Monday, May 25, 2015

Coltan Mining in the Democratic Republic of Congo • Karen Hayes & Richard Burge

Coltan Mining in the Democratic Republic of Congo • Karen Hayes & Richard Burge

“Let us choose to unite the power of markets with the authority of universal ideals. Let us choose to reconcile the creative forces of private entrepreneurship with the needs of the disadvantaged and the requirements of future generations.”
By: Kofi Annan, Secretary-General of the United Nations
The Global Compact, Corporate Leadership in the World Economy

“Because the economic dimensions of civil war have been largely neglected, both governments and theinternational community have missed substantial opportunities for promoting peace”.
By: Paul Collier, former Director, Development Research Group World Bank
Economic Causes of Civil Conflict and their Implications for Policy

“Making the riches of the DRC work for its people and not against them is a vital factor in achieving sustainable peace and development in the Great Lakes region, and a question that the All Party Parliamentary Group has been concerned with for some time. I am therefore delighted to offer my support to this original and important contribution to the debate.”
By: Oona King MP, Chair of the UK All Party Parliamentary Group on
The Great Lakes and Genocide Prevention.

Executive Summary

Tantalum is a rare, valuable, metallic element that is twice as dense as steel and highly resistant to heat and corrosion. It can store and release an electrical charge, a property that has made it a vital material for capacitors in miniaturized and portable electronic equipment including mobile phones. Other applications include surgical equipment, turbine blades for jet engines and lining chemical reactors.

It is mined in several countries with Australia responsible for over 60% of world production. All of the production of the largest mines is sold, in advance, on fixed price contracts to key tantalum processors. There is no central market for tantalum and, with the exception of the major mine-processor contracts, prices are determined by dealers on an individual transaction basis.

In 2000, increased demand for new electronic products caused a tantalum supply shortfall, precipitating a rush of panic buying and a massive price increase. In the Democratic Republic of Congo (DRC) this became a Klondike-style rush into the World Heritage Site National Parks where ‘coltan’, a tantalum-bearing gravel ore, can be easily
surface-mined with shovels and sieves.The mines are in rebel-held areas of the war-torn, impoverished DRC where warring factions are responsible for humanitarian atrocities and neighbouring countries have been accused of human rights abuses on an unprecidented scale as a cover for systematic exploitation of minerals. The mining camps had a massive impact on local wildlife through commercial hunting for food, including the wholesale killing of endangered species such as Grauer’s gorilla, which now faces extinction.

An Expert Panel of the United Nations Security Council has published four reports since 2001 on the illegal exploitation of natural resources in the DRC.

The third report, in October 2002, clearly states that the private sector must accept some responsibility for contributing to this resource-based conflict through the purchase of illegally mined material – the spoils of war. The panel has continued with its investigations, and submitted a further report in the autumn of 2003.

Following significant media coverage, public concern focused on the highest profile consumers of tantalum and, as a result, the mobile telecommunications industry became the centre of attention. The panic-buying boom was followed by a tantalum market slump in 2001. The plummeting prices were not, as widely reported, due to international pressure to boycott Congolese coltan nor to the development of alternatives to tantalum, but rather due to companies working off their expensive inventories – they simply didn’t need to buy it. Despite significant planned expansion of Australian mining capacity, demand for tantalum is likely to continue to grow at a steady rate that may again outstrip supply. Hence, sources such as the DRC will remain strategically important. Most importantly, while there has been a short-term slump in the price of coltan from the DRC, coltan remains a key resource in the eastern part of the country where conflict has continued between different warring factions. The impact on human populations, and the environment, is devastating.

Two options are considered:
(1)  banning the trade in coltan from the DRC, or (2) regulating coltan mining and export. Companies can boycott Central African tantalum, which is the easiest and safest option, particularly in terms of public relations.There is no need to purchase Congolese coltan at present due to large inventories still being used up after the panic-buying phase. Due to smuggling and the nature of the world market, however, it is almost impossible to guarantee that shipments of ore purchased on the ‘spot’ market are free of this ‘conflict coltan’. Denials and best intentions may be difficult to substantiate and sanctions may adversely affect this poverty stricken region, which is so desperately in need of investment.

Tantalum-using industries should consider supporting the second option: regulation. A regulated, Congolese, coltan industry would be beneficial for the orderly development of the tantalum market. Tantalum-using industries could encourage tantalum processors to establish a long-term, transparently negotiated business deal with a Congolese coltan collective, which would pay a fair autumn of 2003market price for an ethically sourced product. This option could contribute significantly to the peace process in the region, as business intervention may be a viable route to stability in a conflict that is predicated on economics.

This option is far more complex, not least as it raises significant questions about the acceptability and risk of doing business in a war zone. Paradoxically, however, this route could demonstrate greater corporate environmental and social responsibility.

