PAGE and UNDP Ecuador Release Study on Artisanal Mining

Mining in Ecuador

Credit: PNGQ, UNDP Ecuador

Utilising the Targeted Scenario Analysis (TSA) methodology developed by UNDP, this study assesses the impact of two management scenarios within Ecuador’s artisanal and small-scale gold mining sector (ASGM). Engaging with stakeholders from the private and public sector, the study aims to help decision-makers design and implement sustainable policies that incorporate the value of ecosystem services. The results show the possibility for significant gains for artisanal miners, processing plants, laboratories and the state if miners sell their ore to small-scale mining plants that are supported and strengthened with appropriate, mercury-free processes. 

Currently, about 100,000 people depend on Artisanal and Small-Scale Gold Mining (ASGM) in Ecuador and ASGM produces 85% of Ecuadorian gold with an estimated annual value of USD 300,000,000. The TSA estimates the social and economic gains or losses resulting from continuing current practices (i.e. the business as usual scenario-BAU), which cause a high environmental impact compared to a more sustainable path that promotes socially and environmentally responsible practices. This alternative path is termed responsible mineral processing (RMP). 

The proposed RMP scenario promotes a change in the mineral processing model, where processing plants are instrumental in increasing profits over ten years. Within the RMP scenario, the avoided costs due to Mercury contamination during the gold recuperation process could be up to USD 80,000,000 per year. This includes between USD 25,000 - USD 40,000 increase per year for small and medium-scale artisanal miners; USD 134,000 increase per year on average for mineral processing plants; and up to USD 65,000 increase per year per plant in royalties for the State.

PAGE supported TSAs are part of a broader UNDP effort to use economic valuation to advance the mainstreaming of sustainable development policies. Lessons learned from the direct support of PAGE are being used to also to influence and inform additional TSAs financed by UNDP-managed GEF projects including some PAGE countries. In 2021, PAGE is additionally supporting TSAs in Paraguay on livestock/beef; in Thailand on Illegal Wildlife Trade; and in Kazakhstan on Forestry.