From Mine to Mobile Phone: The Conflict Minerals Supply Chain

 

Enough experts lead you down the path of the 3Ts—tin, tantalum, tungsten—and gold from the mines of Eastern Congo all the way to your cell phone.

STEP 2: TRADING HOUSES

Looking the Other Way

Mineral trading house in Bukavu, South Kivu.
Source: Grassroots Reconciliation Group / Sasha Lezhnev

Minerals dealer: “Look, this cassiterite [tin ore] is from one mine, and this on the right is from another mine.”
Government inspector: “Yes, and this one is from Shabunda, in the area where the FDLR is.”
-Dialogue at a minerals trading house, Bukavu

From the mines, the minerals get transported to trading towns and then on to the two major cities in the region, Bukavu and Goma. For the gold trade, Butembo and Uvira are also key trading hubs.

The 3Ts are brought by individuals—called negociants in French, or buyer-transporters—on their backs, by large trucks, and/or by planes in sacks the size of small garbage bags. The minerals are then sorted by trading houses called “maisons d’achat,” or trading houses, which process the minerals. The majority of these traders are paid in advance by the exporters to whom they sell the minerals (see Step 3).
 
Gold is much more valuable by weight compared with the 3Ts. Illustratively, the going price of processed tin is just under $7 per pound, whereas gold is currently valued at more than $15,000 per pound. So while the 3Ts are hauled around in heavy sacks, gold can easily be concealed in a backpack or pocket. As a result, it is very easy to smuggle gold.
 
For more detailed information on the trade of conflict gold in Congo, read Appendix A: Congo's Gold Trade.
 
In the case of the 3Ts, because they trade in much larger volumes and have to be transported out of Congo by trucks or planes, the 3Ts are harder to conceal, making them potentially easier to register, document, and regulate. But on the whole, the majority of the transporters and trading houses currently operate in violation of Congo’s mining laws without proper licenses and registration. Part of the problem is that the government charges $500 for licenses, which the association of traders told us was a prohibitively high price to pay. We were informed that only one in ten transporters in Bukavu were officially registered with the government, meaning that 90 percent operate illegally. However, people who know the business, such as government inspectors, told us that such dealerships and transporters are widely known: there are approximately 100 trading houses each in Bukavu and Goma.
 

A minerals dealer compares tin ore from a rebel-held mine and a government-controlled mine.  Source: Grassroots Reconciliation Group / Sasha Lezhnev

Contrary to what some companies allege, we found that it is fairly straightforward to tell from where the minerals originate, as both dealers at the buying houses and government mining inspectors demonstrated to us. Each sack of minerals had different coloration and texture, depending on which mine it came from.
 
But it is a dangerous business to provide transparency to this trade. One leading merchant told us that he would be killed if he went on camera to talk about how the trade works.
 
Armed groups control much of the transport from the mine to the buying house. They either take a large percentage of the profit from transporters—up to $40 per sack—or they transport the minerals themselves. According to our estimates, the armed groups generated approximately $75 million from mineral transport last year, out of the total of $180 million earned by armed groups from the mineral trade.