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 non-
gold 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.