Small-scale mining in Mongolia – a survey carried out in 2004. World Bank.

Young boy panning for gold

Young boy panning for gold

Summary

  1. In 2003 World Bank carried out a survey: Mining sector Sources of Growth study. The Sources of Growth study dealt briefly with small-scale mining, but the Bank decided that further investigation into the sector was warranted. However, in 2003 a very comprehensive baseline survey of small-scale mining was carried out in Mongolia financed by Canadian funding[1]. Another relevant study on small-scale mining and its role in mercury pollution in Northern Mongolia[2] was published in 2003. Since a recent baseline study of small-scale mining had already been carried out it was decided that the present World Bank project should describe the development and changes in the patterns of small-scale mining during 2004 with emphasis on the objectives of a needs assessment. The present survey was financed by Danish trust funds and carried out by a consultant from the Geological Survey of Denmark and Greenland (GEUS), Copenhagen, Denmark. During both in country visits the consultant liased closely with officials from several ministries (see list in Annex 1).
  1. Small-scale mining also termed artisanal mining did not start in Mongolia until 1998. The popular term for these miners in Mongolia are Ninja miners. This term comes from the circular green pans many of the gold miners hang on their backs while walking from the gold fields, making them resemble the ‘Ninja turtles’ of movie and cartoon fame. The Canadian funded report estimated that 100.000 small-scale miners were active in Mongolia in 2003. There is no indication that this number is decreasing. As pointed out by the Canadian funded report the number has increased over the last years and in all likelihood will increase considerably. The drastic increase is partly due to severe weather conditions making herding very difficult and also the general lack of other working opportunities. The very good and only little explored potential for gold in Mongolia supports the assumption that small-scale mining for gold will increase over time. Small-scale miners in Mongolia mine several commodities but the by far most important are gold, fluorspar and coal. Few are mining dimension stone and mercury.
  1. There has been a significant change in the distribution patterns of small-scale miners in Mongolia. Prior to 2004 virtually no small-scale mining was carried out in the Gobi desert. Early 2004 very rich vein gold deposits were discovered in the southern part of the Gobi desert. Some of these occurrences unfortunately occur in protected areas. This, however, did not deter small-scale miners to move in and start mining. The government immediately sent in the police and military to clear the area. Shortly after having been forced out a new group of small-scale miners moved in and this has been going on ever since. The area was visited during this mission and several small-scale miners were interviewed. This took place during night since the small-scale miners only work at night in order to avoid being caught by the police. There are strong indications for the police receiving bribes from the small-scale miners. Small-scale mining for placer gold is rapidly increasing in the Gobi desert. An estimate based on talks with officials from several aimags and what was observed during a field trip through Gobi desert gave an excess of 5000 small-scale miners active in the area.
  1. Some of the hard rock small-scale miners in Gobi claim that they truck ore either to Ulaan Baator or even further north in Mongolia for extracting the gold. Newspapers have indeed reported that several large trucks carrying gold ore have been spotted and confiscated by the police in Ulaan Baator. Several of the hard rock ninjas in the Gobi desert, however, only truck their gold ore to nearby milling centres. These centres are not located in villages or soum centres, but far away from populated areas.
  1. Mercury is used widely in Mongolia for extracting gold. It is so far mainly used by hard rock miners and not by placer miners. This is in contrast to other countries e.g. Kyrgyz Republic where mercury is used by virtually all placer miners but not by hard rock miners. There are some placer miners using mercury and it is likely that many more placer small-scale miners will use mercury in the future since it increases their recovery of gold. During the field trip in the Gobi desert one milling and gold extraction centre for hard rock gold ore was visited. This centre used as much as 5 kg of mercury for every 3 to 4 tons of gold ore. Fortunately the owner of this particular centre had learned the technique of recycling mercury by using a retort. The owner did, however, admit that 30% of the mercury he used was released to the environment through the fines and overflow. The mercury in the tailings is likely to contain appreciably amounts of gold. The owner was very keen to learn alternative gold extraction methods. He was also informed that the mercury and the gold in the tailings could be recovered. The total amount of mercury used and lost to the environment in Mongolia is difficult to estimate. In 2003 Japan International Co-operation Agency Mongolia Office carried out an: Action research on mercury pollution in Boroo area Mongolia (cited above). This report concluded that in Bornuur soum, a small area North of Ulaan Baator, about 500 kg of mercury is released to the environment by small-scale miners every year. This represents just a small fraction of the total number of small-scale miners in Mongolia. Questioning small-scale miners during the present project in Bornuur area reveal that the number of small-scale miners has increased and the release of mercury likewise since the Japanese survey took place.
  1. One of the main problems encountered for hard rock small-scale gold miners and owners of local gold extraction centres is the release of mercury during the amalgamation process for extracting gold. Most of them are aware of the toxicity of mercury, but in most cases they have no knowledge of how to recycle mercury or knowledge of alternative methods of extracting gold without the use of mercury. When confronted with the method of recycling mercury most of them claim interest in learning this technique. One teaching and training course was held in the Bornuur area North of Ulaan Baator. This course was highly successful and several mercury-recycling devices (retorts) were given to the participants of the course. The distributed retorts were copies of retorts invented in South America and described in detail in numerous UNIDO reports. The lack of knowledge of how to recycle mercury combined with the lack of knowledge by local medical doctors on diagnosing mercury poisoning has made it appropriate to suggest a new follow up project. A teaching and training project for medical doctors and small-scale miners in handling problems with mercury in Mongolia has been discussed with the Mongolian Government.
