Painting by Cheri Samba

Lokuta eyaka na ascenseur, kasi vérité eyei na escalier mpe ekomi. Lies come up in the elevator; the truth takes the stairs but gets here eventually. - Koffi Olomide

Ésthetique eboma vélo. Aesthetics will kill a bicycle. - Felix Wazekwa

Wednesday, January 26, 2011

Who is buying minerals from the Kivus?

Apparently not many people. President Kabila imposed an export ban on minerals from the Kivus in September of last year; since then, it has been difficult for companies to sell even the ore they have stockpiled in Goma, Bukavu and Kigali. As commodity prices soar on the London Metals Exchange, prices of tin in the region have fallen. One mineral exporter I spoke to even said they had dropped to a third of the world price. This goes not only for Goma, but also for Kigali apparently - the rationale is not just Kabila's export ban but reputational problems for companies and banks involved in the trade. We reported here last year that Malaysia Smelting Corporation, which used to be the largest buyer of Congolese tin, was having problems securing credit on international capital markets due to reputational risks.

So the export ban has fueled smuggling of tin, tantalum and other minerals, but apparently much of the ore is just sitting in warehouses in the region, waiting for better days.

The question is then not only when will Kabila open the trade again, but when will steps be taken to ensure that companies can buy ore from the Kivus without incurring reputational damage?

2 comments:

Anonymous said...

Maybe cassiterite and other minerals aren't selling because of the ban (though there are reportedly a lot of mineral-laden trucks crossing into Rwanda from Goma), but gold is still going out (via Bujumbura), from mines controlled by FARDC. A full accounting of the effects of the "conflict minerals" movement needs to be done, on the ground in the production areas.

Jason Stearns said...

Good point, and the trader I was quoting is only one person, so we would have to dig much deeper to find out how much if really being sold and exported.

I would not attribute the export ban entirely to the "conflict minerals" movement - it was a DRC government decree, passed perhaps under pressure from activists and governments, but I know quite a few of these activists who are skeptical and worried about the ban.

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