The steps involved in pursuing the concept of regulation of the coltan industry are detailed in this report. It would generate maximum value through collective action, discussed with and approved by international bodies. Implementation would require a commitment to purchase an ethical product (at market price, not at a premium) and the underwriting of development and conservation projects.


1. All tantalum-using industries should recognize that there is undoubtedly a direct relationship between the illegal exploitation of coltan and the conflict in the DRC.
2.Tantalum-using companies, individually or collectively, should determine the level of response to the coltan mining issue that is most appropriate and feasible. The key factors
influencing this decision should be:
2a. All user industries bear some responsibility, albeit distant, for the situation.

2b. The issue will recur as Congolese coltan will continue to be traded.

2c. Denials of any purchase are, for the majority, impossible to substantiate.

2d. The UN is seeking routes to resolution and will be responsive to input.

2e. The potential balance between risk, resources and rewards.

3. Rather than being a threat, the coltan crisis can be seen as an opportunity to engage with a complex issue using an innovative approach, which will be an exemplary demonstration of collective corporate social responsibility.  Tantalum-using industries can employ their:

3a. Influence: along the supply chain to either conform to a ban or support an exploration of the potential of a regulated coltan mining industry.

3b. Peer pressure.

3c. Political support.

3d. Finances: to support community and conservation projects as part of a greater scheme of investment for stability and development.

4. The most critical issue, now, is timing. Though it was impossible to initiate activities beyond dialogue under previous political conditions, support for the Congolese reconstruction process under the Government of National Unity is now timely and urgent.

To this end we propose that:
4a. An appropriate international organization supporting a partnership approach to corporate social responsibility (CSR), eg the UN Global Compact, should circulate this report widely to tantalum-using industries and other relevant institutions, and hold a meeting to gain wider support for the initiative.

4b. A t this meeting a multi-stakeholder group should be formed to advance the initiative.

4c. This group should comprise the Government of the DRC, civil society and on- governmental organization (NGO) representatives, the private sector, and international agencies, including the World Bank Mining Unit and the Country Director for the DRC.

4d. The group should correspond directly with the UN Security Council, the UN development Programme and the UN Panel of Experts to propose the initiative as a component of DRC reconstruction planning.

4e. The group should also correspond directly with government trade and development departments to advise them of the initiative.


In spring 2001, the electronics and mobile telecommunications industries were suddenly
approached by journalists asking what they intended to do about the fact that their products were fuelling a bloody war and destroying endangered wildlife in the DRC. Industry representatives found themselves “scrambling to limit the potential public relations fallout from an issue that they say totally blindsided them” (Silva, 2001).

Since 2001, a series of UN Security Council reports has clearly stated that the private sector has played a vital role in the continuation of the war in the DRC. Congolese and international NGOs were pressing for an acceptable response, and headlines like ‘Gorillas
being killed to make your 3G phones’ we resplashed across the newspapers and the  nternet (3G, 2001).

The mining and extraction of ‘coltan’ (a tantalum-bearing ore) in the DRC is at the heart of the debate.  While coltan no longer makes such prominent headlines, it remains a key issue for the people and environment of the DRC and the Great Lakes region.

The purpose of this report is to provide an accurate analysis of the real story behind the headlines, to trace its development and key events of the last two years, and to present a range of recommendations as to how relevant industries could choose to respond to the situation.

The report starts with a description of the mineral in question, tantalum, and an analysis of the market conditions that caused its price to escalate wildly in 2000. Whilst the historical situation is described as background, the emphasis of the report is on the current and predicted market for tantalum.

The second section provides a brief on the politics, economy and society of the DRC with particular reference to the key investigative reports that have been published in 2000-2003. Against this socio-political backdrop, the impact of mining coltan is described with regard to the role it has played in the humanitarian and environmental disaster occurring
in eastern DRC. The equitable management of natural resources, including coltan, is fundamental to the peace process.

Despite the publicity and the informed reports from the UN, NGOs and civil society, no effective action has been taken by the private sector.  The international private sector could choose to ignore the situation on the grounds that it is too far away and too complicated. There are, however, alternative options. Firstly, companies can endeavor to clean up their supply chain by boycotting Congolese coltan. Secondly, the private sector can support the creation of a regulated coltan mining industry as a catalyst for economic development and political stability.

Within this latter scenario, the position of tantalum-using industries and their potential impact is considered.  A framework of options for different levels of engagement is presented along with actionable recommendations. This is a real-time case study of corporate social responsibility on the front line.

Continue reading: 
  1. Coltan Mining in the Democratic Republic of Congo...
    Coltan Mining in the Democratic Republic of Congo: How tantalum-using industries can commit to the reconstruction of the DRC Karen Hayes & Richard Burge

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