hers operate illegally (Krappmann, 2006).






Diagram 1
: The Map of Namibia:

The Study Area The Erongo region stretches from ands covering the towns of Walvibay and
Swakopmund .

The Gemstone Mining activities are located between Usakos from
Windhoek to Swakopmund.

And in the Karas Region around Keetmanshoop area.

1.2

Research Problem



-

8
-





Like any other African Country, Namibia is finding ways

t
o alleviate
poverty

accelerate

economic development and increase competitiveness using
natural resources especially

mining
.
However
, abundant

natural r
esources in themselves
are

not sufficient for poverty
alleviation, economic growth and prosperity, but rather in the value

addition of products
and services associated with
them.

Gemstone mining in the Erongo Region is one of the
projects where various stakeholders have invested w
ith aim to alleviate poverty

and
economic development
.

However, its competitiveness and
the best way to add value

to
Semi
-
precious stones are

not
explored.





1.3
Rationale and Purpose of the S
tudy



The
Purpose

of
studying

small
-
scale mining in
Erongo (
Namibia
) is

that it would provide the

latest

information on

value
chain
competitiveness analysis
of

semi precious

small
-
scale
mining

in order to create sustainable employment opportunities, enhance economic growth
and therefore reduce poverty
. The informa
tion
will

be
useful
to policy

makers

in

re
formulating

upgrading and value addition strategies and activities

that will effectively
alleviate poverty
.

The

previous intervention strategies by
stakeholders

like the

European
Union, Government of Namibia
,

investors and
donors;

alt
hough in the right direction did not
achieve

much.

The research

will also

reignite

the
debate
on
the dichotomy of
small scale
mining
, employment creation and
poverty alleviation

and

on the other hand

social
,
occupational and
environmental concerns
.

On the other hand the
recommendation
s

from this
analysis will

contribute to current
public policy efforts to create
enabling environment for
small scale mining





-

9
-



1.4 Research

Objectives



The study is ba
sed on the following
objectives

to
:




1.4.1

To find out whether gemstone small scale mining value chain is competitive

1.4.2

Identify how much

upgrading has taken place
in
gemstone mining value chain
.


1.4.3

Identify the

major constraints to
ASM value

chain competitiveness
.

1.4.4

Identify
further
opportunities for upgrading
in the value chain.

1.4.5

Develop a competitiveness strategic
action

plan for eliminati
ng constraints and
enhance

s
ustainable improved performance
.


1.5

Key

Research Questions



1.5.1


RQ
-
How

much
upgrading

has taken place in the Erongo

Region gemstone

mining
value
chain
?


In order to answer this key question, the study aims to discuss the following minor questions.


Minor Research Questions


1.5.2

RQ1
-
What are the
major
value chain constraints

and issues

to competitiveness?

1.5.3

RQ3
-
What

and where

are the opportunities
for upgrading

in the value chain?

1.5.4

How competitive is the gemstone value chain and what can be done to make it
competitive?


1.5.5

Statement

of H
ypot
heses


1.5.6

Research
Hypotheses:


Constraints prevent competitiveness in gemstone small scale
miners.

1.5.7

Null Hypotheses (H
o
):

Constraints

does not

prevent competitiveness in gemstone
small scale miners.


-

10
-




1.5.8


T
he Conceptual Framework




















1.6

Outline

of
E
ntire
R
eport


This report covers
the
background, literature review, research methodology, data

analysis,
research findings,

conclusions
and recommendations of the value
chain competitive analysis

of small scale mining

in the Erongo Region of Namibia
.

The research problem, the rationale,

the key research question
, the conceptual framework and the hypothesis of the study are
articulated

in Chapte
r 1. The second chapter
covers t
he
literature r
eview

and it explores the
competitive analysis using the value chain approach. The value chain approach
assesses

the
constraints to and opportunities for en
hancing competitiveness using Porter’s

five forces
diagnostic
framework
.

In

C
hapter 3 is
the Research

Methodology

which covers

t
he research
approach, research design, sampling design, unit of analysis
,

sampling
units, indicates

the
timeframe

and questionnaire
.

Chapter 4 will be data analysis using regression a
nalysis

and
other stat
istics

in
Statistical Package for Socia
l Sciences (SPSS
)

and qualitative data processing
and analysis using Nvivo9
. C
hi square will be used to test the str
ength of the relation
ship of
the constraints in ASM.
Issues, constraints and opportunities from the previous researchers
and newspaper reports are
critically
reviewed in the followin
g chapter
.












Dependent Variables


Incomes,

opportunities
,
Competitiveness, increased p
rofits,
efficiency
, upgrading /value
addition
/innovation



Independent Variables

access to finance, tools and machinery, access to
markets, access to land, price signals, training,
occupational health and safety, transport
,

job
security, working conditions.



Moderating Variables:

Enabling
environment, legal f
ramework
-
obtaining permits, tax
regime, mining rights and governance of the chain.




Legal Environment e.g Mining Laws & licensing

-

11
-









Chapter 2:

Literature Review


2.0
Introduction


This c
hapter

gives a summary of

value

chain approach

competitiveness analysis

of

small scale
mining

in the Erongo Region of Namibia
.
It further,
discusses and analyzes the previous
researches done by other researchers on small scale
mining

in the region
. Most researchers
have

however

concentrated their research objectives to finding out

the impact of small scale
mining

on poverty alleviation
. The aim of this

resea
rch is

to find best ways of upgrading the
value chain and adding value to the gemstones.

The r
est of chapter is divided in
to section
s
according to important
cross cutting
issues and
themes

to be discussed on
the
competitiveness of
small scale mining

(ASM)
.

The competitiveness of small scale mining could be analyzed using Porter’s Five Forces,
generic competitive strategies
and the Diamond Model.

The diamond model is shown in
Diagram 2 below.


