Artisanal Mining Poses Growing Financial, Environmental Risk to Gold Sector

Artisanal and small-scale mining (ASM) is becoming increasingly difficult for companies and governments to manage, leading to significant financial losses and environmental damage.

Mining firms routinely flag ASM as a serious risk. Gold Fields noted potential security, reputational, environmental, social, and financial impacts across its Ghana, Peru, and South Africa operations. AngloGold Ashanti also lists ASM as a source of business disruption. Southern Copper stated that illegal mining at its Los Chancas project in Peru must stop before further studies can proceed.

This issue is not treated as exceptional anymore. One reason for management struggles is treating ASM as a single risk. It ranges from informal individual miners to licensed operations, with varying legal status and environmental controls.

The financial impacts from undeclared production are substantial. Swissaid estimated that at least 435 tonnes of gold, valued around $31 billion, left Africa undeclared in 2022. Ghana alone saw a 229-metric-ton gap in declared gold exports over five years, worth about $11.4 billion, much of it reportedly moving through Dubai.

Environmental consequences are also severe. A 2025 global inventory linked 5.4 million hectares of deforestation to mining between 2001 and 2020. Around 70% of this came from mines smaller than one square kilometer. The Peruvian Amazon lost an estimated 139,169 hectares to gold mining deforestation by mid-2025. Furthermore, UNEP estimates artisanal gold mining accounts for 37% of global mercury emissions, making it the largest source worldwide.