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  1. 1. Certification of ASM: A win-win solution 6th Meeting of the ICGLR-OECD-UN GoE Forum on Responsible Mineral Supply Chains The Alliance for Responsible Mining Kigali 13-15 Nov 2013
  2. 2. THE FAIRMINED INITIATIVE Is a certification initiative that : 1- enables responsible artisanal and small-scale gold miners to reach the global markets while recognizing a development premium/incentive for miners in order to promote positive change in the sector and the community 2- offers to companies a market advantage as well as a response to higher consumers’ expectations on responsibility and positive impact on producing countries.
  3. 3. PILARS OF FAIRMINED CERTIFICATION PILLAR STANDARDS OBJECTIVE Sets the supply-chain requirements and gives the scope of the certification impact TRACEABILITY Links the producer and downstream supply chain up to consumers 3rd PARTY CERTIFICATION Credibility, Integrity & Accountability PREMIUM & DEV. FEE Feasibility & Sustainability FAIRMINED MARK Assurance & Recognition Beneficial to all actors in supply chain, from mine to shelf.
  4. 4. FAIRMINED TODAY • 4 audited communities producing 350-400 kgs of Gold annually - 1400 miners • 30 mines in the process of certification in 4 countries producing 1600 Kg gold • 3 audited refiners servicing the supply chain • 75 jewelers in 10 countries on board in 3 continents.
  5. 5. FAIRMINED: a solution for every business need I. FAIRMINED LABELED • Full track and trace of gold • Clients buy gold and uses a FAIRMINED authorized supply chain • Product claims can be made on the exact origin of the gold • Allows for labeling on specific products or lines • It allows clients to appropriate the story and the impact on communities • It offers customers in store materials of labeled products
  6. 6. FAIRMINED: a solution for every business need II. FAIRMINED INCORPORATED • Licensees can purchase gold through a Fairmined registered operator • The gold is then integrated into the licensees supply chain, where mixing (mass balance) is allowed • • • • • Annual audit using FM information system required to demonstrate how gold was integrated Reduces supply chain costs of full traceability It allows corporate claims on volumes of FM gold purchased It allows corporate claims on a % of gold sourced from responsible & certified ASM It allows negotiated premiums when a certain volume threshold is reached 18kg/y/mine III. FAIRMINED CERTIFICATES • The licensee acquires FM certificates, which represent an equivalent volume of production of certified FM gold • The licensee does not have to buy gold or integrate it into its supply chain • The gold is integrated by a FM registered operator and enters formal channels • Eliminates all transaction and traceability costs • It allows corporate and impact claims on equivalent volumes of FM gold produced • It allows claims on % of gold sourced from responsible ASM
  7. 7. The PREMIUM is essential for the miners • Miners lack of working capital makes it difficult for them to accumulate volumes of gold to export or meet economies of scale • Costly implementation for miners (financial and time wise) • Increased business costs for miners (healthcare, labor, taxation) • Need of financing for equipment, and investments in productivity and cleaner technologies
  8. 8. The certification system value for downstream companies Value creation for companies: • Excellence • Responsibility • An unique product for unique brands • Vanguard attitude • Internal incentive Cannes 2013: Marion Cotillard wearing Fairmined Gold made jewels
  9. 9. FORMALISATION OF ASM MINERS AND THE FAIRMINED STANDARD CHALLENGES • Lack of appropriate policies and incentives for formalization • Availability of mining titles • Financing the process and access to credit • Cultural and training challenges • Legalization is not formalization • Institutional strengthening • Generation and access to appropriate information OPPORTUNITIES • Complementarity with other initiatives that also promote formalization: UNEP Global Mercury Program, OECD DDG, etc. • The FAIRMINED Standard takes a holistic approach to ASM and sees formalization as a PROCESS.
  10. 10. SCALING UP THE FAIRMINED INITIATIVE INCENTIVES • Market incentives; aware and educated consumers • Public opinion and advocacy CHALLENGES • Lack of financial mechanisms for bringing more ASMO’s into the system (taking that first step from informality to formality) • Sustainability of the system to bring more miners and develop standards • Possibility of excluding most vulnerable miners while focusing on large communities • Unit cost of full traceability is inversely proportional to volumes produced
  11. 11. THANK YOU Transforming Artisanal and Small-scale Mining (ASM)