2.1
Porter’s Diamond
Model Diagram

2 Porter

(1980)





-

12
-


Porter
(1980)

analyzed

the competitiveness of one company is related to the performance of
other companies and other factors tied tog
ether in the value
-
added chain.

Porter considered

clusters of success
ful industries,

the history of competition in particular industries

and
the

dynamic process by which competitive advantage is created
.



The Diamond models looked at six factors;



Factor conditions

include
human resources, physical resources, knowledge resources, capit
al
resources and infrastructure
.
Demand conditions

in domestic market helps firms to create a
competitive advantage. Domestic buyers pressure companies to innovate and create more
competitive products.

Related and supporting industries

can now

produce

inputs which can
help
with
innovation and
internationa
lizati
on. The production of the inputs must be cost
effective to help with upgrading the value chain.
Firm strategy
, structure

and rivalry
, the
strategic mission

and vision of companies is important for success. The intense rivalry in the
domestic market

i
s also important; it creates pressure to innovate in order to upgrade
competitiveness.

Government or

legislative

environment
interventions can occur at local,
regional, national or supranational level

and it affects all the factors
.

Chance

events create

discontinuities in which some gain competitive positions and some lose.

A
weakness of
Porter's work is his exclusive focus on the 'home base' concept.
Its application to mining
industry is treated with caution.

With regard to ASM in Namibia the factor con
ditions,
demand conditions and government or legislative interventions are very important

as they
apply directly.

The many learning points from the diamond model
are

that factor conditions, demand
conditions and legis
lative environment should be considere
d seriously

for ASM value chain to
be competitive.


2.2
Porter's Generic Competitive Strategies (ways of competing)

A firm's average profitability in the long run creates sustainable competitive advantage. The
two basic types of competitive advantage a
firm can have are: low cost or differentiation.
These lead to three generic strategies for achieving above average performance in an
industry: cost leadership, differentiation, an
d focus. The two strategies are
cost focus and
differentiati
on
focus (Porter

1979)

as shown in Diagram
3

below.


-

13
-


Diagram
3 Porter’s

Generic Competitive Strategy



Cost

Leadership:
Lowest cost producer in the industry leads to

cost leadership
. These
include
economies of
scale, pr
oprietary technology and preferential

access to

raw materials
.
Differentiation
:
A firm should seek to differentiate itself from competitors
in its industry
along some dimensions th
at are widely valued by buyers to become competitive.

Focus:
With
the

generic
strategy, the

focuser selects a segment or group of segments in the industry and
tailors its strategy to serving t
hem to the exclusion of others in two variants; seeks

a cost
advantage in its target seg
ment and in

differentiation focus a firm s
eeks differentiation in its
target segment.
Cost leadership including economies of scale is important to the formation of
cooperatives or clusters in ASM. Differentiation is critical to ASM when upgrading in terms of
marketing.

The learning point of the
researcher in this model relate the
Namibian
ASM value
chain
is that differentiation of ASM gemstones from the other stones is vital in international
markets and the focus can target certain market segments.

2.3

Porter’s Five Competitiveness Factors

on ASM

Porter
(2008
)
wrote

the
Porter’s five
Forces

based

on five factors critical for any

industry to
become and remain competitive
, as depicted D
iagram 3
. This
tool is based on factors
influenc
ing industry competitiveness.

Three of Porter's five
forces are
the threat of new
competition, the threat of substitute products and services,

bargaining power of customers
,

the

bargaining power of suppliers and the intensity of competitive rivalry.

This

is depicted in
Diagram 4 below


Diagram 4 Porter’ Com
petitive Five Forces
(Porter

1980)


-

14
-




2.3
.1 Threat

of new competition
:

According to
Porter

(2008) profitable

markets that offers
high returns
attract
s new competitors.

The existing firms can institute
barriers to entry

through
patents

and
rights
.

2.3.2 Threat

of substitute products or
services
:
Customers may

switch to substitute products
since al
ternatives are always available because of
relative price performance of substitute,
buyer
switching costs
, perceive
d level of differentiation, the
number of substitute products
available in the market, ease of substitution and

a

substandard
product (Porter

1980)
.

2
.3.3 Bargaining

power of customers (buyers)
:
Porter
(2008) said buyers

are the people and
organizations who create demand in an industry. The bargaining power of customers is the
ability of customers to put the industry under pressure, which also affects the customer's
sensitivity to price changes. Buyer concentration ratios
, the degree of dependency upon
existing channels of distribution, bargaining leverage, buyer volume, switching costs,
availability of information and

existing substitute products constitutes
bargaining

power of
buyers (Porter

1990)
.

2.3
.4

Bargaining power of
s
uppliers
:
Porter

(2008) stated

that suppliers

are the businesses
that supply materials and other products into the industry. The cost of items bought from
suppliers (e.g. raw materials, components) can have a significant impact on a co
mpany's
profitability. If suppliers have high bargaining power over a company, then in theory the
company's industry is less attractive.

Giuliani

etal

(2009) indicated that t
he bargaining power
of suppliers will be high when there are many buyers and few d
ominant suppliers. If there are
undifferentiated, highly valu
e
products suppliers threaten to inte
grate forward into the
industry.

Buyers do not threaten to integrate backwards into supply
.

-

15
-


2.3
.5
Intensity of rivalry
:
The intensity of rivalry between
competi
tors in an industry will
depend on
many small or equally sized competitors; rivalry is less when an indu
stry has a
clear market leader
. I
ndustries where competitors can differentiate their products have less
rivalry.
Switching costs

is rivalry where

buyers have high switching costs that is, there is a
significant cost associated with the decision to buy a product from an alternative supplier.
Giuliani
etal

(2009) analyzed that the
s
trategic objectives

is
when competitors are pursui
ng
aggressive
growth strategies and rivalry

is more intense.

