De Beers Group's Building Forever sustainability framework encompasses the company's entire business pipeline, is embedded within its operating model, and sits at the heart of everything it does. It is a promise to De Beers Group’s host communities, stakeholders and employees that every diamond discovered or sold by De Beers will have a positive and sustainable impact on people and the planet. Building Forever encompasses 12 ambitious sustainability goals across four thematic pillars that De Beers Group has committed to achieving by 2030. The pillars are: leading ethical practices across industry, partnering for thriving communities, protecting the natural world and accelerating equal opportunity.
Artisanal and small-scale mining forms an integral part of the Leading Ethical Practices Across Industry pillar, with the following specific goal: by 2030, De Beers will deliver scalable solutions to raise the livelihoods of artisanal miners. GemFair is the programme that will enable the achievement of this goal.
Over the next eight years, GemFair will expand our support for the formalisation of the artisanal mining sector to include more artisanal mine sites raise standards to protect workers and the environment and partner to scale the GemFair model to new regions and minerals. In so doing, we will encourage others to source responsibly from the artisanal and small-scale mining (ASM) sector and amplify the voice of miners working within the sector.
How we will get there
Mine site reclamation
This year, GemFair focused on testing solutions to help raise the livelihoods of artisanal mining communities in Kono, District, Sierra Leone, where GemFair operates. A focus area was on mine site closure, which is the process of bringing abandoned mined pits back to productive use, creating local employment, increasing food security, and enabling mining communities to grow crops to sell at the local market.
The majority of ASM sites in Kono are abandoned at the completion of mining activity without any backfilling. This practice means deep pits are left in the ground which poses a safety risk, serves as a breeding ground for water-borne diseases and represents a waste of productive land.
We decided to implement a pilot programme to better understand the practicalities of reclaiming mined out areas, specifically, how long it would take, the cost per site and how we could scale the initiative. We selected three areas of approximately one acre each in size, chosen in close consultation with community stakeholders and government authorities.
Then we worked with a team leader from the community to hire local artisanal diggers and farmers to work on backfilling, monitoring their progress several times a week. Once the backfilling was complete, we handed over the land and donated seedlings at each site.
Back-filling mining pits
Planning the area for cultivation
First harvest of local greens
We're now partnering with members of neighbouring villages – 80 per cent of whom are women – to cultivate the land. The crops produced are the villagers to keep and we pay their daily wage. The project has seen significant success to date, and we plan to roll-out across several more areas in the coming year.
Here are some progress indicators
What reclamation means to us
The pilot is exciting for many reasons, not least of which is that we are working with a community that has been hard-hit economically by the pandemic. Food prices have increased since 2020 and we are working to help bolster the community’s food security through returning abandoned ASM sites to productive use. Likewise, the practice of reclaiming ASM sites is sorely lacking in the ASM sector globally. Through this pilot, we want to show that reclamation can be done in a frugal manner and that standards for doing so are feasible for artisanal miners.
Another exciting spinoff project is the inclusion of a potential carbon capture component. We’re investigating the concept of artisanal mining communities contributing to the capture of carbon, receiving additional income from carbon credits and contributing to the essential work of climate change adaptation. While early days, our vision is to try and bring these elements together. We will share more insights from this exploration work in the year ahead.
Access to Finance programme
Accessing formal finance is a significant challenge for artisanal and small-scale miners. This is due to several factors, including high levels of informality, a lack of available credit, limited or non-existent credit risk profiles and high capital investment requirements. The ASM diamond landscape is also notorious for irregular production patterns, which further disincentivises formal financial service providers from investing in the sector.
The current financing landscape for ASM in Kono, Sierra Leone is therefore predominantly informal. These informal relationships and the rules that govern them are complex and opaque. Although informal finance has an important role to play in supporting the diamond economy, the rules are rarely set to favour the miners and the surrounding community. Uncapped risk premiums and debt accrual from previous seasons can lead to an unhealthy state of dependency between miner and supporter, which can negatively impact prices paid for diamonds and the terms of future arrangements. Since these relationships are rarely governed by written, enforceable contracts, miners expose themselves to the risk of shifting goalposts and even theft of the diamonds that they recover.
In short, informal finance does not provide the predictable and rules-based environment necessary for businesses to thrive. The cycle of dependency and debt creates knock-on effects often observed at artisanal mine sites, including low standards, low wages and poor environmental management.
GemFair’s Forward Purchase programme is our way of helping address the gap that exists in access to formal finance for participants in the ASM sector. We do so by referring to the way informal financing is structured in the sector, whilst extending finance on fair, predictable, mutually aggreable and enforceable terms. Our agreements with participating miners treat the creditor and debtor as equals by:
- Clearly and transparently documenting the terms of the financial agreement in a contract
- Absorbing the risk of irregular production by writing off credit that remains unpaid at the end of the FPA period (not longer than the annual mine cycle)
- Capping the risk premium so that highly productive sites retain a greater proportion of the income they generate from diamond sales
- Supporting cash flow of miners by paying out 30 per cent of the market value of production, even before the forwarded finance and risk premium has been repaid
- Guaranteeing fair market value to all FPA members.
GemFair does not intend to make a profit on this programme. Instead, we see the programme as a vehicle to allow more miners to receive fair and equitable access to finance, drive improvements in mine site management, leverage performance against our standards and drive diamond volume in support of the long-term commercial viability of responsible ASM diamond sourcing.
The results of the FPA pilot are positive thus far, showing that greater access to finance can be an important tool to support formalisation of business practices and improve standards at ASM sites. Throughout the course of the next year, we will further explore how our FPA programme can be fine-tuned to support these outcomes.
Improving diamond recovery rates
Many miners work with dated and inefficient systems for processing diamondiferous gravel. GemFair worked with a mining expert to introduce and trial modern wash-plant technology to separate diamonds from the gravel in which they are found. Gravel and water pass through a screen and then across trays where diamonds, and other heavy material, are trapped.
We hosted the wash plant’s manufacturer in Sierra Leone, where he showed our team how to use the machine and introduced it to miners at several sites. We conducted several trials and found that the plant has a better design than the existing plants miners use in Kono, making diamond recovery a faster and more efficient process. Next year we’ll test out a smaller design that is easier to move between remote mine sites. We also plan to identify and upskill local manufacturers, so the equipment parts do not need to be imported.
We also procured several hand augers and learned how to use them at participating mine sites. Augers are hand-operated drills that sample the overburden at a mine site and can measure the depth of a diamond-bearing gravel layer. At an ASM license area this is a very useful component of assessing the viability of a mine site and can give confidence to the miner and an investor before proceeding with work.
Testing a new wash plant in the field
We're using the hand augers to confirm that miners are mining in locations where there is a gravel layer, which could potentially hold diamonds. As we learn more, we hope to use the hand augers as a tool to help miners determine whether an area has been mined before.