FAIRTRADE & FAIRMINED GOLD FAIR TRADE CONFERENCE BASELSHOW 2010 – March 19 th 2010 Patrick SCHEIN - ARM Board Member Alliance for Responsible Mining

Size Matters! Small-scale mining Artisanal mining Artisanal subsistence mining Large-scale mining Not ASM

Size Matters! 10 km 100 m Not ASM

Size Matters!

… in all developing countries, where poverty persists Artisanal Small Scale Mining (ASM): Where? Source: CASM / World Bank

ASM Gold : Facts & Figures – 10-15M miners => +60M people indirectly – 90/10 ratio (volume to workforce) – In 50 developing countries – Generating MT of Gold (5-8 BN$) (8 to 12% world mine supply) – Low Mechanization => Very High local economic value index compared with LSM => Guinea example: 1 mine produces 8 MT with direct workers and high technology ASM miners population produces 7MT of Gold with no mechanization “HAND MADE GOLD” – Offers an opportunity for growth and an escape from poverty

The Answer: THE 1ST EVER INDEPENDENTLY CERTIFIED RESPONSIBLE ASM GOLD IN THE MARKET

Why Fair Trade? ‣ It directly raises awareness of consumers and campaigns for changes in the rules and practices of conventional international trade. ‣ Economic incentive for positive transformation: TRADE NOT AID – It’s a Business Model ‣ Allows access to differentiated markets ‣ Recognizes change is a process: minimum and progressive requirements ‣ Long term vision ‣ Pays a fair price ‣ Pays a FT premium to producers ‣ Ensures traceability ‣ Ensures community development & environmental sustainability ‣ Bottom up, democratic & transparent processes

Main Standards Requirements Fairtrade/Fairmined Gold is exclusively available from ASM Minimum requirements and progressive improvements Miners must be formalised and ORGANISED Legal mineral rights are a must Requires consultation and consent of local community authorities, and grievance mechanisms to be in place Payment of all taxes and royalties - accounts on top No support to illegal activities or armed conflict Management of toxic substances (no whole ore amalgamation – obligatory use of retorts) Strict health and safety requirements NO child labour Rights for women miners Physical traceability within the production and mineral processing links

FAIRTRADE & FAIRMINED GOLD ‣ First ever third party independent certified Gold to bring social, environmental & economic development in ASM mining communities ‣ HISTORIC partnership between FLO and ARM. ‣ ARM developing Supply/FLO creating Demand ‣ => Joint HALLMARK: FAIRTRADE & FAIRMINED ‣ Shoppers believe buying jewellery for special occasion holds greater significance if it carries FAIRTRADE & FAIRMINED hallmark ‣ Minimum price for the Miners: 95% of LBMA ‣ Social Premium: 10% of LBMA price + 5% for Ecological Gold (no chemical use and strict restoration requirements). ‣ Pre-financing : 60% ‣ TRACEABILITY

FAIRTRADE & FAIRMINED GOLD ‣ Safe use and responsible practices of toxic chemicals with reduction commitment and elimination where possible over time ‣ Contributes to peace-building in violence and conflict aera ‣ Piloted with 9 legally established producer organisations with mineral rights in LATAM representing 350kg/year production ‣ pilots expansion plans in Africa in 2010 ‣ Initially launched in the UK and then rolled out to other countries ‣ Vision: capturing 5% of the Industrialized jewellery market

THANK YOU