The most useful competitive forces are threat of new competition,

threat

of substitute
products or services and bargaining power of buyers. ASM face global completion from other
countries and regions in the g
lobal market. Substitute products like gold and diamonds are a
constant threat.
Buyers’

especially international buyers

have a great bargaining power

due to
the many options
available to them.

It is imperative that the five forces of Porter gives an
insig
ht of the possibility of making the ASM value chain if it is taken as an industry on its own.

2
.4

Value Chain
Competiveness Assessment
Programs


Field, Kula, Downing
(
2006) published a
generic research paper
on
how to do

a value chain
assessment

to
integrate competitiveness, economic growth and poverty
reduction. From
literature
review they came with interestin
g recommendations on how to do the

value chain
analysis.

The objective of the paper was

to
offer

a step by step practical guide to intervention
,

design for achieving competitiveness

of the poor
.

Then a strategy should be developed to
improve

competitiveness and achieve an

equitable distribution of benefits and an actio
n plan
be devised to achieve the

strategy. Finally there should be
an established
system of
performance monitoring and impact assessment to evaluate the effectiveness of
interventions.


The discourse
of the paper

centres
on poverty alleviation and competitiveness.

Value chain
assessment

starts with the c
ompetitive a
nalysis of the targeted market
.

Field

etal

(2006)
stated that the value c
hain approach assesses, the constraints to and the opportunities for
enhancing competitiveness using diagnostic framework with six element
s. The six elements
are the end
markets, horizontal linkages, vertical linkages, enabling environment, supporting
markets and firm
-
level upgrading.


Bitzer etal (2008) also said that t
he end markets demands
-

16
-


decide on the quality and standard of the product
. The enabling environment deals with
constraints and opportunities created as a result of trade
agreements and export laws. The
laws

pr
esent market expansion and

preclude
industries and the country to

competitive
ness
.

The vertical linkages relates

to inpu
t supply and final market distribution

and is critical for
moving a product from inception to the end mar
ket. It also ensures the transferring of
services up and down the value chain.

Field etal (2006) indicated that h
orizontal linkages reduce the transaction costs of exporters
and buyers by allowing buyers to buy in bulk generating economies of scale. Supporting
markets by suppliers or stakeholders will include things like information technology, business
consultancy s
ervices, financ
ial services and others. The firm level upgrading refers

to
individual enterprises improving their own competitiveness by producing more efficiently.
Institutionalized l
earning,

innovation, continual
upgrading within the value
chain is

criti
cal
.

The value chains that institutionalize learning are most competitive.

The
researchers gave five steps in value chain assessment

namely
,

the selection of industry
with the most competitiveness potential, conducting
value chain analyses

of the factors
i
nfluencing competitiveness for competitive
advantage, the development of
particip
atory
competitiveness strategy, the

develop
ment

an
d

implementation plan and lastly

the

establish
ment of

performance monitoring and impact assessmen
t.
S
mall sc
ale mining has
the

potential to generate a return to donor investments as well as impact on employment,
incomes and cross
-

c
utting issues. It

has the

ability to increase efficiency. P
roduct
differentiation

is possible

and

there is

a possibility to
access to new demand or

markets
. The
impact will be
increasing employment and
reducing
poverty and grow the economy.

2.5

The Artisanal

and Small Scale
Gemstone Value Chain


The g
emstone
value c
hains on small scale mining are
a
full

range

processes,

activities
, actors

and locations

that are required to bring a mining

gemstone

product from its

prospection to
the worl
d market. In general the value c
hain involves

exploration, mining,
sorting,
polishing,
manufacturing and marketing.



-

17
-


2.5
.1 The Value Chain Program

Diagram

5
:

The Block Diagram
-

Prospecting
, Mining, Sorting, Cutting and polishing,
marketing

Shows the general
process from

prospecting to the market


Input Supply

Prospecting

mining

Cutting and polishing

market

Security
group/cluster
land ow
ners
consent or
licence
securing

mining

equipment


.

2.5
.2 Minin
g
:
Open pit mining and underground mining are the two main ways

used

by semi
precious stone miners. The
small scale miners use basic tools, equipment and machinery. The
mining key

to
sustaining competitive advantages is

in utilizing the mining techniques that is
most suitable to the condition
s.

2.5.
3
Sorting
:
Rough s
emi
-
p
recious s
tones are sorted into different value categories
depending on size, shape, color, and quality. The best semi
-
precious stones are sent off to the
next stage of the value chain of stone poli
shing, jewelry manufacturing,

sold and exported
as
souvenir
s.

2.5
.4

Cutting and Polishing
:
Cutting and polishing often does not occur in the same location
as the exploration and mining. Rather, they are shipped off to be cut and polished in countries
further along the supply chain. It is where a substantial part
of the mark
-
up occurs, and it is
almost always what makes the supply chain "global". The countries and firms that are able to
find the most cost
-
effective, quality
-
assured and increasingly safest means of cutting and
polishing represent those that will be
globally competitive in the future.



-

18
-



2.5.7
Value Chain Mapping

Diagram

6
:
Mapping Value
Chain Gemstone V
alue Chain, Showing Key A
ctors


Mine






























Partly Adopted from Cross etal (2010)


Small Scale Miners


Mineral Brokers

Cleaning, Sorting

Agents



Mineral
Cutting &
Polishing

Gemstone
Dealers



Mineral Brokers

Factory

Production

Workshop

Production


Gemstone
Wholesale
Factory

Production


Retail

Workshop

Production

Online

Retailers



Processing

Artisanal & Small Scale
Miners

Manufacturing


Market

Independent

Retailers

Chain

Retailers

Jewellery

Manufacturin
g

-

19
-


2.5.5 Manufacturing:
Cut and polished semi
-

precious stones are sold to tourist as souvenirs
or to overseers and local jewelry manufacturers. Using
designs from jewelry designers,
retailers, or in
-
house traditional designers, manufacturers transform this semi
-
precious into
jewelry. There is also a great deal of value
-
addition in this phase of the supply chain; the
stones are finally "becoming" jewelry
. Further, this is one of the higher levels of production,
and one that the stakeholders aspire to "upgrade" to. Ultimately, the manufacturing centers
hold a lot of power in the final destination of the semi
-

precious stones, which has the highest
potentia
l for profit.

2.5.6 Market:
Retailing is the ultimate stage in the chain. Locally there are people involved in
retailing rough stones and jewelry in stalls provided by the government through its legislative
structures. Local retailers are also in the local

market souvenir stores of both rough stones
and jewelry. Through the association of small scale miner’s rough gemstones and products
can be found in most exhibitions and trade fairs done throughout the whole country. Global
markets are mainly in Asia, E
urope and North America

2.5.8

Actors in the Value Chain


Table 1: Actors in the ASM Value Chains


Actor


Role in the value chain

Artisanal & Small Scale Miners

Extraction of minerals f
irst step in transforming raw materials into
saleable minerals

Mineral Dealers
,

ASM Processor

Washing, sorting, grading, amalgamating, first upgrade of quality and value
. The buy straight
from miners and sell
it to jewelry
manufacturers

Transporters

Transfer of minerals from mine to the first
market and the transport cost enter into the price.

Equipment Procurement/
Suppliers

Provide basic non mechanized and semi mechanized implements like picks, drill etc

Gemstone Dealers
Cutting and
Polishers

They add value to the rough stones by bringing
them to usable state

Factory and Workshop
Production

T
hese are artisans jewelers skilled in the production of jewelry

Jewelry Wholesalers/
Manufacturing

After the factory production wholesalers distribute the
Jewe
lry to
many retailers



Stakeholders

The
y

provide grants to the development of the ASM these include the European Union, the
Rossing foundation etc

Local Retailers


Sell rough stones in government provided

stalls on

roadside

and exhibitions

Support Service Providers

Market and help to bring

the plight of small scale miners


Educators and Trainers

Help with the training of small scale miner on basic business plans, finance and marketing
including social like Child labour, Health issues like HIV & AIDS and environmental issues

Manufacturers

They add the ultimate value to the stones through the manufacturing of
jewelry

and other
.Usually the Global manufacturers based Switzerland, Philippines, India etc

Entrepreneurial Support

Services

Help with the training of small scale miner
s

on basic bus
iness plans, finance and marketing

Government

Ministry of Mines
Provide grants for the Association of Small scale miners. Health services, sanitation clean
-

20
-


& Energy

water etc

Banking services

Provide basic savings banking services and small loans




Table 1 above shows the value chain roles of various actors

(Cross etal 2010)

2.5.9.
Types of upgrading in ASM Value Chain

Upgrading was de fined by (Kaplinsky 2001; Porter 1990
; Humphrey, Kaplinsky and Saraph
1998;
Kaplinsky and Morris 2000)

as making better products, making them more efficiently,
or moving into more skilled activities. There is no demarcation between upgrading and
innovation. Rabit (2008) defined upgrading as innovating to increase value added. Fir
ms or
mining companies achieve this by entering higher unit value market niches or new sectors, or
by undertaking new productive (or service) functions. Humphrey and Schmitz

(
2000) gave
four types of upgrading; Process upgrading which is transforming inpu
ts into outputs more
efficiently by reorganizing the production system or introducing superior technology ASM
need better mechanized equipments. Product upgrading is moving into more sophisticated
product lines in terms of increased unit values. Functional

upgrading is acquiring new,
superior functions in the chain, such as design or marketing or abandoning existing low
-
value
added functions to focus on higher value added. Intersectoral upgrading is applying the
competence acquired in a particular function
to move into a new sector. Guerrieri and
Pietrobelli 2004; Humphrey and

Schmitz 200(2b) summed, upgrading within a value

chain
implies going up on the value ladder,

moving away from activities in which competition

is of
the ‘low road ‘type and entry

barrie
rs are low.


2.5.9.1 Governance

in the Value chain

There are three styles

of governance: modular, relational, and captive. Network
-
style
governance represents a situation in which the lead firm exercises power through
coordination of production vis
-
à
-
vis
suppliers (to varying degrees), without any direct
ownership of the firm

(
Kaplinsky and Morris

2.5.9.2
Market:
Market governance

means
producer
s can make products with little

inp
ut
from buyers. These ensures that

the buyer has no controlling interest in the production, sets
few if any standards, and provides producers with little to no information on what the market
wants and how to produce it

.
E
ach firm

defines the trade

at its point in the chain, and the
-

21
-


centra
l governance mechanism is price ra
ther than a powerful lead
firm (
Kaplinsky and Morris
2000).

2.5.9.3
Modular:

S
uppliers in modular value chains make products or provide services to a
customer's specifications. Suppliers in modular value chains tend to ta
ke full responsibility for
process technology and often use generic machinery that spreads investmen
ts across a wide
customer base (
Kaplinsky and Morris 2000).

2.5.9.4
Relational
:

I
nteraction
s between buyers and sellers involves exchange of information
through trust build through
reputation, social and spatial proximity, family and ethnic ties,
and the l
ike. Even with
this relationship
, the lead firm still dictates
what it needs

and controls
t
he most important
activity in the chain, thus having the ability to exert more contr
ol over the
supplier

(
Kaplinsky and Morris 2000).

2.5.9.5
Captive:

S
mall suppliers are dependent on a few buyers that often wield a great deal
of power and control. Such n
etworks are frequently characterized by a high degree of
monitoring and control by the lead firm. The asymmetric power relationships in captive
networks force suppliers to link to their buyer under conditions that
is

set by, and often
specific to, that particular buyer.

T
hese lead firms are also the most likely to invest in the
product and process upgrading

of their
s
uppliers

(
Kaplinsky and Morris 2000).

