"Africa is, indeed, coming into fashion." - Horace Walpole (1774)

9.30.2011

Q&A on coltan

One of the most fascinating books I read this year is about one mineral: Coltan. Authored by Congo expert Michael Nest, the book is a comprehensive discussion of an extrodinarily complex issue. Nest does an admirable job of explaining what the commodity is, why it matters, and of dissecting the debates around coltan. The book is a must-read for anyone interested in conflict minerals or advocacy in general as it points to both successes and failures in the DRC-focused movement.

Nest was kind enough to take the time for a Q&A about Coltan:

TiA: What was the most surprising thing you learned in researching Coltan?

Nest
: The enormous gulf in communication and understanding between activists and industry. Industry pays little attention to what activists say and are not very aware of academic debates about natural resources and conflict. Yet activists and these debates have an impact of the legislation and regulations that eventually affect them, such as the ‘conflict minerals’ clause in Washington’s recent Dodd-Frank Wall Street Reform and Consumer Protection Act. Similarly, activists pay little attention to industry and are often dismissive and cynical about industry views. Yet, industry can be an excellent source of data about mining and of analysis of how the global resources sector works. When I was researching the book I felt like I was going back and forth between different worlds. Both sides could learn from listening to the other, and anyone who wants to understand the political economy of the minerals sector needs to read information from these sources.

TiA: In the book, you mention that the oft-repeated statistic about 80% of the world’s coltan supply being in Congo is incorrect. Can you give a brief summary as to why and how that incorrect statistic became so well-known?

Nest: That is a good question! I still scratch my head about how this figure, which I am positive is incorrect, has been so widely propagated. I think activists and others interested in the link between coltan and conflict do themselves a great disservice by repeating such statistics without questioning them or researching them. Inaccurate statistics can undermine an argument, even if it is motivated by a moral imperative. People in industry and government who might initially listen to what activists or journalists say often switch off when they hear statistics that are not supported by evidence.

As to how the statistic came about…I really do not know the origin of the figure, other than it was probably first produced in either a BBC or Agence France Presse news report from the late 1990s/early 2000s. Possibly the 80% refers to the amount of coltan on the spot market (ie, open market and not tied up in long-term contracts) coming from the DRC. This figure may have then been misinterpreted by others to refer to world reserves or world production. However, most writers about coltan appear unaware of the role of the spot market in the coltan trade, which makes me wonder whether this really was the origin of the figure. I’m guessing that the figure of 80% fitted in with journalists’ desire to dramatise what at first glance appears to be another story of Africans as victims: having a precious resource sought after by rich countries that will do anything to obtain it. The truth is more complicated and nuanced than this.

The DRC’s share of global tantalite production remains unclear. However, the figure is likely to be between 20-30% at the current time. Historically it is more likely to have been around 15-20%. In regards to reserves, there has been no comprehensive geological survey work in the DRC since the early 1990s as a result of war and instability. However, there is certainly no evidence that the DRC has 80% of the world’s reserves.

TiA: What led you to write a book about one specific mineral?

Nest: I was asked to write this book by Polity Press, which is bringing out a series of the geopolitics of six natural resources: oil, food, fish, water, timber and coltan. My previous book focused on the economic dimensions of the Congo War (1998-2003) and this is one reason they asked me to write about coltan.

Writing a book about a specific mineral, especially one linked to conflict and violence like coltan, is a challenge. Solutions to conflict and violence in the DR Congo and other countries where armed groups profit from natural resources, require integrated approaches that take into account all resource exploitation and all minerals. Isolating a commodity and analysing it out of its sectoral context can result in one losing track of its importance and significance relative to other commodities.

However, in order to develop both theories of natural resources and conflict and policy responses to such conflicts, it is analytically important to understand and be able to distinguish the political economy of individual commodities. Because there has been so little good analysis, yet so much debate, on the tantalite global supply chain, I thought it was important to lay out the facts for this particular mineral and not simply lump it together in an analysis of other ‘conflict minerals’. The editors at Polity Press were aware there was a market for such a book that focused on one specific mineral.

TiA: What’s your take on the advocacy efforts surrounding Congolese minerals, including the proposed SEC and OECD regulations? What have advocates, legislators, and regulators gotten right and what have they gotten wrong?

Nest: I think these efforts are well-intentioned, but not especially well-thought out. This means they may not achieve their desired goal of bringing peace to the DRC.

