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Determinants of Market Participation of Artisanal Gold Miners: Evidence from Kumuruk District, Northwest Ethiopia

Received: 20 March 2024     Accepted: 8 April 2024     Published: 28 April 2024
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Abstract

In Ethiopia as well as most other regions of the world, the artisanal mining industry was mostly ignored, because of there are a number of factors limiting the performance of Ethiopia's artisanal mining market participation. So the purpose of this study was to determine the extent of market participation of artisanal gold miners in the Kumuruk District, Northwest Ethiopia. The respondents were chosen using a two stage sampling procedure in order to accomplish this. The initial phase involves the deliberate selection of Seven Assosa District gives rise to Kumuruk District. Five kebeles were chosen at random from the sixteen kebeles in the second stage. From the provided sampling frame, 200 respondents were chosen using a systematic random sampling technique. Tools used to analyze the data included Stata14 version and SPSS version 21 statistical software. The results of descriptive statics show that gold producers and brokers were found to be important gold market mediators at mining gate and that eight market catchments were present in the study area. Additionally, the Heckman two stage econometric estimation procedure was used to identify factors that limit gold market participation decision and gold sale weight of the artisan gold miners’ households in the study area. Informational resources, age, proximity to the market, prior mining experience, years of schooling, and household size all have a favorable and significant impact on gold market involvement. The amount of gold that each responder provided served as the depend ant changeable. Age, years of schooling, ownership of mining equipment, availability of non-mining income, cost of transportation, and informational resources were all significantly and favorably correlated with the amount of gold supplied for sales. This implies that a rise in any of these factors will result in a rise in the amount of gold offered for sale. According to the survey, efforts should be taken to open more places of sale. In order to increase market participation, mining areas should establish a direct market channel with the National Bank of Ethiopia. Additionally, youth participation in mining operations should be encouraged in order to minimize transportation expenses. Encourage the government to set up a revolving and collateral fund, and encourage microfinance institutions to open branches close to artisanal miners.

Published in American Journal of Environmental and Resource Economics (Volume 9, Issue 1)
DOI 10.11648/j.ajere.20240901.12
Page(s) 7-19
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Artisanal Gold Miners, Commercialization, Mark Participation, Quantity Supply, Binary Probit Model

References
[1] Balint, P. K (2003); Land, Labour and Rural Poverty; Essays in Developing Economics, Delhi; Oxford University Press.
[2] Central Statistical Authority, 2007. The 2007 Population and Housing Census of Ethiopia: Statistical Report for Benshangul Gumz Region, Addis Ababa, Ethiopia.
[3] Determinants Influencing Marketing Margin of Artisanal and Small-Scale Gold Miners: A Case Of West Guji Zone Angasu Areri Elema Department Of Marketing Management Cbe, November, 2022 Bule Hora University Ethiopia, Horn Of Africa.
[4] Formalizing and Enhancing Performance of Artisanal and Small-Scale Gold Mining in Ethiopia” For The Ministry Of Mines Of Fdre July, 2022 Addis Ababa.
[5] Heckman, J. J. 1979. Sample selection bias as a specification error. Econometrica. Journal of the econometric society: 153-161.
[6] Holloway. G Barrett C. B and Etuis; (2005); Bayesian estimation of the Double Hurdle model in the presence of fixed cost, Journal of International Trade and development. Vol 1(1) 17-28. India Pvt. Ltd, New Delhi. Pp. 5-12.
[7] Int. J. Mining and Mineral Engineering, Vol. 9, No. 4, 2018 Mining sector challenges in developing countries, Tigray, Ethiopia and inspirational success stories from Australia.
[8] Killick, T. A Reaction Too Far: Economic Theory and the Role of the State in Developing countries. London: overseas Development Institute, 1989. Pp. 77.
[9] Kurmuk District Office of Agriculture, (2019). Annual Report. Benishangul Gumuz, Ethiopia.
[10] Maddala, G. S. Limited-Dependent and Qualitative Variables in Econometrics. Cambridge: Cambridge University Press, 1983, pp 257-291.
[11] Ministry of Mines and Energy, Jun, 2007. Final report on Energy Access Project (mineral component), Artisanal mining sector study (Wardell Armstrong, engineering & environmental solution) and current Status of mining sector on mining regulation. Addis Ababa, Ethiopia.
[12] Energy Access Project (mineral component), Artisanal mining sector study (Wardell Armstrong, engineering & environmental solution) and current Status of mining sector on mining regulation. Addis Ababa, Ethiopia.
[13] Randela R, Alemu Z. G and Groenewald J. A (2008); Factors Enhancing market participation by small scale farmers. SAMS, Jun, 2014.
[14] Schwartz, F. W., Lee, S., & Darrah, T. H. (2021). A review of the scope of artisanal and small-scale mining worldwide, poverty, and the associated health impacts. GeoHealth, 5, e2020GH000325.
[15] Tesfaye, A. B. 2010. Factors Influencing Marketing Margin of Artisanal Gold Miners of Menge Woreda (Doctoral dissertation, Mekelle University).
[16] Tewldbrhan, Abay. 2011. Artisanal mining and Transaction Coordinating Core Process /ATCCP: (201p.810) Wilson et al, 2015.
[17] Yamane T. (1967). Statistics: An Introductory Analysis, 2nd Edition.
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  • APA Style

