Wednesday, January 09, 2019

DRC's missing gold

In the Democratic Republic of Congo (DRC) so-called artisanal form of mining is allowed if the miners hold a valid license from the Ministry for Mining. These sites guarantee work and provide an income for many Congolese families. According to the Belgian research group, International Peace Information Service (IPIS) — which has been investigating the mining sector in the north-east since 2008 — almost 200,000 people work in these artisanal mines and not all have licenses to do so. IPIS visited 2,400 sites and found that armed groups were present at 64 percent of the mines, alongside the miners.  Just as the DRC is rich in natural resources, it is also 'rich' in armed groups — from civil defense militias to rebel forces and criminal gangs. The national army — known as the FARDC — integrated a number of rebel groups after the last civil war, but remains undisciplined and underpaid. While they are not the primary cause of the ongoing violence, the conflict minerals have sustained the armed groups. 

In the DRC's many artisanal mines, gold is both valuable and easy to find. So these armed groups will often try to find a way to get involved in the industry, mostly through forced labor or smuggling. As a result, the DRC does not fully profit from the gold mining industry. IPIS estimates that between 75 and 98 percent of the gold crosses the border into Uganda illegally. Smuggling the gold is not difficult. But what happens once the gold reaches the international market? It's used in a wide array of products, from jewellry to the latest gadgets. Companies are under increasing pressure to report on their supply chains and production conditions. So if this is the case, how does smuggled, conflict gold withstand such scrutiny?

"When they come here, they smuggle it," he says. But this isn't a hard problem to fix. "We buy the gold from them, put the documents in order, pay taxes to the [Ugandan] government and export it to Dubai, China and the United Kingdom. So it becomes a legal export product with Uganda as the country of origin."

This way, the product's actual origin remains blurry. The fact that gold ore is traded in bulk also makes this process easier. Smelters accept gold from a multitude of sources so the final exported product is a mix.
The Ugandan Minister of State for Minerals, Peter Lokeris, acknowledges that this process might compromise the legal trade. "When smugglers from Congo sell their gold to a legal trader in Uganda, the origin can no longer be placed," he says. Lokeris says he does not know what percentage of the exported gold is actually sourced in the DRC.
Gold trader James believes there's another big reason why gold from the DRC will almost always make its way into Uganda. "Nobody dares to go to Congo to buy gold," he says. "Uganda is safe. Nobody known when the wars will stop in Congo. The only way to get it is via Uganda."

No comments: