Humanitarian cobalt 2018

In Les Echos 06 06 2018

After having been central at the OECD in Paris in April, then in May at the KBM conference in Lubumbashi and at the Alternative Indaba in Kolwezi, the question of artisanal cobalt will be at the heart of the answers of the Kolwezi Mining Days in September 2018.

2 years of efforts and consultations will have been necessary to considerably improve the situation in the east of the DRC. The industrialists present at the OECD at the 12th Forum on the Responsible Mineral Supply Chain testified to this. According to them, contrary to popular belief, in Ituri, North Kivu, South Kivu and Maniema provinces the safety of tungsten, tin and tantalum mines has improved considerably. This is also the case for industrial gold mines such as Banro, Kibali Gold and soon Alphamin. It is also possible to identify many artisanal “green” gold mines, i.e. without armed conflict. Of course, not everything is perfect, but progress is there. And the situation will be optimal as soon as gold smuggling to Uganda and Rwanda is dried up, 20 tons of gold are illegally exported from the DRC to these two countries, they fuel all trafficking. However, with a little economic intelligence, a technical solution is within reach through the construction of a national gold foundry in Kivu. The artisanal gold problem will thus become an opportunity; instead of leaving for Dubai, the yellow metal will supply a local jewellery industry that is only waiting to develop.

Faced with this decrease in difficulties in eastern DRC, the OECD was buzzing with conversations about the duty of vigilance around cobalt. Many contradictory elements were exchanged about child labour in artisanal cobalt mines and the urgent need for its traceability. It was necessary to check on the spot.

The DRC has an area equal to 4.25 times that of metropolitan France; the province of Lualaba is 4 times that of Belgium; together, the provinces of Lualaba and Haut-Katanga are more than half of France and more than eight times that of Belgium. The country is home to 60 ethnic groups, 400 dialects, it is the largest French-speaking country in the world and Kinshasa is the largest French-speaking city ahead of Paris.

To immerse yourself in the cobalt of the two provinces of Lualaba and Haut Katanga is to drive on the famous 280 km of the national roads N° 1 and N° 39 linking Lubumbashi to Kolwezi. On either side of the pavement, cobalt has been mined there for decades, with 65 % of world production coming from this region as a copper co-product. The geological challenge is major, the area is the equivalent of the Bushveld magmatic complex in South Africa for PGMs.

Industrial mines produce 80 percent of Congolese cobalt. Only the presence of employees is allowed, that of children is naturally prohibited. But these mining concessions are impressive. TFM’s mine is the equivalent of a square 50 km by 32 km; more than 1600 km² of hills located between 1000 meters and 1400 meters and dotted with villages. Mining safety is on site and the various entrances and exits are controlled. It is difficult to control this huge area and illegal logging if it occurs will be detected quickly. It will be a concern not because of its volumes, which will remain minimal, but because of the traffic it will generate.

Artisanal mines produce 20% of Congolese cobalt and there is a distinction between mining and trading in minerals.

Artisanal mining is neither hidden nor concealed, quite the contrary. Located in plain sight of everyone, it is reserved for approved miners in listed concessions. In these mines, vulnerable children and women are banned, and the administration has always been careful to keep them away from the sites.

However, a problem arises when industrial concessions have been deserted by miners. Some are in the bush or on the outskirts of town. But if the city grows, the mine is in town. In Kolwezi the Gécamines de Kasulo concession has been abandoned. It has become the Kasulo district in the city centre. Houses were built, roads were laid out and since the cobalt outbreak, underground miners had settled there. They dug under gardens, houses and roads. Here again, the children were not supposed to work there, but digging “in the family” was all the easier as you dug under your home…. However, these areas have become a mining hub, the foundations of homes and roads have been weakened, they have collapsed. The basement is a Gruyère cheese, the safety of property and people is facing pervasive problems. That is why the authorities are relocating the inhabitants. The latter have the choice of a new house in the Samukinda district or the payment of an amount equal to 150 % of the value of the old house. Another area, Tsipuki, Gécamines & Ledia concession, will be treated in the same way for the same reasons. Once the move is complete, the province will take back control of the area to ensure transparent mining.

