As part of its commitment to eradicating child labor and fostering sustainable practices within global mica value chains, the Responsible Mica Initiative (RMI) has released a comprehensive study by BASIC on the economic and social impacts of introducing living incomes and wages in Madagascar. This follows a similar innovative initiative undertaken in India, furthering RMI’s holistic approach to addressing systemic challenges in mica-dependent communities.
The Context
Madagascar is one of the largest global exporters of mica, supplying high-quality phlogopite mica primarily used in electric vehicle batteries, thermal insulation, and DIY paints. However, despite this economic significance, mica-dependent communities face deep-rooted poverty, with workers earning as little as 100 MGA/kg (~$0.023/kg). Such conditions perpetuate child labor, as families struggle to survive without the additional income generated by their children.
RMI commissioned BASIC to conduct a detailed analysis of the value chain, modeling the impact of implementing living incomes and wages across different stages, from mica pickers to exporters. The findings provide critical insights into the feasibility and broader implications of transforming the sector.
Key Findings
1. Living Income / Wage Thresholds
- A living income for a typical mica picker family (two adults and three children) in rural Madagascar was estimated at 580,000 MGA/month* (~$143/month), also estimating that one adult worker only contributes to the family’s revenues.
- Achieving this requires increasing the price paid to mica pickers sixfold, from 100 MGA/kg ($0.023/kg) to 580 MGA/kg ($0.13/kg).
- Similarly, the average incomes or wages of sorters in sorting sites, as an example, would need to be increased 2.4-fold, raising the average price of mica to 120,08 MGA per kilogram (~0.0264 USD/kg) from 50 MGA per kilogram (~0.011 USD/kg).
2. Cost Impact on Finished Products
- Despite the substantial increase in mica prices at the mining and sorting sites levels, the impact on the cost of finished goods remains negligible:
- Less than 0.004% increase in electric vehicle battery prices.
- Less than 0.001% increase in the price of electric vehicles.
- A 0.025% increase in DIY anti-corrosion paint costs.
3. Formalization of the Sector
- Formalizing and registering “Mining Groups,” as outlined in Madagascar’s Mining Code, could improve transparency, and help ensuring the targeted fair pricing, and enhance collective bargaining power for mica pickers.
- This formalization would also facilitate better compliance with labor and environmental standards, while reducing informal fees and corruption along the supply chain.
4. Human Rights and Social Impact
- Ensuring payment of living incomes and wages has the potential to eliminate child labor by enabling families to meet basic needs without relying on income from children.
- Improved incomes and wages and formalized practices can also enhance access to education, healthcare, and overall community development.
Implementation Steps
The study outlines several critical steps for achieving living incomes and wages by 2030:
- Strengthening supply chain traceability.
- Expanding workplace standards to include living income or wages provisions for all workers.
- Encouraging the formalization of worker associations and adherence to legal frameworks.
Conclusion
The findings from Madagascar echo those of the previous study conducted in India, underscoring thenegligible cost impact of implementing living incomes and wages in the mica sector without significant economic disruption. By addressing systemic barriers and aligning stakeholders around shared goals, RMI aims to create a fair and responsible mica value chain that uplifts communities and aligns with global sustainability standards.
For further details, please refer to the full study or its executive summary.
* 2022 estimate by the recognized Anker Living Wage and Income Research Institute.
