Illegal mining: the threats

Materials World magazine
1 Dec 2015

Theft, protests and illicit trafficking in minerals are just some of the threats to mine security, an issue some companies can struggle to manage. How can they be addressed? Guy Richards reports.

In any given week, there’s a good chance that somewhere in the world a mine will have to contend with a threat to its security, whether it be an internal or external one, or motivated by profit or protest. Maintaining that security, across a site that typically covers hundreds if not thousands of unfenced hectares, presents challenges, yet over the years the industry has developed some fundamental rules for doing just that.

At an operational level, the challenges can vary significantly from country to country, and even from site to site, says Andrew Hames, Global Head of Mining at security company G4S. Some challenges are more prominent than others, such as theft of equipment or fuel, theft of high-value material, common assault, drug and alcohol abuse and illegal mining, he says. 

‘In fact, illegal mining is probably indicative of the security challenges faced by miners in developing regions. It often results in a high level of competition for access to resources, and violence that is fuelled and financed by well-connected networks with national or international reach. Links and collusion between mining staff and these unlicensed miners are common.’

These views are echoed by others in the industry. For example, according to a spokesperson for London-based security specialist Assaye Risk, ‘An example of a direct external threat is theft of gold-bearing material by trespassers or illegal miners. An indirect threat might be the collusion of local mine workers passing sensitive information onto external criminal gangs or syndicates. Losses to the business through theft represents probably the most prevalent threat to a company, with all materials and equipment having a monetary value.’ 

Sven Lunsche, spokesman for mining company Gold Fields, agrees, saying, ‘In some areas of the world, such as South Africa, Ghana and Peru, the top security issues are illegal mining and internal theft. One reason why illegal mining is such a problem these days is that the miners are using illegal chemicals such as mercury and cyanide, which harms our social licence to operate. Remember that in a typical mine only about 20% of it is active at any one time – the other 80% is not used or explored yet. That’s a large area in which illegal miners can operate.’

Social standing

The issue of a social licence to operate is a growing one for miners. ‘In developing regions like Latin America, Africa and parts of Asia, mining companies without a credible social licence to operate are facing increasing local resistance,’ says Hames. ‘This can take the form of strikes, protests and targeted attacks, impacting performance, share prices and the long-term viability of a mine.’ 

The key to preserving a social licence is through positive community engagement. For example, Lunsche says, ‘We allow artisanal small-scale mining – which is not to be confused with illegal mining – on some of our old workings, but only with our consent and subject to strict conditions. Alternatively, we allow local communities to use parts of our tenement areas that we’re not using for agriculture, which is very important for good community relations and which is the number one stakeholder issue these days, as it’s essential for our social licence to operate. If you have good community relations then security will never be a big issue.’

Assaye Risk agrees, its spokesperson saying, ‘The most successful security strategies will ensure that the mine’s role within the community is viewed favourably. Our experience shows that the safest mines are the ones appreciated by the local community and the staff they employ. External security threats can be greatly reduced if the local community has a stake in the mine’s performance, and internal threats reduced by good management and a high standard of safety. The mine will be safer if it is able to prove to the host country that the mining company’s presence is beneficial at both the local and national levels.’ 

This engagement needs to be persistent, consistent and proactive. ‘Whenever we go into a new area, we make sure we are in open dialogue with community leaders right from the start, discussing the needs of local people, the issues that affect them and any concerns they might have about proposed action,’ says Hames. ‘Maintaining that engagement is then a matter of continuing the conversation, and ensuring that we are open to new discussions with any additional, relevant parties.’

Lunsche adds, ‘Community conflicts have become more severe over the years. We’re having to work on our community relations all the time now – it’s all about proactive involvement.’ 

Community programmes are a vital part of these relations but, as Assaye Risk points out, they need to be properly managed. ‘When not properly conducted, these programmes can actually cause more harm than good,’ its spokesperson says. ‘Projects are begun but not completed when the mine changes hands, or the mining company is let down by its local government partners. Schools are built but the classrooms remain unfurnished, clinics constructed but neither doctors nor medical supplies arrive and, in many cases, the real needs of the community are not understood. 

‘Past practice shows that paying lip service to such projects can exacerbate an already tense situation, and that mismanagement can lead to increased hostility toward a foreign mining company. The local population is left feeling disillusioned and resentful towards the mining company, and this ill-feeling is often manifested in destructive acts towards the mine and its employees. The mining company is then forced to resort to expensive protective security services around its sites.’

The right staff

Another way to engage the local community is to hire local people as security staff. ‘We use this approach as a first line of defence – essentially by asking the local tribal chief for people to work for us patrolling areas and reporting anything untoward back to us. We use this system particularly in Ghana and the Far East,’ Lunsche says.

Staff training is essential here, says Assaye Risk. ‘The security staff must be fully trained and operate according to internationally recognised protocols and standards, including but not limited to the Voluntary Principles on Security and Human Rights [a set of guidelines for the extractive industries],’ its spokesperson says. ‘If they do not receive sufficient training and mentoring then they can’t perform their tasks to the high standard expected, which can breed discontent and mistrust on both sides. A sustained skills transfer programme of training and mentoring is therefore crucial to any mining company’s risk mitigation strategy.’ 

In a wider sense, some security roles are often outsourced. ‘The main external protection services, such as access control to the site, are outsourced to specialist third parties, but we also use them for tasks such as making sure our gold gets to the refinery, protecting against internal theft and so on,’ Lunsche says. By contrast, according to Assaye Risk, ‘Whether to outsource depends on many things – the history of the company and the individual operation, individuals’ capabilities, the operating environment, the company’s structure. Each problem will have its own solution.’ 

Once security systems are in place, mining companies will need to carry out regular reviews. But how regularly? Lunsche says, ‘We review our systems on a quarterly basis, but again there’s a strong element of community involvement there.’ According to Assaye Risk, it will depend on the situation. ‘Reviews should actively monitor changes in an operational environment such as new domestic legislation, the (long-term) impact of any decisions in the local community, and the effect of international factors such as commodity prices and market competition on operations,’ its spokesperson says. Meanwhile, Hames says, ‘We review our facilities at least every six months, or as and when the operating environment changes to require it.’

On top of existing threats such as theft and illegal mining, new threats are emerging now, and in Hames’ view the most concerning are terrorism and cyber attacks. ‘With terrorism, it is not only the mining sites but also the surrounding infrastructure that is subjected to attack,’ he says. ‘That means roads, railways and ports all become vulnerable. With cyber attacks, the number of hackers grows every year, and they come in different shapes and sizes, with differing agendas and vastly varying resources, making it harder to identify and intercept potential threats.’

The prospect of mine automation will bring its own security issues as well. As the Assaye Risk spokesperson puts it, 'This is an interesting question. The threat of theft and corruption will remain but perhaps the miners’ individual safety will be reduced. A company will also have to carefully consider the impact of reduced staff numbers on its relationship with the local community.'

Doubtless, the nature of security threats will evolve further as the industry itself evolves, but if it keeps to its policy as a force for good in neighbouring communities it should be well placed to continue countering them.