  1. Some small-scale miners sell their gold to Mongol Bank whereas most of them sell their gold to dealers in the field or to dealers in towns and villages. Signs with Buying Gold are seen in many shops in soum and aigmag centers. The price they obtain is close to world market price with a deduction for refining the gold. Placer small-scale miners sometimes recover gold nuggets. Few miners get an extra few percent on top of the gold price for gold nuggets whereas most only get the official gold price. Gold nuggets are collectors item and thus often fetch as much as 20% over the world market price. It would be good for small-scale miners if they could sell their nuggets to the proper price. Present estimates indicate that small-scale miners recover about 7 tons of gold per year (» 60 Mio. US$)[3].
  1. The geologic setting of Mongolia and the fact that commercial mining companies as well as small-scale miners frequently make new discoveries of gold occurrences indicate that small-scale mining for gold is not a passing phenomenon. It is likely that it will go on for several decades and will sustain an increasing number of small-scale miners.
  1. Small-scale miners can so far not obtain any license since no mining law for small-scale mining has been passed through the Parliament. Due to their illegal status many of the small-scale miners are harassed by officials and bribing of police officers is often necessary. However, in one aimag placer miners have obtained an agreement whereby they pay 4000 tugrug (3.3 US$) per mining group per month. A mining group is typically one family. For this sum the authorities leave the small-scale miners alone.
  1. The majority of small-scale gold and fluorspar miners are men, but during summer time many women and children participate in the mining operation. The ratio in summertime is 50% men and 50% women and children. In the summer season many students carry out small-scale mining in order to finance their studies. This information was collected by the Canadian funded survey and the present survey confirmed the figures in the areas investigated.
  1. Fluorspar small-scale miners work in an area south of Ulaan Baator. Their main problem apart from safety problems in the pits is that they have to stockpile the fluorspar until a buyer turns up. It often takes several months before they can sell the fluorspar. These miners have obviously a serious cash flow problem. If the government can establish funds giving microcredits to the fluorspar miners their cash flow problem will be solved. The ore is generally mined by men, but breaking the ore into smaller pieces and bagging it is often done by children and women.
  1. Small-scale coal miners mainly work during the period October to April. During summertime many of them are small-scale gold miners. Coal production by large commercial mines cannot meet the needs of private households, so small-scale coal miners play an important role in supplying coal for cooking and heating. The small-scale coal miners have serious safety problems. They dig tunnels more than 100 meters down. The roofs in the tunnels are not supported and frequent collapse of tunnels cause fatal casualties. In order to prevent a major disaster due to destabilisation of the area where small-scale coal miners work a mining engineer should be brought in to check the ground and give recommendations. There are a number of mining engineers employed by the commercial coal mines in the area, so it should not be too costly to bring some of them into the field of small-scale coal mining for short term jobs. Following the recommendations of the mining engineers the necessary material, mainly timber, should be supplied. Often methane in the coal seams explodes causing severe and sometimes fatal casualties. Methane detectors could be of great help. There is a well functioning mining rescue group in the coal mining area also supporting the small-scale miners, which does a good, job but lacks resources.
  1. Small-scale mercury miners recover mercury from a large mercury spill from a closed down Chinese placer mining operation. There is so much mercury so droplets of metallic mercury can be seen on the surface. This mercury travels downstream and dangerous high mercury contents are recorded in river water, river sediments, in human tissue and urine[4]. A pilot project of cleaning up an area of the Boroo River has been negotiated with the Mongolian Government.
  1. Small-scale mining cause degradation of land surface. The problem in hard rock mining is minor. Placer gold mining results in many small holes and tunnels dug in riverbanks. Small-scale miners should of course level the heaps of gravel and fill the holes they have dug. It should, however, be emphasised that much of small-scale mining activity takes place in areas, which have previously been exploited by commercial companies, and these companies have left the areas without reclaiming. The small-scale mining degradation is very minor compared to what the commercial companies have caused. It may therefore be difficult to persuade them to reclaim the land they have spoilt considering that most of the major placer mining companies do not reclaim the areas where they have mined. In the Gobi Desert where no commercial placer gold mining has taken place but thousands of small-scale miners mine placer gold some degradation takes place. Especially holes pose a danger to people. These holes are not fenced off and people and animals can easily fall into the holes was fatal results.
  1. There is still no legislation in Mongolia dealing with small-scale mining. There are several versions of a draft mining law in circulation. In May 2004 during the first in-country visit a general election was due in July. Thus nobody had any interest in a dialog of how the future mining law for small-scale miners should be written. During the second in country visit September-October the ministers for the different ministries had not been elected so no dialog was possible at this time either.

[1] Ninja miners of Mongolia. Assistance to policy formulation for the informal gold mining sub-sector in Mongolia. By Mongolian Business Development Agency for Canada fund Mongolia (2003)

[2] Action research on mercury pollution in Boroo area Mongolia. Compiled by B. Tumenbayar for Japan International Cooperation Agency Mongolia Office (2003)

[3] Ninja miners of Mongolia. Assistance to policy formulation for the informal gold mining sub-sector in Mongolia. By Mongolian Business Development Agency for Canada fund Mongolia (2003)

[4] Action research on mercury pollution in Boroo area Mongolia. Compiled by B. Tumenbayar for Japan International Cooperation Agency Mongolia Office (2003)

Project carried out under the auspices of Geological Survey of Denmark and Greenland (GEUS).