Gotten right:
  • Relentless activism by the Enough Project, Global Witness and others have raised the profile of the Congo War and increased governments’ and the public’s willingness to focus on it – a good thing.
  • The push by the SEC and OECD to increase transparency in the commodity chains that go into manufactured goods can also only be a good thing, as I think it is incumbent on us all to be aware of what we consume and where it comes from.
  • Placing the reporting burden onto global corporations – rather than poor governments or artisanal miners – is reasonable.
Gotten wrong:
  • Activist efforts fail to take into account the significant number of conflicts in DRC that are not related to resources, e.g., conflict over land (for agriculture, not minerals) or for local political control. Restricting the export of coltan and other ‘conflict minerals’ might reduce profits to armed groups, but it will not have any effect on groups fighting for other reasons.
  • The SEC regulations focus on minerals that have been handled by armed groups. The flaw in this is that the DRC army, which is one of the worst perpetrators of human rights abuses, extrajudicial killings and sexual violence, is not classified by the State Department as an ‘armed group’. Perversely, this means that tantalite that has passed through the DRC army’s hands could be imported into the US and legitimately labeled ‘conflict free’.
  • Activists in rich countries who advocate for consumer boycotts of products that cannot be 100% verified as being free of coltan from Congo assume that western consumers remain the most important in the world, and therefore have the power to change corporations’ sourcing practices. Markets in rich countries for electronic goods will remain important, but in terms of size they have been overtaken by developing country markets, e.g., there are more mobile phones in Africa than the US, and China has double the number of internet subscribers than the US. Activists of the future must work out how to engage with developing country consumers and corporations (especially metals processing and manufacturing firms from China), and get them to care about the origin of commodities.
Thanks to Michael Nest for taking the time to chat about Coltan. It's well worth your time to read.

10 Comments:

Blogger David Aronson said...

Let me second Laura in congratulating Nest on his fine book. I have one thought about the coltan statistic I'd like to run by him. My impression is that statistics about "coltan" are inherently misleading. Coltan is just one of several minerals that contain columbite (niobium) and tantalite. These are the ores industry needs. The real question therefore, is how much of the world's reserves of either of those two minerals the Congo contains. Information on that is hard to come by. US geological surveys say that the tantalite industry is shrouded in secrecy. But they estimate that most of the world's tantalum comes from just five countries: Australia, Brazil, Canada, China, and Mozambique. Congo may or may not possess a large amount of the world's coltan, but its reserves of the underlying mineral-of-value have been highly exaggerated.

Friday, September 30, 2011 11:04:00 AM

 
Anonymous ChuckBlakeman said...

Our company works with Congolese tribes to help them export without a dime going to conflict groups. Dodd-Frank has been disastrous for them.

There are (at least) six Congo regions from which Dodd-Frank minerals are mined, and only one of them has ever had anything to do with conflict. Dodd-Frank has put them all out of business before it is even enacted.

I'm in Tanzania to help a chief export his coltan using a visible, well-documented process that ensures not a dime goes to conflict. That chief and his people will go hungry because the smelters, citing Dodd-Frank, have vanished.

The issue with Dodd-Frank is that it is a nuclear option. To destroy the militia, Dodd-Frank is willing to take down every innocent man, woman, and child in the Congo who live off mining. Such massive collateral damage is not acceptable under any circumstance.

I can bring a Congo chief involved in mining to any debate and/or the SEC panel in DC - likely no one wants them there. We prefer talking about this problem without the input of those actually affected.

Friday, September 30, 2011 5:03:00 PM

 
Anonymous D Djeli said...

Good grief have those badvocate lobbyists really been selling 80% as a Coltan figure for DRC??? And they've managed to influence policy? Surely no. No wonder things are out of synch.

This is a major reason why mining companies don't make more than superficial noises because they don't need DRC coltan. The figure is more like 15% and Brazil and Australia each have considerably more than that.... Don't those wonks read mining journals? Please tell me this is not true...

Joder, pornography and bullshit figures all in one week can't they go back to saving hedgehogs or something?

Friday, September 30, 2011 5:58:00 PM

 
Anonymous D Djeli said...

I just took a breath and read David's comment. The mining industry quite categorically has never seen the DRC as an important source of Tantalum and I have had that from the horse's mouth so to speak.

Whatever US geological surveys say those mining companies invest a lot of wonga in their businesses in order to make even more, so I don't think they are totally plucking figures out of the air. The thing they liked about the DRC was the fact that the Tantalum was cheaper.

What they were all peeing themselves about was whether Cobalt would be included in the legislation and it isn't and of course it wouldn't be because bombs are made out of it.

Ha conflict free bombs that would have been fun............

Friday, September 30, 2011 6:29:00 PM

 
Blogger Michael Nest said...

It is good to see a discussion about the quality of data on tantalite, as data has been central to arguments about coltan and war in the DRC, including the role of western corporations and consumers in fuelling that conflict. Let me emphasize I’m not attached to proving the 80% figure is incorrect: I’ve simply not seen any good evidence supporting it. I’m aware that the US Government has produced reports suggesting the DRC has of 64% of global reserves of tantalite (and Africa 80% of global reserves), but like all such reports, they do not reference the source of this data.