    Benti, T. R., Yeneneh, M. F., Aman, H. M., Sale, A., Dawd, S. H. (2024). Determinants of Market Participation of Artisanal Gold Miners: Evidence from Kumuruk District, Northwest Ethiopia. American Journal of Environmental and Resource Economics, 9(1), 7-19. https://doi.org/10.11648/j.ajere.20240901.12

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    ACS Style

    Benti, T. R.; Yeneneh, M. F.; Aman, H. M.; Sale, A.; Dawd, S. H. Determinants of Market Participation of Artisanal Gold Miners: Evidence from Kumuruk District, Northwest Ethiopia. Am. J. Environ. Resour. Econ. 2024, 9(1), 7-19. doi: 10.11648/j.ajere.20240901.12

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    AMA Style

    Benti TR, Yeneneh MF, Aman HM, Sale A, Dawd SH. Determinants of Market Participation of Artisanal Gold Miners: Evidence from Kumuruk District, Northwest Ethiopia. Am J Environ Resour Econ. 2024;9(1):7-19. doi: 10.11648/j.ajere.20240901.12

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  • @article{10.11648/j.ajere.20240901.12,
      author = {Teha Romanu Benti and Mihret Fentahun Yeneneh and Hassen Muhammad Aman and Abdurazak Sale and Sadik Hisa Dawd},
      title = {Determinants of Market Participation of Artisanal Gold Miners: Evidence from Kumuruk District, Northwest Ethiopia
    },
      journal = {American Journal of Environmental and Resource Economics},
      volume = {9},
      number = {1},
      pages = {7-19},
      doi = {10.11648/j.ajere.20240901.12},
      url = {https://doi.org/10.11648/j.ajere.20240901.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajere.20240901.12},
      abstract = {In Ethiopia as well as most other regions of the world, the artisanal mining industry was mostly ignored, because of there are a number of factors limiting the performance of Ethiopia's artisanal mining market participation. So the purpose of this study was to determine the extent of market participation of artisanal gold miners in the Kumuruk District, Northwest Ethiopia. The respondents were chosen using a two stage sampling procedure in order to accomplish this. The initial phase involves the deliberate selection of Seven Assosa District gives rise to Kumuruk District. Five kebeles were chosen at random from the sixteen kebeles in the second stage. From the provided sampling frame, 200 respondents were chosen using a systematic random sampling technique. Tools used to analyze the data included Stata14 version and SPSS version 21 statistical software. The results of descriptive statics show that gold producers and brokers were found to be important gold market mediators at mining gate and that eight market catchments were present in the study area. Additionally, the Heckman two stage econometric estimation procedure was used to identify factors that limit gold market participation decision and gold sale weight of the artisan gold miners’ households in the study area. Informational resources, age, proximity to the market, prior mining experience, years of schooling, and household size all have a favorable and significant impact on gold market involvement. The amount of gold that each responder provided served as the depend ant changeable. Age, years of schooling, ownership of mining equipment, availability of non-mining income, cost of transportation, and informational resources were all significantly and favorably correlated with the amount of gold supplied for sales. This implies that a rise in any of these factors will result in a rise in the amount of gold offered for sale. According to the survey, efforts should be taken to open more places of sale. In order to increase market participation, mining areas should establish a direct market channel with the National Bank of Ethiopia. Additionally, youth participation in mining operations should be encouraged in order to minimize transportation expenses. Encourage the government to set up a revolving and collateral fund, and encourage microfinance institutions to open branches close to artisanal miners.
    },
     year = {2024}
    }
    

