SITUATION ANALYSIS OF THE SMALL-SCALE GOLD ... - WWF

least earn some income from mining on the property until it can be transformed into a
LSM enterprise with foreign capital, expertise and experience. Absenteeism in the gold
mining sector creates the worst of all possible worlds. The mine site becomes a free-forall,
and crime rules. Miners face uncertainties and are continually at risk of injury and
even death. The government should seriously consider revoking the permits of the nonactive
concession holders.
4.7 Brazilian migrant miners.
Among Brazilian miners, the range of investment capital and mining expertise that has
been mobilized varies considerably from unit owner to unit owner. At Benzdorp, there
are owners who operate one or more 6 inch units with heavy equipment, maintain
elaborate camps with a maintenance shop, short-wave communication equipment, a
satellite TV dish and other amenities. The owner usually has one or two foremen who
manage the day-to-day gold mining activities. The results for the month of November
2004 Table 5 are presented for a Brazilian owner who operates two mining units with one
backhoe excavator. Some equipment owners also operate a store, a restaurant or a camp
for sex-workers, as well as ATV‟s to transport fuel and supplies. Not all unit owners have
large en well equipped outfits. There are also poor unit owners who struggle to get by
with small 4 inch outfits. The owner usually works in the pit alongside the other miners
and maintains a very basic camp.
Investment cost of a hydraulic mining for land mining may vary between US $ 10,000
and US $ 20,000, including the cost of delivery to mine site. Inclusion of heavy
equipment would add another US $ 40,000 to US $ 60,000, depending on the location of
the mine site. The cost of a river dredge may vary from US $ 50,000 to US $ 200,000
depending on the sophistication of the technology used.
Payment to crew members varies with the level of investment and technology. A unit that
works with the help of an excavator will dig, prepare, and mine a pit about twice as fast
as a unit without an excavator. The cost of the mine operation, however, will be
substantially higher. As a result, the crew of a 4” or 6” unit without an excavator will
receive twice as much, 30% instead of 15%, of the gold production, because they will
work longer to produce the same amount of gold as a unit with an excavator. The crew of
a unit with excavator will produce more gold faster, but at a higher cost, and thus earn a
smaller percentage of the overall gold production. The table below outlines the payment
rates.
The table on the next page lists the monthly results of a SSGM enterprise employing two
hydraulic units at adjoining locations and one excavator in the Benzdorp area. The cost of
fuel is a key factor in the cost of production. During mid-2004 the cost of fuel was 24
grams of gold per barrel of 200 liters, but at the end of the year a very severe dry season
resulted in an all-time low water level, making river transport impossible. Fuel had to be
flown in and the price in December per barrel of diesel increased to 40 grams. The results
below are for the month of November. At that time, fuel had already increased to 30
grams per barrel, but the units were using fuel bought at the old price. In December,
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