In the absence of recent geological work in Eastern DRC, all reports on tantalite reserves in the DRC must be out of date. Since the early 1990s large tantalite deposits have been identified outside the DRC, including in Saudi Arabia, Egypt, China and Greenland. Therefore, even if the DRC once had 80% of global or African reserves, this can no longer be true because new discoveries have expanded the total quantity of reserves.

Dave, I appreciate your point about tantalite being found in combination with ores other than columbite (niobium), and therefore focusing on coltan reserves only may result in tantalite found in other ore mixtures (such as tin-tantalite) being omitted from any analysis. My understanding is that geological survey work takes this fact into account when developing estimates of reserves. No reputable industry or government produces data on ‘coltan’ as such, as this is pointless when the object of interest is tantalite.

In one sense, it does not really matter if the DRC has 8% or 80% of the world’s tantalite reserves. If the mineral is playing a significant role in the conflicts occurring, we need to understand why and what to do about it. Nevertheless, if data is going to be used, those using it need to get it right or flag legitimate concerns about its quality.

Saturday, October 01, 2011 8:15:00 AM

 
Anonymous Anonymous said...

I also read Coltan and would like to thank the author for an interesting read.

I must disagree with the points on what the activist community has gotten wrong. First, while the FARDC might not fall under the official classification at present from State, the OECD Guidelines and all of the implementation schemes clearly seek to exclude them from the system. This is of course remains to be seen if either will be properly implemented but I don't think that it is something the community has gotten wrong by any stretch.

What has been missed, as Laura has elsewhere pointed out, is the SSR component. In my view, if you have to gather the political capital to demilitarize the mines, why not push for some serious SSR at the same time?

I also disagree with Nest's 3rd point about the strength of the Western consumer. This is still just a guess, but due to the arrangement of the supply chain, I have a hard time seeing how there will be a long term purchaser for non-clean minerals from DRC. First, Dodd-Frank covers all US Stock Exchange companies, not just US companies. Second, smelters will sell to a variety of parts manufactures. They are not going to risk losing access to their biggest market at present, The West, just because they have other potential customers. These smelters supply minerals for a variety of industries aside from tech. Simply saying the number of cell phones in Africa and China exceeds the west and will continue to won't predict how the supply chains will shift.

On the otherhand, I think the activist community, of which I am a part of, has dropped the ball on ignoring the impact of its work. Saying there is going to be dislocation to any change doesn't mean we shouldn't make a determined effort to offset such damage. Its not a bipolar world out there. There is some middle ground between declaring the law an abject failure and a overwhelming success and I think we would all do everyone a favor if we focused on those shades of gray.

Just some scattered thoughts, but overall I took away a very positive impression of the book.

Thanks

-Student Activist

Sunday, October 02, 2011 11:51:00 PM

 
Anonymous Anonymous said...

I will have to pick up this book and read it. Thanks for the interview and the information.

Monday, October 03, 2011 7:16:00 AM

 
Blogger Michael Nest said...

Anon. (#1) thanks for your comments. I’m totally with you on the need for security sector reform, although I only briefly mention this in the conclusion of my book because it is somewhat tangential to coltan. Several things are needed: first, improved unity of command and control of the FARDC, as well as ethics and officer training; second, administrative reform that ensures soldiers get salaries and supplies on time; third, reform of jurisdiction that gets the FARDC out of (a) civilian policing, and (b) running businesses. As you know, it is the latter that has the biggest impact on coltan and the mining sector more generally due to FARDC’s involvement in mining and trade of minerals.

When I talked about the FARDC not being included in the definition of an ‘armed group’, I was talking about the SEC regulations, not the OECD guidelines. I don’t think it matters whether activists intended the FARDC to be excluded or not from the SEC regulations. The fact is the wording of the US legislation is weak and lets the FARDC off the hook. This is politics at work: activists were outsmarted by the State Dept. The US government does not want to lump the official army of a government with which it has diplomatic relations in with anti-state forces. The US government has gotten itself into a hole over this because it has described all antigovernment forces as illegitimate (including militias in DRC and other armed groups such as Al Qaeda, the Taliban and the FARC in Colombia), which means it has to accept the legitimacy of some pretty awful ‘official’ armies around the world.

