Across Africa, hundreds of thousands of artisanal miners scratch out a living in the shadows of large industrial operations — often working informally on or near company-owned concessions, undercutting profits, fueling pollution, and denying governments tax revenue.
A novel financial instrument now being piloted in Zambia is designed to change that dynamic by making their integration into formal supply chains attractive to investors.
A Canada-based advisory firm, Veridicor, and mid-tier Zambian copper miner Metalex Commodities have announced plans to pilot a so-called “stakeholder prosperity bond” this year — a sustainability-linked instrument that ties investor returns not to raw output, but to measurable social and environmental outcomes for workers, local communities, and host economies.
“Instead of pushing artisanal miners off land, this model professionalises them,” said Rob Karpati, Veridicor’s finance director.
The debut issuance is targeting between $100 million and $200 million in fundraising by year-end. Proceeds would be used to help Metalex bring artisanal and small-scale miners into regulated offtake agreements, while also funding shared infrastructure and equipment investment. Zambia, Africa’s second-largest copper producer, is home to tens of thousands of such miners, including a significant concentration around Metalex’s northwestern permit area.
The structure places an industrial mine at the center of each bond, providing the balance sheet anchor needed to support repayment. Interest rates would then be adjusted based on how well social and environmental performance targets are met. “Large mines tend to be the anchor of these [bonds] because it’s got to go on someone’s balance sheet,” Karpati said. “They end up gaining financially because they get offtake from it, and the artisanal miners gain financially because it’s a fair price, not some predatory intermediate.”
For Metalex, the bond unlocks a scale of integration that the company could not achieve on its own. “We plan to source around 30% of our ore from trained, licensed local miners,” said founder and chief executive Ayo Sopitan. “The bond lets us do that at a much larger scale than our balance sheet alone would allow.”
The firms say potential investors include European sustainability bond funds, impact investors, mining-focused funds, banks, and high-net-worth individuals with an ESG mandate — a broad pool that reflects growing appetite for instruments that can demonstrate both financial returns and verifiable development outcomes.
Artisanal and small-scale mining globally supports the livelihoods of an estimated hundreds of millions of people, yet it remains largely informal and poorly regulated in much of sub-Saharan Africa. Bringing such miners under formal frameworks addresses multiple pressure points at once — reducing illegal encroachment on industrial concessions, improving safety and environmental standards, and expanding the tax base for resource-dependent governments.
If the Zambia pilot proves successful, Veridicor and Metalex plan to roll out similar bonds in the Democratic Republic of Congo and Ghana, two other major African mining jurisdictions where the tension between industrial and artisanal operators is equally acute.
By: Andrews Kwesi Yeboah