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  • TY  - JOUR
    T1  - Determinants of Market Participation of Artisanal Gold Miners: Evidence from Kumuruk District, Northwest Ethiopia
    
    AU  - Teha Romanu Benti
    AU  - Mihret Fentahun Yeneneh
    AU  - Hassen Muhammad Aman
    AU  - Abdurazak Sale
    AU  - Sadik Hisa Dawd
    Y1  - 2024/04/28
    PY  - 2024
    N1  - https://doi.org/10.11648/j.ajere.20240901.12
    DO  - 10.11648/j.ajere.20240901.12
    T2  - American Journal of Environmental and Resource Economics
    JF  - American Journal of Environmental and Resource Economics
    JO  - American Journal of Environmental and Resource Economics
    SP  - 7
    EP  - 19
    PB  - Science Publishing Group
    SN  - 2578-787X
    UR  - https://doi.org/10.11648/j.ajere.20240901.12
    AB  - In Ethiopia as well as most other regions of the world, the artisanal mining industry was mostly ignored, because of there are a number of factors limiting the performance of Ethiopia's artisanal mining market participation. So the purpose of this study was to determine the extent of market participation of artisanal gold miners in the Kumuruk District, Northwest Ethiopia. The respondents were chosen using a two stage sampling procedure in order to accomplish this. The initial phase involves the deliberate selection of Seven Assosa District gives rise to Kumuruk District. Five kebeles were chosen at random from the sixteen kebeles in the second stage. From the provided sampling frame, 200 respondents were chosen using a systematic random sampling technique. Tools used to analyze the data included Stata14 version and SPSS version 21 statistical software. The results of descriptive statics show that gold producers and brokers were found to be important gold market mediators at mining gate and that eight market catchments were present in the study area. Additionally, the Heckman two stage econometric estimation procedure was used to identify factors that limit gold market participation decision and gold sale weight of the artisan gold miners’ households in the study area. Informational resources, age, proximity to the market, prior mining experience, years of schooling, and household size all have a favorable and significant impact on gold market involvement. The amount of gold that each responder provided served as the depend ant changeable. Age, years of schooling, ownership of mining equipment, availability of non-mining income, cost of transportation, and informational resources were all significantly and favorably correlated with the amount of gold supplied for sales. This implies that a rise in any of these factors will result in a rise in the amount of gold offered for sale. According to the survey, efforts should be taken to open more places of sale. In order to increase market participation, mining areas should establish a direct market channel with the National Bank of Ethiopia. Additionally, youth participation in mining operations should be encouraged in order to minimize transportation expenses. Encourage the government to set up a revolving and collateral fund, and encourage microfinance institutions to open branches close to artisanal miners.
    
    VL  - 9
    IS  - 1
    ER  - 

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Author Information
  • Natural Resource Economics and Management, Assosa Agricultural Technical and Vocational Education Training College, Assosa, Ethiopia

  • Land Administration, Assosa Agricultural Technical and Vocational Education Training College, Assosa, Ethiopia

  • Natural Resource Management, Assosa Agricultural Technical and Vocational Education Training College, Assosa, Ethiopia

  • Natural Resource Economics and Policy, Assosa Soil Laboratory, Assosa, Ethiopia

  • Natural Resource Management, Assosa Agricultural Technical and Vocational Education Training College, Assosa, Ethiopia

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