In regard to the strength of the western consumer, I think the global supply chain for tantalite is already changing: industry commentary is that Chinese have become the biggest buyers of coltan from DRC (via Rwanda); the third biggest smelter of tantalite in the world is in the Peoples’ Republic of China; it sells to Chinese firms, two of which are amongst the top 10 makers of phone handsets; they sell to Third World consumers who outnumber rich consumers 3:1. Yes, there are many other products containing tantalum, and rich country markets remain important, but there is a large part of the global economy that bypasses the US Stock Exchange and this part is increasing. Activists are up for the challenge, but globally they will have less and less impact if they don’t directly engage with consumers and corporations beyond rich countries.

Like you, I agree there are shades of grey in all the initiatives that focus on coltan, and this is partly because the tactics and proposed solutions are new and innovative, so invariably some won’t work as anticipated. As I mentioned, I think the heightened transparency that the SEC/OECD regulations will introduce are positive developments. Alas, when the book went to press US legislation had just been introduced, and it was too early to judge its actual impact; I could only comment on weaknesses in the wording.

Wednesday, October 05, 2011 4:36:00 AM

 
Anonymous Michael Nest said...

Anon. (#1) thanks for your comments. I’m totally with you on the need for security sector reform, although I only briefly mention this in the conclusion of my book because it is somewhat tangential to coltan. Several things are needed: first, improved unity of command and control of the FARDC, as well as ethics and officer training; second, administrative reform that ensures soldiers get salaries and supplies on time; third, reform of jurisdiction that gets the FARDC out of (a) civilian policing, and (b) running businesses. As you know, it is the latter that has the biggest impact on coltan and the mining sector more generally due to FARDC’s involvement in mining and trade of minerals.

When I talked about the FARDC not being included in the definition of an ‘armed group’, I was talking about the SEC regulations, not the OECD guidelines. I don’t think it matters whether activists intended the FARDC to be excluded or not from the SEC regulations. The fact is the wording of the US legislation is weak and lets the FARDC off the hook. This is politics at work: activists were outsmarted by the State Dept. The US government does not want to lump the official army of a government with which it has diplomatic relations in with anti-state forces. The US government has gotten itself into a hole over this because it has described all antigovernment forces as illegitimate (including militias in DRC and other armed groups such as Al Qaeda, the Taliban and the FARC in Colombia), which means it has to accept the legitimacy of some pretty awful ‘official’ armies around the world.

In regard to the strength of the western consumer, I think the global supply chain for tantalite is already changing: industry commentary is that Chinese have become the biggest buyers of coltan from DRC (via Rwanda); the third biggest smelter of tantalite in the world is in the Peoples’ Republic of China; it sells to Chinese firms, two of which are amongst the top 10 makers of phone handsets; they sell to Third World consumers who outnumber rich consumers 3:1. Yes, there are many other products containing tantalum, and rich country markets remain important, but there is a large part of the global economy that bypasses the US Stock Exchange and this part is increasing. Activists are up for the challenge, but globally they will have less and less impact if they don’t directly engage with consumers and corporations beyond rich countries.

Like you, I agree there are shades of grey in all the initiatives that focus on coltan, and this is partly because the tactics and proposed solutions are new and innovative, so invariably some won’t work as anticipated. As I mentioned, I think the heightened transparency that the SEC/OECD regulations will introduce are positive developments. Alas, when the book went to press US legislation had just been introduced, and it was too early to judge its actual impact; I could only comment on weaknesses in the wording.

Wednesday, October 05, 2011 5:01:00 AM

 
Anonymous Anonymous said...

Thanks for the reply!

We certainly see eye to eye on the SSR aspect of things.

As for the SEC, that detail seems yet to be defined to me, as the final guidelines are not out. I agree that they could certainly pull an end the round and exclude the FARDC, but I think there is still hope for it to be included. Perhaps this is an avenue for activists to make their voices heard again.

I will defer to you on the supply chain diversion because frankly I do not know the technical details. As noted in a Reuters article the other day - http://www.reuters.com/article/2011/10/04/congo-democratic-minerals-idUSL5E7L31S720111004

China is really the only player in town and must be taken into account accordingly. I don't think this completely negates the impact of western consumers, as some other than you have suggested, but means that strategies must be adapted. The fact that only 3 of the 25 exporters are open now, as stated in that article, suggests to me that while sales is shifting to China it is not going to drive the entire mining sector in the east.

I think the key point now that activists need to drive home is that simply demanding something is conflict free is not fixing the problem. Pushing for clean sourcing from across DRC will have a much more substantial impact than avoiding it all together, there just needs to be an incentive/consumer demand for companies to put in the extra effort and resources to speed up certification systems and auditing. I maintain that the real benefit of Dodd-Frank is not necessarily cutting off funding from armed groups but trying to build some a semblance of a formalized economy and political system around the biggest industry in the most troublesome part of the country.

Thank you for being a voice of sanity in this debate.

Wednesday, October 05, 2011 8:22:00 AM

 

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