2.5.9.6

Innovation

Gereffi (1994) defined i
nnovation perspective is a measure of potential future performance
.
Innovation in a

broad
er

definition and not

only

li
mited to creating a new product, it is
creating
new methods
in mining, sorting, manufacturing,
prod
uction, marketing and transporting. To
attain this
, there must be enough investment in the actors

and infrastructure and the
government should start creating the environment that is necessary for
innovation
.



2.6 Key

Issues, Constraints and Opportunities

in Gemstone Artisanal Small Scale Mining


In this section the researcher has discussed most the issues and constraints reviewed in
literature of ASM. However it is imperative that the
researcher
could have left some

issues in
ASM.

The issues, constraints and suggested opportunities in the above table captures in short
most of the typical issues in ASM. These issues will be fully discussed in the thesis.




-

22
-





Table
2
:

Typical Issues
,

Constraints

and

Opportunities
of ASM

Typical Constraints/ Issues

Factors

Possible Typical
Opportunities
.

Typical Constraints of ASM in the
geological environment:





• lack of information about
quantities of deposits


Assistance with prospecting tools.


Technical Dept of MME to provide
geo
logical plans.


Typical issues of ASM in the technical
environment:


•use of labour intensive technology

• high losses of values and time

• lacking transparency of the hard ware market


appropriate tools and machinery

• Assistance with appropriate mining
equipment and tools


More transparency on the marketing
of minerals by the Association


Typical Issues and Constraints of ASM
i
n the environment regarding the
human resources:


• unskilled labour force

• lack of writte
n contracts

• social dependencies

• lack of cultural understanding

• bad social image of mining

• subsistence economy

• lack of knowledge on

-

economic principles

-

credits and financing aspects

• gambler mentality


• Child labour
,

Women and gender issues

• Training of modern methods of
mining


Training on Financial and Bookkeeping



stop child labour and sent children to
school

• Give women bigger role as there are
more women donor sponsored
projects


Typical Constraints of ASM
in the

marketing environment:



lack of formal or established market for
gemstones

• access to the market only via intermediates

• market barriers

• market regulations



Establish more market stalls



Better access to International
Markets



Change of Legislation for miners to
export license

Typical Constraints of ASM in the

legal environment:


• not encouraging investment climate

• illegality of ASM

• lack of social security

• lack of political and legal stability

• difficulties to legalize the mines

• contradictions between different acts



Fully legalize ASM



Register all ASM on Social Security

• Assist in obtaining legal papers
registrar of companies, export
licenses
,
Mining
licenses




Benefit from political
stability

Typical Constraints of ASM in the
financial environment:




lack of clear price signal from an existing informal
market

• difficulties in low
-
cost preparation of feasibility
-
studies

• uneconomical investment decisions

• lack of bookkeeping and cost
-
calculation

• lack of capital


lack of access to finance

• high tax and royalty burden

• limited access to foreign currency

• limited access to investors and equity capital



Establishment of price signal and
increase in the

prices



Investment



Better Access to Capital like through
the New SME bank



Better Banking Services


Typical Constraints of ASM in the
Social and Health environment:





Lack of sanitation facilities and lack of safe
drinking water


low
educational level of miners


Poverty


Impact of HIV & AIDs


Occupational Health Problems


conflicts with mining companies and conflicts
with locals



Better living conditions



Change behavior to reduce HIV &
AIDS infection



Government Resolution of C
onflicts
with LSM by resettle the ASM in Mining
areas

-

23
-



2.7
Review

of Key Issues, Constraints and Opportunities in ASM from

Previous Research

In its report of 1999, the International Labour

Organization reported that a questionnaire
which was distributed to different government employers’ organizations and mining unions in
Africa, Asia and Latin America, 15 possible issues affecting small
-
scale miners were listed
whereby respondents chose ‘o
btaining finance’ as the number one issue affecting them.

Environment, safety and technical assistance were also at the top of the list of issues that
were considered to affect small scale miners the most and other issues such as; obtaining
equipment, need

for training, obtaining permits and occupational health also received a
considerable amount of votes.


The rest of the issues listed, namely; transport, tax regime, job security, child labour, working
conditions and selling arrangements altogether account
ed for only 20 percent of the votes. In
Namibia, artisanal miners are unable to secure loans from banks and other financial
institutions for their starting capital and this is especially the case for female miners and for
miners who operate without license
s. This is might be due lack of collateral and the possible
inability and unwillingness of the miners to pay back their loans


Nyambe and Amunkete

(2009)

studied Small

Scale mining in the Erongo Region of Namibia
and its impact on poverty alleviation in N
amibia.

Dreschler

(2001) studied
Small
-
scale Mining
and Sustainable Development within the SADC Region,
Krappmann
(2006) studied
tantaline,
tungsten and gold mineralization suitable for small
-
scale mining in Namibia and
qualitative
survey of metal occurre
nces and assessment project.
Ellmies, Hahn and Mufenda
(2005) gave
an
excursion ‘Report to Small
-
scale Mining in Namibia’.

Appel
(
2010
)

studied environmental
impacts of small
-
scale mining.
Galfi

(2000) studied Neuschwaben

diggers, ‘NAMDEB’,
Tourmaline
.
Senauer

(2002
) studied a

pro
-
poor growth strategy to
2002
,
A pro
-
poor growth
strategy to end hunger. The studies

had many

common
objectives.
The main objectives were

to explore possible contributions of small
-
scale mining to poverty alleviation in the regi
on and
N
amibia (Nyambe and Amunkete 2009
,
Dreschler
2001)
.

For Nyambe and Amunkete (2009)

t
he
ir

research had three main objectives, namely to explore the activities of small
-
scale
mining, the role of small
-
scale mining with regard to poverty alleviation and suggesting policy
recommendations that may help to improve small
-
scale mining activities
. For

all the
researchers

(Nyambe and Amunkete 2009
,
Dreschler

2001,
Krappmann

2006
, Ellmies

etal

-

24
-


2005
, cross etal 2010
)

the discourse was mainly

issues of poverty

alleviation and
unemployment.

