DAVID CHRISTIANSON: Conflict minerals are an intractable problem

It is no doubt an oversimplification to suggest that the conflict and violence that has flared up again in the eastern Democratic Republic of Congo (DRC) is only about control over mineral resources. But no matter what strategic imperatives the various players in the region may have, conflict minerals clearly motivate, sustain and worsen the conflict. 

The problem for the outside world is that initiatives to deal with the problem have proven ineffective. The standard mechanism is to certify the minerals used throughout the international supply chain, from pit to refinery and beyond to the manufactured goods market as “conflict free”. Smelters are a particularly intensive focus of this scrutiny. From this purely regulatory perspective the problem with informal, guerrilla and militia control is that the integrity of global supply chains is compromised, especially in electronics and low carbon technologies.   

Supply chain certification was the mechanism implemented in terms of Section 1502 of the US Congress’ Dodd-Frank Act (2010), the Organisation for Economic Co-operation & Development (OECD) Due Diligence Guidelines for Responsible Supply Chains of Minerals (2011) and the EU’s Conflict Minerals Regulation (2017). There have been other initiatives too, including the Regional Certification Mechanism of the International Conference on the Great Lakes Region and the International Tin Supply Chain Initiative (iTSCI), based initially in the DRC but now located in London. 

The minerals that are the focus of all of these initiatives are tin, tantalum and tungsten (known as the three Ts) as well as gold (which gives the acronym T3G). This issue is of course related to other conflict mineral problems on the continent — notably “blood” diamonds — but is now a geographically distinct matter. The T3G issue is related to resources extracted by informal artisanal miners in the eastern DRC, usually under the “protection” of armed groups.  

The area is now largely under the control of the M23 rebel organisation, one of more than 100 armed groups in the region along with peacekeeping troops from the UN and the Southern African Development Community (Sadc). M23 is reportedly backed and possibly supported in the field by the government of Rwanda. Tensions are high, with public spats between Rwandan and SA representatives, fatalities among civilians and peacekeepers and reportedly 700,000 newly displaced civilians who have fled the fighting.

This is a replay of the events of 2012 when M23 rebels occupied Goma, the capital of the DRC province of North Kivu. It is precisely the situation the supply chain certification initiatives were intended to avoid. Questions about the effectiveness of Dodd-Frank and the EU regulations are, therefore, inevitable.

Supply chain certification is an expensive and resource-intensive activity. The US Securities Exchange Commission (SEC) estimated in 2012 that the initial compliance cost (setting up systems) would be $3bn-$4bn, with an ongoing annual cost thereafter of $207m-$609m. But there has to be a suspicion that for these major international companies compliance has become something of a tick-box exercise.  

The Dodd-Frank process is managed by the SEC. While the commission has real powers over listed companies in the US (to fine or suspend), all that is required under Dodd-Frank is that they report on conflict minerals. All the big, listed US tech companies — Apple, Alphabet (Google), Amazon, Microsoft and Meta (Facebook) — submit annual conflict minerals reports.  

In their most recent (2023) reports, all of these companies other than Alphabet admitted to the possibility that their supply chains may be contaminated by conflict minerals. An analysis of Amazon’s 2023 conflict minerals report argues that the company “could not rule out having sourced minerals from nine of 10 African countries where human right violating militias finance themselves through mining”.  

Amazon insists it is “committed to avoiding the use of minerals that have fuelled conflict and we expect our suppliers to support our efforts to identify the origin of gold, tin, tungsten and tantalum used in products that we manufacture or contract to manufacture”. 

The problem with regulatory solutions to real-world problems is that regulations may be outdated the moment they are enacted. Not only are they incentives to less-than-scrupulous operators to spare themselves compliance costs by evading them, but they also tend to be slow to respond to changes in the real economy. 

A number of developments have affected matters since the conflict minerals supply chain regulation was initiated a decade-and-a-half ago. Perhaps the most significant has been the large increase in demand, especially for tantalum, which is used to make capacitors in electronic devices, including mobile phones and personal computers. In 2010, when the documentary Blood in the Mobile alerted a global audience to the problem of conflict minerals, 296-million cellular telephones were sold worldwide. In 2023 the figure was 1.339-billion, more than four times as many.

It is difficult to get a handle on coltan use worldwide as the mineral (which is refined to yield tantalum as well as niobium and vanadium) is not centrally traded like most commodities. The biggest exporter of ores and concentrates in 2022 was Rwanda, which earned $63.7bn from the trade. By contrast, the DRC earned a mere $5bn in the same year. Observers, including the UN panel of experts, agree that this figure is hugely in excess of Rwanda’s resource endowment and must include conflict coltan from the DRC. 

Other important changes are related to international geopolitical competition for strategic minerals. Critical minerals lists have been developed by the world’s major economies, starting with the EU in 2011. The EU and US have expressed concern about Chinese domination of strategic minerals, especially those mined in Africa, in the context of the global transition to low carbon technologies.  

The original EU list of 14 minerals had grown to 34 by its fifth iteration in 2023. The US started slowly with the first list (or 17 minerals) produced by a congressional subcommittee in 2016. The task of maintaining the US list was passed to the US Geological Survey in 2020 and now comprises 50 minerals. Both the EU and US critical minerals lists include tantalum, tin, tungsten and vanadium. There is thus tension between the strategic needs of the most developed economies and their commitments to combating conflict minerals. 

The problem of conflict minerals in central Africa has turned out to be thoroughly intractable. Regulating the supply chains of conflict minerals is a weak tool in the face of ruthless interests on the ground. There is an immediate need for humanitarian assistance in the region.

Beyond that, the underlying problem is going to be difficult to address and there have to be doubts about how much attention it is likely receive from a fragmented global community.  

• Christianson is an associate of the Trade Law Centre.