The second aspect of mining craftsmanship is the sale of ore. Regulatory private trading centres built near artisanal mines allow the artisan to sell his production. But it is sometimes the victim of illegal deposits that do not pay the price: the weights of the ore bags as well as the cobalt content are the source of falsifications. It is a mess, and getting it in order requires strong political will.

On 31 May 2018, the new governor of Lualaba province was moving from Kolwezi to a new site for illegal traders near the village of Kisanfu. In the middle of a crowd, he was telling the fraudsters that they had 48 hours to close their business. These punching operations will probably increase in the coming months. Indeed, all these businesses, legal or illegal, will close and be replaced by two huge official industrial trading centres. The first is under construction on the outskirts of the village of Kisanfu and the other will be located in Kolwezi in the Musompo district. Each will be equipped with approved scales to really check the weight (without undervaluation), an analysis laboratory to certify the content of the minerals (without fraud), a one-stop shop in order to know the true identity of the owners of trading companies (without tax fraud), and finally banks so that miners can peacefully build up savings. If no clandestine supply chains interfere with the mechanism, these two trading centres will be the introduction of a future cobalt trade exchange in the country. Like the gold foundry in Kivu, these are essential steps towards metallic and financial sovereignty.

The orderly development of this artisanal cobalt production is positive and already underway. Hopefully nothing will stop him.

And yet there were many “artisanal cobalt” meetings at the OECD in April 2018. Why is this feeling of a sudden rise in the power of international NGOs against these artisanal mines still fresh in our minds? Have humanitarian associations shifted their interest from tungsten and tantalum from Goma to cobalt from Lubumbashi and Kolwezi located 1500km further south? 1500 km is a distance equivalent to moving from Brussels to Valencia in Spain and the climate in Belgium is different from that of the Costa Azahar. In the former Zaire it is a bit the same thing. Unlike the Great Lakes region, in cobalt armed gangs, violence and smuggling have never been part of the landscape and Dostoyevsky has taught us the effect of this type of reform: “This is what it is like to reform on unprepared ground and, moreover, to copy it on the institutions of others, it is pure prejudice. ”   In this case, should we look for the cause of this NGO migration in the price of cobalt?

From $24,000 per tonne on January 1, 2016, it increased to $95,000 per tonne recently. Multiplied by 4, it has placed Lualaba and Haut-Katanga at the centre of the battery market universe. Since silver attracts silver, is it more lucrative to provoke an overbidding  “cobalt artisanal” and then to generalize its duty of diligence rather than continue to audit the one that tungsten, gold or tantalum? Is such an influence-accusation-accusation-remediation-redemption scenario conceivable: condemning the 20% of artisanal cobalt, demanding traceability of 100% of production (artisanal and industrial) and winning the financial manna spent on the duty of diligence?

The whole increased the cost of the artisanal sector, in response to a regional initiative called “don’t touch my cobalt”, which condemns the additional traceability costs imposed on miners. She wondered who would manage the destabilization created when they faced falling cobalt prices. Indeed, after a cycle of new production, substitution and redesign-pricing, will we not move towards this contraction of prices within 12 months?

In conclusion, about 92% of the cobalt consumed worldwide is of industrial origin without children in mines. Only 8 % are of Congolese artisanal origin with the risks and improvements described above. As was the case with the Alternative Indaba in May, there is a growing opposition between artisanal mines and the objectives of international NGOs. On the other hand, local humanitarian workers, far from the “charity business”, without regular financial resources, without structural costs, without headquarters, provide solutions that are visible to all. Progress comes from the little ones and in Lubumbashi look at Bumi or Malaika who take care of the children, in Kolwezi look at AFECA ( which gives women work in local content.

Ultimately, could large NGOs question the cobalt purchased and physically stored by investment funds? Is its origin known, is it “green”, does this speculation meet the duty of diligence?

All these questions will be discussed next September at the Kolwezi Mining Days.