2.7.1

Issues Investigated


Table
2 above

shows the typical
constraints, issues and opportunities

found in Small Scale
mining
.


Previous researchers
investigated
more on the
constraints
to competitiveness which
included

legislation, unbecomin
g practice, health and safety, c
hild labour
, access

to capital,
equipment
and mac
hinery
and environmental

co
ncerns (Nyambe and Amunkete 2009
,
Dreschler
2001,
Krappman
n

2006,
Ellmies
etal

2005
, Appel

2010
, Hentschel , Hruschka
and
Priester


2003
, Carstens 2009, Chupenzi etal 2009
, Cross etal 2010
)
.

S
afety and technical
assistance
,

obtaining equipment, need for training, obtaining permits and occupational health
also receive
d a considerable amount of research. The rest of the important constraints to
ASM competitiveness are transport
, tax re
gime
, job

security
, working con
ditions and selling
arrangements

(
Ellmies
etal

2005,

Krappmann
2006
)
.


2.7
.2 Opportunities


Chupezi, Ingram and Schure
(2009)

said
the question that remains to be answered is whether
intervention of any type and on any scale can help break the vicious
cycle of dependence,
thereby enabling small
-
scale miners to earn a more equitable livelihood. There are a number
of opportunities we can consider for resolving ASM problems, suggesting better access to
capital, assistance to get tools, equipment and machin
ery, legal papers like licenses, the
government should help them get working

materials such as tools or ensure sensitization of

the Minerals A
ct, greater transparency on the am
ount paid in by donors and the ASM to

benefit from the D
eve
lopment fund and how
to use it
, reduction in the costs of obtaining
legal papers like company registration

( formalization)
, mining licenses,


price signals of price,
and government and Small Scale Mining Forum
support (
Hentschel

etal

2003).

According to
the
Rossing Foundat
ion

website,

the government assisted by the small scale
miners’

forum
has opened two new
markets. Erongo Regional Council (2011) said t
he new Ûiba Ôas Crystal
Market was constructed as a market place at the Usakos
-
Henties Bay T
-
junction, the main
roa
d betw
een Windhoek and Walvisbay
. Prior to the construction of the market, the small
-
scale miners had to resort to hawking their precious stones along the roads, standing in the
-

25
-


burning hot sun and in nearby towns where tourists are passing.

The ASM has the opportunity
to market their products in organized markets. Additionally, in the next few
years, the Rössing
Founda
tion and other stakeholders will support

the small
-
scale miners with skills
development and safer work practice. Rössing Foun
dation

(2011)

says that the miners have
the opportunities to be trained in better mining methods, adding value to

their product,
better marketing

arrangement of their gemstones and this will generally improve
their
businesses in an environmentally sustaina
ble way.

2.7.3

Employment Creation and Poverty Reduction


Woolard and Leibbrandt
(1999) said that ASM pl
ays a very important part in

poverty
reduction in Africa. Fifty percent of
workforce

in Africa is in mining and
40% of that workforce
is in
artisanal
small scale m
ining.


2.7.4

ASM and poverty


The link between ASM and poverty is profound and complex. Those who constitute the
majority of the ASM community at the

level of resource extraction, basic processing and local
trading

inefficiently
and it is no
t sustainable.


Woolard and
Leibbrandt (
1999
)

argued and
concluded that
t
herefore ASM can actually

perpetuate poverty.

In
Nami
bia one
could argue
that those in AS
,

generally live in poverty.
Field etal (2006)

argued that
they are often driven
into ASM by

poverty and the income they receive from ASM can improve their

daily
subsistence and reduce their impoverished status in the

immediate term. However, the
nature of the activity is such that it

is exploitative. It draws people away from other more
sustainab
le

activities such as agriculture. It does not produce long
-
term

wealth for these
individuals. It creates debt. It uses resources

M have no other choice. ASM helps them to
move from extreme poverty to poverty
.


2.7.5

ASM is driven by poverty


Woolard and
Leibbrandt (1999
) further

argued that
m
any ASM workers are engaged in the
trade because they have no jobs and no alternative options. In places where the previous,
formal economy has collapsed due to war, politic
al instability and corruption,

ASM can aris
e
-

26
-


as a survival strategy for those who live on and around mineral
-
rich land. It can be used as a
general guideline that miners typically receive around a relatively small percentage of the
local

sale value of their product.


In Erongo Region towns like Ka
ribib and USAKOS is supported from the proceeds of ASM.
A
larger proportion of this money e
nters local circulation
through a variety of actors, the largest
prop
ortion being through the trader,

where it pays for services directly associated with the
mining activity such as provision of tools, equ
ipment, fuel, food, housing and health
. It also
creates other
types of jobs, purchases goods which includes
es
sential basics and luxury items

from local

suppliers, creates a demand for transport services, pays unpaid state agents and
stimulates economic activity.
Hentsc
hel
etal
(2003
)

concluded that

despite exploitation

of the
workers in the mines,
a certain level ASM generates a high level of social acce
ss to the
economic value of their product by generating a significant cash flow through the community.


2.7.6

ASM can perpetuate poverty


An interesting argument is that, as

with all forms of mining, ASM is a finite activity exploiting a
non
-
renewable resource.

The mineral deposits get overexploited and exhausted.
As such, the
livelihood potential associated with any ASM site is limited to the life of the resource, which is
a

function of the accessibility, scale and quality of the ore, the market, the efficiency of
production techniques, the number of miners and the intensity

of their labour. Even the
towns of Usakos and Karibib

economic benefits and business opportunities des
cribed above
are
usually affected with the variation of gemstone demand.

Inefficient techniques used are

inappropriate and over
-
crowded sites will reduce the return from that resource for the
individual miners, the community and the national economy. ASM c
an only begin to
contribute to national poverty reduction if the technical elements of efficient mining are
managed in order t
o deliver economic development (
Krappmann, O 2006
).

