Congo Tin Sales Tumble 90 Percent as Companies Avoid ‘Conflict Minerals’
Sales of tin ore from Democratic Republic of Congo’s North Kivu province fell more than 90 percent in April as companies avoided trade in so-called “conflict minerals,” a provincial mining official said.
Mineral producers stopped buying from the eastern region in anticipation of new U.S. rules aiming to prevent armed groups from profiting from the sale of tin ore, tungsten, gold, and coltan, the head of North Kivu’s Mines Division, Emmanuel Ndimubanzi, said.
The government is hastening plans to validate mines in the region that are free of armed groups and child labor in order to adhere to the proposed regulations, Ndimubanzi said on May 20 by phone from Goma, the provincial capital. “We need to validate the mines so the minerals can be accepted,” he said.
The rules will require U.S. companies to disclose whether certain minerals used in their products could have supported conflict in Congo, according to a draft copy on the Securities and Exchange Commission’s website. The Organization for Economic Cooperation and Development, two electronics-industry trade groups and the United Nations have also developed their own guidelines with Congolese and regional mining officials to help regulate the trade.
Congo is the largest supplier of tin ore in Africa, and the fifth largest in the world. Eastern Congo, which has endured more than 15 years of conflict, also has large deposits of gold and coltan, a mineral used in electronics.
On May 21, Mines Minister Martin Kabwelulu said Malaysia Smelting Corp., the world’s third-biggest producer of tin and largest buyer of Congolese tin ore, would contribute $10 million to a tagging program managed by tin-industry group ITRI Ltd. to help legitimize the tin ore and coltan trade. MSC will likely enter into a joint venture with the country to mine tin ore in the east as part of the deal, Kabwelulu said.
The Penang, Malaysia-based company announced April 1 it would stop buying ore from Central Africa that was not properly tagged and traced.
“The hope is that companies will be able to trade in Congo as long as they do their due diligence instead of just pulling out,” Gregory Mthembu-Salter, author of the UN’s due-diligence guidelines, said by phone from Kinshasa, the capital. “For the moment, companies appear to have decided it’s easier not to buy from Congo than risk damaging their reputations.”
Congo’s army is removing its soldiers from mines in the east, including Bisie, Congo’s largest tin ore mine, to allow trade to resume, army spokesman Lt. Colonel Sylvain Ekenge said May 20.
Last November, the UN published a report saying almost all of eastern Congo’s most productive mines were under army or rebel control.
“Soldiers cannot be in mines and cannot exploit minerals and they can only enter mines to combat threats to security,” Ekenge said by phone from Kinshasa. “Once they’ve put down the threat they must return to their positions.”
Ndimubanzi confirmed that Bisie and the Omate gold mine were free of Congolese soldiers and that Congolese mining police would soon secure them.
To contact the reporter on this story: Michael J. Kavanagh in Kinshasa on Mkavanagh9@bloomberg.net.
To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at firstname.lastname@example.org.
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.