Why Many Local Miners Are Undervalued in Global Gold Markets

Across many gold-producing regions, local miners operate at the very beginning of the value chain but capture only a small share of the final value of the gold they produce. This imbalance is not driven by productivity or effort, but by structural gaps between informal mining activity and global gold markets.

At the local level, artisanal miners typically sell gold immediately after production to nearby dealers or intermediaries. These transactions take place close to mining sites, often in cash, and are driven by urgency rather than price optimization. Daily gold sales are commonly priced in the range of USD 55–65 per gram, depending on purity, location, and bargaining power.

By contrast, global gold prices currently imply a value of approximately USD 120 per gram. The difference between local sale prices and international market prices represents a significant value gap—one that is consistently absorbed by intermediaries, traders, and downstream processors rather than the miners themselves.

Several factors contribute to this undervaluation. First, most local miners lack direct access to international markets or formal buyers. Without certified assays, standardized purity verification, or legal export channels, miners are forced to sell into informal networks that discount heavily for perceived risk. Second, immediate cash needs often outweigh price considerations, leaving miners with little leverage in negotiations. Third, information asymmetry plays a major role—many miners simply do not have real-time visibility into global gold prices or how their gold is valued downstream.

The absence of local processing infrastructure further reinforces this imbalance. Without access to controlled processing facilities, miners sell semi-refined or raw gold, which attracts additional discounts. Each step away from the mine adds value, but that value is rarely captured at the source.

From an economic perspective, this system is inefficient. It suppresses local incomes, encourages informal trade, and limits transparency across the gold supply chain. It also perpetuates dependence on middlemen rather than building local capacity.

Closing this value gap does not require eliminating artisanal mining. Instead, it requires formal channels that connect local production to transparent pricing mechanisms. Access to certified processing, legal offtake arrangements, and market-linked pricing can significantly improve returns for miners while strengthening accountability and traceability.

As global demand for responsibly sourced gold continues to grow, aligning local production with international standards is no longer optional—it is an economic necessity. Capturing value closer to the source benefits miners, communities, and the broader mining ecosystem alike.