ASM can attract
workers away from more sustainable livelihoods, such as farmin
g, and can destroy the future
potential of such areas if there is a resource found on agricultural land

(Gavin

etal 2006)
. The
work is often migratory as miners move from site to site, sometimes abandoning their homes
and fields when they move.



-

27
-




2.8

Constraints

and Issues


2.8
.1 Access

to F
inance

Access to finance is essential to enable the formalization, improved
production,

st
rengthening
of artisanal mining

and its potential transformation into small
-
scale mining

or medium scale
mining (

Nyambe and Amunkete 2001,
Dreschler
2001,
Krappmann

2006,
Ellmies
etal

2005
,
Appel

2010
)
.

However such finance is di
fficult to come by at all stages in the value chain
.

Gavin and Hilson

(
2006)

said

a
rtisanal miners typically present a suite of factors
which make
them unattractive to lenders. First, they tend to be already in debt. Second, they are
frequently

migratory and ensuring

potential repayment of credit is difficult. Thir
d, they
usually lack collateral
.

Fourth; they rarely have the capacity or ex
pertise to be able to present
a viable business plan for why they need the credit or how it will be effectively used. Fifth,
Senauer

(2002) also said
ASM is rarely well reported statistically and therefore does not allow
for risk analysis by creditors. And

finally, there is a dearth of lending institutions that provide
this type of credit or support for ASM. Given these constraints, artisanal miners usually resort
to the most accessible local source of funds, namely pre
-
financing by traders, which further
c
ompounds the problems of debt as these loans may demand high rates of interest and sale
of the product to the trader at a sub
-
optimal price for the miner. There is clearly
,

a need for
innovative financing arrangements to address this conundrum.

Krappmann
(2006) argued that

ASM communities frequently have a significant amount of
potential ca
pital moving through the system;

however this is widely dispersed and tends to be
spent on short term needs, either for survival or for luxury items which relieve the tedium
of
the work
.

Alternatives to direct finance can
also be used. For example in Namibia

a project of
hirin
g equip
ment

from Erongo Regional Council

has been successful in upgrading the miners
to a certain extent

of equipment and tools provision
.

2.8
.2
Mining Equipment, Tools and Machinery

One of the reasons why small scale miners are classified as small
-
scale miners is be
cause of
the kind of equipment and machinery they use. Dreschler (2001) indicated that in many
African countries, small
-
scale miners use traditional techniques and low level equipment in
excavation or digging
. In Namibia
, miners use rudimentary tools, manu
al devices

or simple
portable machines. According to Nyambe and Amunkete (2009)
these tools are

n
ot sufficient
to carry out mining activities. This makes the miners

not
to
perform to their maximum
-

28
-


capabilities. This lack of equipment is worsened by the
fact that miners do not have starting
capital in order to acquire the tools they require. More so, miners have no access to credit
from formal financial institutions for them to finance their operational requirements. An
excursion repo
rt by Ellmies

etal

(2
005) titled ‘Excursion to Small
-
scale Mining Operations in
Namibia’, lists the challenges faced by small
-
scale miners at Farm Neuschwaben, a small
-
scale
mining c
ommunity in the Erongo Regions. L
ack of adequate mining
equipment
is
the biggest
challenge
and
difficult

unsafe excavation conditions, the need for capital during periods with

no tourmaline, absence of a
buyer’s

scheme organized by government and sanitation

following in the list.



2.8
.3

Local

and
Sustainable Development Issues


Ellmies
etal
(2005) said that in many small
-
scale mining communities in some Southern
African countries such as, Malawi, Mozambique, Tanzania and South Africa, infrastructure
development has taken place in and around the areas where miners have chosen to settle in
orde
r to bring basic services to the people. Dreschler (2001) said in Malawi, facilities such as,
schools, health clinics, piped water have been built for the min
ers, as well as local villagers
.
However, many other services such as health and education are sti
ll not fully accessible by
artisanal miners in Namibia

and other countries
.


Nyambe and Amunkete(2009) said that
The European Commission in Namibia had a program
to support artisanal in certain regions of the country titled ‘The Small Scale Miners Project’

and according to its action plan, it assists miners in terms of project initiation and setup
registration of business entities, awareness campaigns, technical training on the production of
minerals, HIV/AIDS training,

business management, legal training,

health and safety, basic
jewelry manufacturing and environmental awareness.

In the

National Planning Commission
(1999
) it is reported that
i
nfrastructural development training has also been done. These
serve the employees and their families as well as local villagers. A primary school and a health
clinic have been built at mining sites serving employees, families and local villagers. In
additi
on to the above developments, small markets have mushroomed at most small
-
scale
mining sites in Namibia and Namibia.




-

29
-



2.8
.4

Gender I
ssues in Small
-
Scale Mining


It is estimated that women constitute 40
-
50% of the ASM workforce in Africa. Empirical
evi
dence indicates the same for Namibia. Women frequently use ASM as a supplementary
income source, often seasonally, and their presence around the mines may be less visible, so
they may be excluded from
estimates .The International Labour

Organization (1999) in its
report for discussion at the tripartite meeting on Social and Labour Issues in Small Scale
Mining of 1999 reported that about four million women are involved in ASM worldwide.
Namibia is recorded to have a proportion of up to 10
% or more. The number is this low
because the mining process is very taxing and the risks are high in that one is not sure of the
outcome even after extensive prospecting.
Hentschel etal

(2003
) said

q
uite a number of
women are involved in hand napping of
stone aggregate. These women operate illegally and
government is working on a system where these women will be able to form or be part of
associations, so that their activities can be facilitated and government can tax them. Dreschler
(2001) further explai
ns that within this sector, women are involved in the more informal work
of Small Scale Miners such as panning. However, despite the increased r
epresentation of
women in small scale m
ining and apart from the challenges faced by all small
-
scale miners,

wome
n still face some chal
lenges unique to them as women.


