Fight against “conflict minerals” is improving in DRC

In Le Monde, le 8 mai 2019

Contrary to popular belief, new truths are emerging in eastern DRC because the International Conference of the Great Lakes Region (ICGLR) helped a lot to improve safety and traceability of conflict minerals. While these efforts are costly for artisanal miners, they have almost eradicated trafficking in tungsten, tin and tantalum. The futur Bisié tin industrial mine, managed by Alphamin, will start production at the end of 2019 and is witness of a new level of safety. Finally, “green” industrial gold mines trace the yellow metal, and have fewer safety problems.

But safety and traceability have not yet stabilized for artisanal gold mines. This is due to cross-border trafficking between the production sites in eastern DRC and gold trading centers behind the borders of the three neighboring countries: Uganda, Burundi and Rwanda. This gold smuggling is documented because the latter three countries have few mines and yet they export significant quantities of gold to Dubai: every year about 20 tons of Congolese gold are exported from Uganda and Rwanda to the United Arab Emirates.

While traceability is being monitored with increasing rigour in the DRC, it seems that Uganda, Rwanda and Burundi would not applied these rules with the same firmness. Then, trafficking still transforms artisanal gold into conflict minerals: it feeds remnant armed gangs that exchange it for equipment and weapons; it also requires a part of more than 18,000 UN soldiers on the spot, costing 1.2 billion dollars each year and generating various forms of trafficking.

For Kinshasa, improving the transparency in the region would mean moving from rhetoric to reforms, that an effective traceability of artisanal gold would be applied with the same rigour in all the countries of the Great Lakes region.

Another radical solution improving taxation, breaking smuggling, arms trafficking and partly reducing the UN presence would be to set up a gold smelter in central eastern DRC, in Goma, Bukavu or Butembo. Perhaps history is going into that direction. Currently an Ugandan refinery near Entebbe airport, absorbs some illegal gold from the sub-region. It was recently sanctioned by the Dubai authorities, and the Belgian government is monitoring its activities. If it were confirmed that it would have imported between four and eight tons of gold from Venezuela in March 2019, its sustainability would be threatened by US sanctions.

Another complex issue concerns cobalt mines that are located 1500km in the south of the country, in the provinces of Lualaba and Haut-Katanga. Cobalt is not a question of “conflict minerals”, since there is no smuggling or financing of armed bands, but an economic problem of mining revenues distribution. For decades, this mining area has been largely open by side of the 280km famous National Roads 1 and 39 between Lubumbashi and Kolwezi. This region is equivalent to the huge Bushveld magmatic complex in South Africa for PGMs, and produces three-quarters of the world’s cobalt supply.

Giant industrial mines producing 85 to 90% of this Congolese cobalt. Only the presence of employees is allowed, and women and children are naturally prohibited. These productions are traded on the basis of international prices. They had reached $24,000 per ton by 1 January 2016, speculation multiplied them by four, to $95,000 per ton in 2018, then overproduction divided them by three, to $30,000 per ton in April 2019. In the next years, prices will improve, as will copper prices, but this volatility has weakened the profitability of both industrial and artisanal mines. These latter, from identified concessions, produces the remaining 10-15% of Congolese cobalt; vulnerable women and children are also prohibited.

Beyond that, an entire population survives, in immense poverty, from the product of small illegal mines sometimes located under housing or on the borders of the immense territories of industrial mines. This illegal production is low and yet sufficient to transform the region into a global centre of a geopolitical infox unfavorable to electric car : its slogan “green car, red battery” is opposed to artisanal miners. Another hoax is condemning the link between small-scale miners and Chinese battery manufacturers. However, these misinformations, similar to the one that stigmatized a misanthropic relationship between China and rare earths years ago, did not succeed in destabilizing the region

Further downstream  of artisanal mining, the inequity of the distribution of the mining rent is revealed. Ore is sold on site to illegal buyers, unfortunately weights and grades of cobalt or copper contained are often underestimated. This traded price being imperfect, a provincial decision at the end of 2018 allowed the construction of official trading centers equipped with approved scales to check weights, analytical laboratories to certify content and banks for artisanal miners to build up savings. The first center is under construction in Kolwezi, a second one should be located near the village of Kisanfu. If this industry is not diverted by other interests, these two centers could be the first steps towards a local cobalt exchange.

A gold smelter in Kivu, a cobalt exchange in Lualaba, these are two essential steps for the DRC to regain mining sovereignty, and herald a new era summarized by the formula: when the African consumer wakes up, China will tremble.