Mozambique's ruby mines generated $6 million in revenue last year, nearly a fifth of the country's total mining income, but the government's crackdown on 60,000 artisanal miners threatened to strangle a vital source of economic activity and tax revenue. The mines sold some five million carats, yet policymakers had long treated the local diggers as criminals rather than entrepreneurs.
That's changing. Experts gathered in Accra, Ghana, this week for a high-level conference on critical minerals and governance, where researchers presented evidence that formalizing artisanal mining could unlock billions in lost revenue and prevent the kind of instability that's plagued resource-rich African nations for decades.
The Informal Economy's Hidden Value
Fatima Mimbire, a project director and extractive industry researcher from Mozambique, said the country had regarded artisanal miners as illegal until research revealed the economic reality. "Many of them are members of communities where these resources are found but are not integrated into the mining economy," she said on the sidelines of the Regional High-Level Conference on Governance, Critical Minerals and Conflict in Africa, organized by the Open Society Foundations. "The state always focused on big mining companies, excluding the local people."
The three-day forum called on African governments to place democratic governance, accountability, industrialization, peacebuilding and citizen participation at the center of the continent's response to growing global demand for strategic mineral resources. In Mozambique, the lack of inclusion is partly blamed for the rise of extremist groups that have forced thousands from their homes and sometimes attack mines.
Mimbire said Mozambican communities had traditionally practiced artisanal mining to survive, long before global firms arrived in their areas. A special license had been created for local small-scale miners, though it had never been implemented. The lack of structured engagement with artisanal miners has fueled illegal dealing, including smuggling. "They are not paying taxes because they are marginalized," she said. "No one takes them into account. They are just surviving."
The Cost of Exclusion
The informal market costs governments substantial revenue. "For me, the problem is the promise and expectation of quick money that big companies can pay upfront," Mimbire said. "But this informality is costing the government a lot of money in revenue. In informal trading, they find buyers who pay less than they should. That is why some foreigners are fueling that informality because they know they can pay less."
Mozambique is reversing the trend by allowing informal miners to create associations that engage directly with authorities, register small firms and train members on their rights and obligations. "They are now able to explain that they are small-scale miners, not criminals," Mimbire said. "They are training their members, looking for partners, and formalizing their operations. The locals have also organized themselves into groups and scheduled the sale of their minerals on specific days so they do not have to compete. We can prevent conflicts between formal mining companies and artisanal miners. The state should incentivize the associations and implement programmes to introduce new technology to them."
Dr. Chukwuemeka B. Eze, Director of Democratic Futures in Africa at Open Society Foundations, based in Dakar, Senegal, said most mines are located in rural areas and local communities are often told to relocate and allow mining firms to take over. Sometimes they resist and other times they're forcibly removed, leaving long-term resentment. "If you look at most of Africa's critical minerals today, they are all in rural communities," he said. "Most of these rural communities that have these critical minerals are also places where there are issues of conflict and civil war."
Governance and Revenue
Eze framed the challenge as institutional. "These are governance questions," he said. "If the government cannot manage mineral resources, if it cannot distribute wealth or involve local communities in decisions on how to manage critical minerals, it increases the propensity for conflict. Lack of transparency is responsible for some of the poverty that we see in Africa today, as well as some of the conflict."
Patient Matabishi, Civil Society Coordinator in the Democratic Republic of Congo and leader of the NGO Dynamic Community for Social Cohesion and Development, said stakeholders from the Democratic Republic of Congo, one of the world's most mineral-rich countries, have experienced illegal mining for decades. "Many times, mining companies lie to the public," he said. "They promise to build roads or schools but vanish after extracting the minerals. We need a strong link between communities and governments to ensure leaders listen to the public."
Matabishi said if you go to a village that has minerals, you'll often find it has no roads or other infrastructure to serve the people. The people feel marginalized. "Unfortunately, outsiders take advantage of that and drive a wedge between communities to profit from it," he added.
Conflict in the Congo is both a cause and an effect of poor governance in the mining sector, especially the marginalization of artisanal miners, Matabishi said. In some mining areas communities have had to pick up arms to protect their resources, while in other places people picked up arms because they were incentivized to join the looting or were funded by outsiders to do so. "The local people are not stupid, even if they may not have gone to school or are old," he said. "They know what they want. If the government signs contracts with mining companies, it is very important that it speaks with the people and properly explains what is happening. Many times, this doesn't happen."
The Strategic Stakes
As of 2026, current UN data show that nearly a third of the world's critical mineral reserves, including cobalt, copper, lithium, manganese, nickel, graphite, bauxite, platinum and other rare earth minerals, are found across the Democratic Republic of Congo, Tanzania, South Africa, Zambia, Guinea, Mali, Morocco and other African countries. That makes Africa's role in the global energy transition, including the production of electric vehicle batteries, hydrogen power technologies, electronics and electric vehicles, increasingly important.
Washington, in its National Security Strategy, has framed African critical minerals as essential to diversifying supply chains away from China, securing resources for clean energy and advanced manufacturing, and deepening partnerships through investment, infrastructure and diplomatic agreements. It identified corridors such as the Lobito Corridor in Angola and bilateral frameworks with mineral-rich African states as part of that strategy.
Dennis Mwinkpeng, a Resource Economist at Open Society Foundations, said artisanal miners sometimes produce more minerals than formal companies in countries such as Ghana and Zimbabwe. "We have underestimated the potential of this sector for a very long time," he said. "For instance, in Ghana, more than 50 percent of gold production in 2025 came from small-scale miners. It is not that there are no big companies in Ghana, but the output of these small-scale producers is significant."
"A large portion of the supply chain rests with local artisanal miners," Mwinkpeng added. "With big mining companies, very little benefit goes to communities. With small-scale miners, whatever they earn, they reinvest in the local community, whether through procuring goods and services or supporting related businesses."
Why This Matters:
Africa's mineral wealth represents hundreds of billions in potential government revenue that's currently lost to informal markets and smuggling. Formalizing artisanal mining isn't just about social inclusion—it's about capturing tax revenue, stabilizing supply chains that Western economies depend on, and preventing the kind of governance failures that create space for extremism and Chinese influence. When more than 50 percent of Ghana's gold production in 2025 came from small-scale miners, it demonstrated that local entrepreneurs can outproduce multinational corporations when given property rights and market access. The question is whether African governments can implement the regulatory frameworks and infrastructure investments needed to integrate these miners into the formal economy, or whether they'll continue to sacrifice billions in revenue while driving productive citizens into the arms of smugglers and insurgents.