Cr
oss J
etal


(2010)

also said

that

w
omen in ASM face
challenges like; security, health

and
social ri
sks.

Firstly, h
ealth risks due to lack of sanitation in camps, malnutrition, and physical
trauma from the difficulty of the manual labour. Secondly, women in mining camps can suffer
miscarriages due to injury and stress. Thirdly, Sexual and Gender
-
Based Violence (SGBV) a
nd
abuse

is prevalent in the mines.

This is a

serious risk for women working in ASM. SGBV can
take many forms.

A recent study carried out in the DRC, which has

the worst rate of rape and
sexual abuse in the world, identified that ASM situations pose signif
icant risks of SGBV for
women and children,
family break
-
up and polygamy.






-

30
-



2.8
.5

Child labour in ASM


Child la
bour is a huge issue within ASM.
It is

understood to b
e caused

by poverty at the same
time how it

contributes to poverty.

In some areas, children may constitute a significant
component of the ASM workforce. This is universally condemned by the UN Convention on
the Worst Forms of Child Labour yet, in many countries, even if there is national legislation to
ban children from m
ines, enforcement may be severely lacking. ASM can have serious
repercussions on children’s physical and mental health and moral wellbeing, as well as
disrupting or preventing their
access to education. Conversely, ASM may be the only
livelihood.

In 1999,
the ILO es
timated that there were 13

million ASM workers worldwide, one
million of whom were children. The UN Convention on the Worst Forms of Child Labour
(No.182, 1999) identifies mining as “
work which, by its nature or the

circumstances in which it
is
carried out is likely to harm the health,

safety and morals of children”.

Appel (2010) said
c
hildren face many risks in mines including physical trauma, injuries, hernias, backache, eye
damage, damage to growing bones and organs, asphyxiation, mercury po
isoning, lung and
skin disorders, water
-
borne disease, malnutrition exposure and addiction to alcohol and
drugs.

Nyambe and Amunkete (2009)
added
that
prostitution, trafficking, STDs, HIV
-
AIDS are
risks children are exposed to

in mines
. ILO, through the me
mber countries has taken a two
-
pronged app
roach to eradicate child labour.

Firstly, upstream action to create a policy
-
making
environment conducive to regularization of ASM operations, and Secondly, downstream
activities to monitor children in the mining a
reas,
and
withdraw those found to be working
and place them in school or training facilities


2.8
.6 ASM and HIV/AIDS


In Africa HIV/AIDS is significant in the development of communities and poverty reduction.
When heads of families who are
the
primary wage

earners fall ill and cannot work, need
substantial medical care, or die leaving vulnerable family members behind, the impact is
devastating at emotional, social and economic levels.

Na
tional Planning Commission (2008)
reported

that


i
n Namibia, entire se
ctions of the active workforce are HIV positive with
significant repercussions for local and national productivity and economic development.


-

31
-


An estimated 300 000 people are li
ving with HIV in

Namibia and approximately 150 additional
people are infected e
very day. In the past year,

AIDS has claimed the lives of 3
500 people in
Namibia. More than 120 000 children have been orphaned by AIDS. This disease is a key
indicator in the development frameworks for Namibia, given its huge impact on health, family
welf
are, economic activity, future social and economic viability and other critical issues. Every
category of high
-
risk group for HIV/AIDS transmission can be equated directly with ASM.


National Planning Commission (2008a)
,

i
n terms of employment groups in Na
mibia, miners
are specifically noted as being high
-
risk as their work involves them being away from wives
and regular partners for long periods of time. The same applies to transporters. ASM

communities are migratory and it is known that large numbers of y
oung people away from
their homes represent a significant high
-
risk group for contracting HIV.
National Planning
Commission (2006)

said

that
Women are a high
-
risk group and, in ASM communities, women
frequently work in the sex trade, which dramatically inc
reases

their risk of exposure to HIV
and to othe
r sexually transmitted diseases
.

All of this indicates that ASM communities could
pose significant risks as hubs for HIV/AIDS transmission.


2.8
.7
Environmental Impact

of A
SM.


ASM have a significant negative direct or indirect impact on the environment which
eventually results in the poverty of communities.
E
llmies, R,
etal

(2005) said

i
n Namibia where
products such as gemstone

are mined
there is not much waste but like in many other
countries, small
-
scale mining has a considerable impact on the environment, for example the
use of mercury in gold mining.

Appel (2010)
listed a
number
of
physical environmental
problems from ASM activities
like deforestation, siltation of draina
ge system and land
degradation a
s
very
common.


Ellmies
et al
(2005) outlined the adverse environmental
impacts of various small scale mines around the country to be; open holes, audits and mining
pits, trenches, stee
p walls of the pits, waste rock disposal in the mining areas.
Erongo
Regional

Council’s action

plan for the Small
-
Scale Miners
Project

stated that

m
ining
settlements at
the T
-
junction of the Windhoek
-
Walvisbay road have
caused environmental
degradation in
the form of, “destruction of the vegetation due to collection of firewood,
missing toilets an
d unorganized disposal of waste. The ASM activities
disrupts ecosystems by
reducing photosynthesis and physically covering sedentary life forms including diversion

of
-

32
-


water courses, includin
g those needed for irrigation, c
ontamination of water sources which
included springs and wells

(Fifi 2003)
.


Hilson
(
2006
)

explained that

p
ollution relate
d to processing inputs, includes
mercury, which
bio
-
accumulates in crops

and animals, creation of physical hazards, mine shaft reinfo
rcement,
construct tools, and the

provide firewood and charcoal. They hunt to provide food for mining
camps, with very serious impacts on biodiversity

(Fifi 2003) .
Ellmies
et al

(2005
) concluded

that
t
here are health implications due to poor hygiene and lack of sanitation. Standin