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Four Impacts of COVID-19 on ASM in Mozambique

Rubies from Mozambique by Levin Sources

This article originally appeared on Levin Sources website. Reposted by request.

November 5, 2020, by Olivia Lyster, Salvador Mondlane Junior and Elton Maiela

The COVID-19 pandemic has seen damaging impacts on a wide range of economic and non-economic sectors in Mozambique, including the mining sector.

This Insights post focuses on our findings from the country drawing from a research effort into the impacts of the COVID-19 crisis on artisanal and small-scale mining (ASM) communities in Mozambique, Uganda, Zimbabwe and the DRC, as part of a global data collection exercise on the impacts of COVID-19 in ASM communities levin Sources launched in June. The research is funded by the World Bank’s Extractives Global Programmatic Support Multi-Donor Trust Fund and coordinated through the Delve COVID-19 Impact Reporting initiative, which covers 23 different countries. The blog is based on repeat surveys conducted with 35 people working on gold and construction minerals at ASM sites across five weeks in three Provinces of Mozambique (Maputo, Manica and Zambezia). It also draws on seven key informant interviews with representatives from the government, the mining sector, and NGOs.

An initial policy response in Mozambique constituted the enactment of a state of emergency on the 1st April 2020, imposing measures such as the closure of schools and other places of congregation, quarantine measures for international travel, social distancing, and requirements for more frequent handwashing and the use of masks, amongst others. The thirty-day State of Emergency was renewed four consecutive times, and as from the 7th September the Country declared a State of Public Calamity which remains in place and envisages the continuation of most restrictions indefinitely, but defining the phased resumption of some key and low risk economic activities.

Below we outline 4 key findings from our study, including implications for COVID-19 policymaking responses in the ASM sector.

1. The COVID-19 pandemic and resulting restrictions have seen a significant reduction in ASM activity in Mozambique.

The vast majority of respondents (90% when the study ended on 31st July) reported throughout the study period that their ASM activities had been significantly impacted by the pandemic, resulting in a decrease in their ability to work as before. Government-imposed COVID-19 response measures were the main reported cause for this decrease. Restrictions at mine sites included requirements for water and soap or ash for handwashing, disinfectant and masks suitable for mining work. Social distancing measures meant that many mine sites were forced to halve the number of workers on site at any time, introducing worker rotation systems such as weeklong shifts. Respondents reported that mining associations that were not able to comply with these measures were forced to shut down completely. Stakeholder interviews revealed disproportionate job loss for migrant workers – a group vulnerable to external shocks. Zimbabwean nationals were the main affected group in Mozambican ASM, with many returning to Zimbabwe in the early stages of the pandemic having lost access to mining income .

The ASM workforce has reportedly remained low throughout the same period across all study regions, although a slight recovery was reported by some respondents towards the end of the study.

2. The reduction in ASM activity has had critical impacts on the livelihoods of ASMs

A reduced ability to work at pre-COVID-19 levels has had a significant negative impact on the livelihoods of ASM miners in Mozambique. It has resulted in a sustained depression in miners’ incomes through the COVID period, with the 85% of respondents who initially reported a decreased income growing to 100% by the end of the study.

Reduced incomes have a knock-on effect on the livelihoods of households and families. Findings from the study show a small but sustained increase in the number of respondents who reported experiencing a decrease in the availability of food throughout the study. With food price inflation high since late 2019, reductions in household income can trigger sharp drops in the availability of food for ASM households. Given the country’s reliance, in normal times, on imports of basic agricultural and consumer products from the surrounding region, restrictions at borders have had knock-on effects on the availability and supply of these products, sparking increased domestic price inflation. In the face of this, many households are resorting to agriculture to survive. Whilst availability of fertile land was not cited as a significant obstacle for the majority of the study’s respondents, the high prices of agricultural inputs can be prohibitive.

3. Unlike in other contexts, mineral trade in the ASM sector does not seem to have been badly hit in Mozambique.

Studies from around the world have shown the catastrophic effects of COVID-19-related supply chain disruptions on the value captured by ASMs, particularly in gold supply chains. Despite record highs in the global gold price, many ASM miners in the early months of the pandemic were reporting being offered extremely low prices at mine sites, and difficulties in accessing buyers due to domestic movement restrictions. Whilst this is now normalising in many contexts, Mozambican ASM miners appear to have escaped price volatility and market disruptions. Our study shows that gold prices at ASM sites remained relatively stable throughout the first months of the pandemic. We also found no indications of increased difficulty in selling gold. Unlike in other contexts, respondents in Mozambique reported that they were still selling their gold to the same buyers as before, and were not experiencing increased difficulties in accessing them. The lack of domestic movement restrictions appears to have allowed the existing system – buyers often playing a dual role as financiers, including in the provision of equipment and supplies such as mercury and food – to continue with limited interruptions. Allowing the free movement of buyers and traders, who usually have their own means of transportation, appears to have avoided the supply chain bottlenecks experienced in many other country contexts around the world.

Similarly, in the construction minerals sector, whilst other geographies have experienced a significant drop in building and demand for inputs, the Mozambican construction sector appears to be running strong. Demand is fuelled by cheap labour costs, driven by an expansion of the informal sector as it absorbs rising levels of urban unemployment. This inflated labour force has seen a high demand for construction minerals, meaning that ASM producers of sand, stone aggregate, clay bricks and other commodities do not seem to be experiencing the same downturn as their counterparties elsewhere on the continent.

4. Government service provision to the ASM sector has centred to date mainly, if only, around awareness raising.

This has been very effective. The majority of respondents perceived themselves as informed on the pandemic from the beginning of the data collection. Awareness of COVID-19 prevention techniques was also very high - not a single respondent throughout the study answered that they did not know how to prevent themselves from getting sick with the virus. Respondents also reported that civil society organisations were contributing to the efforts to raise awareness in more remote communities.

Awareness-raising, however, is not enough. The above findings, though limited, show clearly that some of the most substantial effects of COVID-19 on ASM communities in Mozambique arise not from the virus itself but from the measures imposed to prevent its transmission. Whilst this is inevitable, and is the case around the world, more must be done to support some of Mozambique’s most vulnerable communities, for whom a sustained loss of income can and will become catastrophic.

Previous pieces in our COVID-19 impacts series have outlined the importance of prioritising the ASM sector in COVID-19 policy and programming responses. They have also highlighted the importance of reliable data and a long-term outlook to ensure these responses are both effective and sustainable. The Mozambican context is no different.

Firstly, future policy responses must be evidence-based. They must be built on reliable, up-to-date and context specific information in order to respond to the particular needs of ASM communities across the country. Secondly, they should be context and group specific. Data collected on the sector should be disaggregated by geography, mineral, gender and nationality, amongst other factors, in order to understand the different impacts on those working across the mineral sector as well as on women, migrant workers and other marginalised groups. Thirdly they must be dynamic, able to evolve alongside the rapidly changing global context.

To present COVID-19 as a unique development opportunity is at best presumptive and at worst insensitive to the widespread suffering it is causing. It is, however, a chance to leverage the current unprecedented rallying of international resources to ensure that ASM sector responses, aligned with the above best-practice principles, meet the specific, evolving needs of ASM communities in Mozambique and around the world.

Article Mozambique Gold, Development Minerals Political, Formalization, Supply Chains, Social, Gender, Health and Safety, Labor and Working Conditions, Livelihoods

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