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

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.